Bankruptcy in the UK
Bankruptcy in the UK varies from country to country although the overall outcome is more or less the same throughout the UK.
England and Wales have one bankruptcy law, while Scotland and Northern Ireland have their own laws.
In Scotland, bankruptcy is known as sequestration and the debtor's possession passes to the Accountant in Bankruptcy, while the Official Receiver takes care for bankruptcy details in England and Wales after the court orders bankruptcy.
In Northern Ireland, the debtor's estate is administered by a Trustee who is appointed by the court.
Filing the petition for bankruptcy is not an easy decision but at least it is not a punitive act any more.
This means that you will not be left with a pair of change clothes only nor your name will be published in the local newspapers.
In addition, the new law has reduced the period of bankruptcy from three years to twelve months.
Bankruptcy order is made at your local court but the procedure is held in closed court.
You will not even see the judge unless he/she ask to see you but you will most likely be alone with the bankruptcy clerk.
The papers are then taken to the judge who orders bankruptcy.
Afterwards, your case is handed over to the Official Receiver who takes care for the details of bankruptcy.
The bankruptcy process in England and Wales is relatively simple but it has several long-term consequences which is why it is recommendable to be used as the very last resort.
But if you are in serious debts, bankruptcy will enable you a fresh start although you most likely will not be able to prevent losing your home.
If you live in Scotland, you will not be applying for bankruptcy but sequestration instead.
In order to be declared sequestrated, you must prove that you are insolvent and that you owe more than £1,500.
You need to file a petition for bankruptcy at the court as well just like people who live in England and Wales but your estate will be administered by the Accountant in Bankruptcy.
In 2008, the new sequestration law has shortened the bankruptcy process from three to one year in order to equate the sequestration with the bankruptcy law in England and Wales.
However, if the debtor does not follow the "rules" the court can extend the period of bankruptcy.
If you do not have any property nor savings or assets, you can file for Low Income, Low Assets Bankruptcy (LILA) in which you do not go to the court but the Accountant in Bankruptcy.
Like in England and Wales, you can file for bankruptcy in Northern Ireland if having a debt of over £750.
The bankruptcy period lasts 12 months just like in other UK countries, while your possession will be administered by a Trustee who is appointed by the court.
However, the outcome of bankruptcy in Northern Ireland is virtually identical to other countries in UK - the Trustee with sell you property, take your saving and valuables to pay off your creditors.
England and Wales have one bankruptcy law, while Scotland and Northern Ireland have their own laws.
In Scotland, bankruptcy is known as sequestration and the debtor's possession passes to the Accountant in Bankruptcy, while the Official Receiver takes care for bankruptcy details in England and Wales after the court orders bankruptcy.
In Northern Ireland, the debtor's estate is administered by a Trustee who is appointed by the court.
Filing the petition for bankruptcy is not an easy decision but at least it is not a punitive act any more.
This means that you will not be left with a pair of change clothes only nor your name will be published in the local newspapers.
In addition, the new law has reduced the period of bankruptcy from three years to twelve months.
Bankruptcy order is made at your local court but the procedure is held in closed court.
You will not even see the judge unless he/she ask to see you but you will most likely be alone with the bankruptcy clerk.
The papers are then taken to the judge who orders bankruptcy.
Afterwards, your case is handed over to the Official Receiver who takes care for the details of bankruptcy.
The bankruptcy process in England and Wales is relatively simple but it has several long-term consequences which is why it is recommendable to be used as the very last resort.
But if you are in serious debts, bankruptcy will enable you a fresh start although you most likely will not be able to prevent losing your home.
If you live in Scotland, you will not be applying for bankruptcy but sequestration instead.
In order to be declared sequestrated, you must prove that you are insolvent and that you owe more than £1,500.
You need to file a petition for bankruptcy at the court as well just like people who live in England and Wales but your estate will be administered by the Accountant in Bankruptcy.
In 2008, the new sequestration law has shortened the bankruptcy process from three to one year in order to equate the sequestration with the bankruptcy law in England and Wales.
However, if the debtor does not follow the "rules" the court can extend the period of bankruptcy.
If you do not have any property nor savings or assets, you can file for Low Income, Low Assets Bankruptcy (LILA) in which you do not go to the court but the Accountant in Bankruptcy.
Like in England and Wales, you can file for bankruptcy in Northern Ireland if having a debt of over £750.
The bankruptcy period lasts 12 months just like in other UK countries, while your possession will be administered by a Trustee who is appointed by the court.
However, the outcome of bankruptcy in Northern Ireland is virtually identical to other countries in UK - the Trustee with sell you property, take your saving and valuables to pay off your creditors.
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