Don't make the decision to become bankrupt lightly; your rights afterwards are limited. Once the wheels are in motion they cannot be stopped.
At the bankruptcy hearing you have the right to bring all the information you think relevant to your case. You also have the right to legal representation at the hearing. The court will view and listen to all parties and review all the documentation before them.
They will then decide if you will be declared bankrupt with immediate effect, of if there is an Alternative Solution to your debts. Whatever their decision you have the right to appeal if you disagree with anything the court has said, or any of the debts included in the ruling. It is possible, under certain criteria, to have the bankruptcy annulled at any time. A solicitor will advise on the requirements and procedure surrounding bankruptcy annulment.
You can't object to the fact that your bank accounts will be closed, your possessions sold or the fact that your house and car may also be seized. These are the high prices of bankruptcy that you have to pay.
During Bankruptcy
During Bankruptcy you will find that it is difficult to get access to credit, although you have the right to apply for up to £500 without disclosing your bankruptcy status. However, most lenders will be aware of your credit standing as it will be recorded on the files of the credit reference agencies. Following discharge you have the right to change your credit file. You will not be able to wipe your record, but you can amend it to show your dismissal status.
Creditors
Once the bankruptcy has been ordered you have the right to expect the creditors to leave you in peace. It is the role of the Trustee in charge of your case to deal with them directly. Therefore you can expect some peace of mind once bankruptcy is initiated. If you are still bothered by angry creditors you can seek legal advice to get it stopped. It will also reflect badly on them once the courts are notified of their behaviour.
Property
As stated above, during bankruptcy you lose all rights to your property. This includes any buy-to-rent property you own, holiday homes, international property or business dwellings. They will all become subject to your bankruptcy and ultimately in the control of the bankruptcy administrator. Even after you have been dismissed, the property belongs to them and they can sell them up to three years after your discharge. You do have the right, however, to live in your family home for up to a year while you find alternative accommodation.
Joint Ownership
If the family home is owned jointly, and only one spouse is declared bankrupt the other does have the right to buy the bankrupt's half of the home. This enables you to keep your family home. The risk is that the partner or spouse of the bankrupt may ask you to leave if the bankruptcy has affected your relationship. Also if the spouse can't afford to buy the bankrupt's half of the house, the home will still have to be sold. Only the bankrupt's share of the equity will be taken by the courts though.
