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Wednesday, February 4, 2009

How to go bankrupt?

By reklicom

What is Bankruptcy? Bankruptcy is one of the more effective ways to deal with debts you cannot afford to pay. Once you declare that you are bankrupt, all assests in your possession will be used to pay your outstanding debts. After a period of one year, all your remaining debts will be written off and you can start anew. You can either file your own petition of bankruptcy or your creditors can do it for you. Either way, the effects are the same. Most of the Bankruptcy rules in effect have changed since April of 2004 when the Enterprise Act was approved.

The insolvency practitioner prepares the proposal of payment scheme that is according to your capabilities. If your creditors agree to the terms stated in your IVA, the arrangement is put in place. If you fail to comply with the terms in your IVA for the period that it was in effect either your insolvency practitioner or your creditors could file a bankruptcy petition against you.

Be wary about companies offering to put you on the line with an insolvency practitioner as this requires a fee. You can very well deal directly with an insolvency practioner without having to go through a third party.

Pensions: If you went bankrupt before May 29, 2000, your personal pension could be taken in as an asset. This means that you will receive no lump sum or weekly payments in the future. This rule has been changed, however. Therefore, if you went bankrupt after May 29, 2000, your pension, may it be personal or occupational, should be left untouched. Some debtors used their pensions to stop creditors from taking away their savings. In this case, the pension fund may be lost to the Official Receiver.

Before a petition of bankruptcy is filed in court, your creditor will first send you a "Statutory Demand", which will ask you to pay your debt either through installments or through the property you own.

New Bankruptcy Laws? There is now a new law for bankruptcy that was passed called the "Bankruptcy Abuse Prevention and Consumer Protection Act". People struggling to pay their credit debts are now going to have to deal with this new bankruptcy law.

Bankruptcy Can Stay On Your Credit Report For 10 Years Filing for bankruptcy can be on your credit for up to a decade. It's a good idea to look into alternatives for bankruptcy. Buying anything on credit can be a real challenge for many years after you file bankruptcy.

Alternatives To Filing Bankruptcy: Contacting creditors is an alternative to bankruptcy. Instead of filing for bankruptcy, you work out payment options with your creditors. In many cases they are very willing to work with you. It's to their advantage to keep you as a customer. The creditors know the alternatives for bankruptcy will bring them more profits if you don't file for bankruptcy.

Only the larger County Courts accept bankruptcy petitions. Although you are obtaining the form from your local County Court, you will need to take a trip to the High Court to submit the form. If, for example, you reside in central London, you will have to go to the High Court to submit your petition. The District Judge will usually call for a hearing that same day to decide whether it is appropriate to issue the order or not.

REMEMBER - Beneficial Interest: If your co-owners have any intention of buying out your equity share of the property, they must do it quickly. Otherwise, the Official Receiver may take it into his hands in selling your home altogether. Those who want to buy your beneficial interest must get in touch with your Official Receiver and transact with him directly. The Insolvency Service charges very low for the transfer of your beneficial interest so this should not really be a hard thing to manage. You also need to reach an agreement with your Official Receiver on the actual value of your beneficial interest before this kind of transaction is made. If there is negative equity in the property, the value of your beneficial interest may go from a minimal amount of 1.00.

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