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Bankruptcy Disadvantages


  • If you are to apply for your own bankruptcy you would be required to pay a substantial court fee. At the present time this is £700 comprising of a court fee of £175 with a deposit of £525.
  • If you apply to obtain credit of more than £500 during your bankruptcy and prior to discharge you must bring this to the lender’s attention.
  • Any assets that you own at the time of your bankruptcy will automatically transfer to your Trustee in Bankruptcy.
  • You have a duty to provide full information as to your assets and liabilities, income and expenditure and fully co-operate with your Trustee in Bankruptcy. Failure to co-operate may result in the Trusteenin Bankruptcy applying to the court to suspend time running in respect of the duration of your bankruptcy and extending its duration.
  • The Trustee may make an application to the court for you to be subject to an income payments order and may require monthly repayments for a period of 36 months (unless the court orders a longer period).
  • You would be automatically disqualified as acting as a director of a limited company or taking part in the management of a company except with the court’s prior permission. You may also be prejudiced in your employment if you work in the financial services industry, police or other related areas or perform a management role.
  • Certain debts are not provable in bankruptcy eg student loans, arrears of maintenance, fines and child support agency payments. These will need to be paid even if you are bankrupt.
  • As the Official Receiver has to investigate the circumstances giving rise to your present financial predicament if this has been the result of reckless, blameworthy or dishonest conduct, the Official Receiver/Trustee in Bankruptcy appointed by him may apply to the court for a bankruptcy restriction order eg building up credit card debt that you realistically could not pay back.
  • Certain conduct in bankruptcy may result in prosecution and can be punishable by imprisonment of a maximum of two years for example defrauding creditors, concealing assets or destroying books and records.
  • Bankruptcy orders are advertised in the London Gazette and depending on the official receiver may be advertised in local newspapers therefore it may be difficult for you to operate a bank account during bankruptcy.

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