Coping with aftermath bankcruptcy

[WendyS]

Can anybody please explain to me how somebody who has been made bankrupt deals with money, etc. once the declaration has been made? Does an official of the court come and remove all your possessions except essential ones, etc. . Is the bankrupt individual allowed to receive money from other people, etc? Am not asking for myself but trying to understand What happens once everything has been made official.

[SaxyJag]

Absolutely not.

Immediately after a judge has declared you bankrupt, you're required to meet with an insolvency practitioner, where you go through all your assets, income and expenses. If they consider your assets to be more than essential, like if you have a Jag AND a 4X4, they'd insist on one or both of them being sold in favour of something cheaper to run. Likewise your house, if there's equity on it, and any private pension schemes with a sizeable sum on them.

When we went bankrupt, we were renting, so we didn't have a house to lose. Furniture (unless it's rare antiques or something) is worth diddly-squat at auctions, so there was no trouble there, either.. At the time, we were running a large estate car and a motorbike, using both for work / family etc. and we were allowed to keep both because a) they had so little value and, b) they were classed as basic essentials and not excessive.

It was actually a very humanising experience. We were up front and honest with the practitioner and in return she was extremely helpful and reassuring. We felt like we actually someone on our side in all this.

They will not leave you sitting on your backside in a bare room without a penny to your name.

[SaxyJag]

I should say, we were told if we received any large sums of money or chunks of property - lottery win, inheritance etc., then we would have been expected to declare it to them. Fifty quid for your birthday, however, is neither here nor there.

[flipflop104]

I agree with everything saxyjag has said. The two people I know who were made bankrupt - one was a homeowner and their house was repossessed (now rent privately) but the other was renting so they didn't lose their home.

The official reciever's do seem to be very helpful and sympatheitic to the situation and have given my friends 6 months to sort their finances out and get used to living without debt and then he is meeting with them to work out incoming and outgoings and how much and even if they can afford to pay any to him to go to the creditors.

One of my friends is married and her husband has the family car in his name so (as he is not the person who went bankrupt) they official reciever is not even interested in the car as it does not belong to the bankruptee.

It's not as awful as it seems and although I wouldn't necessarily advocate it, you are not going to be out on the streets or anything as awful as that - the official receiver that my friends will be seeing has said that the idea of bankruptcy is not to lower your standard of living but to maintain it as closely as possible (within reason, obviously) but without the debt.

[myvesta-sean]

This link will assist with you questions Wendy.

http://myvesta.org.uk/media/video/bankruptcy/i ndex.html

Regards

Sean