Frequently Asked Questions
The effect of being made bankrupt is that you are absolved of unsecured debts that have become impossible to repay (not all types of debt are included, for example fines or lump sums due upon divorce).
Any assets you have will be vested in your trustee in bankruptcy who will collect them and share out the proceeds between your creditors in accordance with how much each is owed. You will have a duty to attend the Official Receiver and a trustee in bankruptcy.
As a bankrupt you will be restricted from membership of certain professional bodies and unable to be a company director. Your ability to obtain credit will be affected, and you must cease using any and all bank accounts and credit cards. Most bankruptcies are discharged within a year.
An Individual Voluntary Arrangement may be available as an alternative to bankruptcy.
If your company is insolvent it means that it is unable to pay its debts as they fall due.
You should not continue to trade if your company is insolvent and if you do, as a director, you risk being made personally liable for the company’s debts.
It may be necessary to consider winding your company up voluntarily. Any creditor owed more than £750 could serve a statutory demand on your company and present a winding up petition to the court.