An individual in extreme financial difficulty can petition the court for bankruptcy to gain immediate financial relief and to avoid legal action against them from creditors. Bankruptcy can be initiated by a creditor or a debtor. If a creditor applies for a debtor’s bankruptcy, the debtor must owe the creditor at least £750 in order to proceed with the bankruptcy process.
The individual’s assets will be assessed and sold to pay off the debts. If the debtor’s assets do not cover the amount of debt owed to the creditors, a split may be made on a percentage basis.
A bankruptcy petition must be filed at a county or court or the High Court in London. The court will decide whether or not the bankruptcy petition is successful.
An Official Receiver will be appointed to process the bankruptcy if the court grants the application. The Official Receiver is responsible for protecting the debtor’s assets during the investigation into their finances.
Liquidation differs from bankruptcy in the sense that the business cannot be resuscitated, whereas an individual can make a fresh start after becoming bankrupt.
While creditors can petition the court for a business’s liquidation, a business can enter liquidation voluntarily.
The business will be taken care of by an administrator who will work to try and salvage the financial situation of the business. A creditor may apply to wind up the company. If this occurs a liquidator may be appointed to be responsible for the deregistration of the company.
A liquidator will also collect and sell the company’s assets. If there are not enough funds to pay off the creditors, each creditor will receive a payment proportionally divided between them.
Capital will only be returned to shareholders if there are surplus funds. In all cases, the costs of the liquidator are met first.
Getting Bankruptcy Support & Advice
Going through a debt crisis can be incredibly overwhelming. However, the new legalisations are designed to make the both the process and the aftermath easier to cope with and manage. Whether you’re suffering personal or business debt, there are now solutions aimed at solving your debt problems.
Gibson and Associates can provide both advice and services to ensure the process goes smoothly.
Please complete an Online Enquiry, call us on 01 872 3143 or email us on[email protected]/ and we will explain all of your options, without any obligation.
Frequently Asked Questions
Find our answers to personal insolvency questions below:
What is the point of bankruptcy?
What happens when I seek to declare bankruptcy?
Can I apply for bankruptcy before I attempt to apply for personal insolvency?
Am I eligible for personal insolvency?
Will I be able to keep my home if I am insolvent?
Can I save money if I am insolvent?
How can I come to a personal insolvency arrangement?
Why Choose Gibson & Associates?
Solicitors offer a lot of advantages over heading straight to a personal insolvency practitioner. Where a personal insolvency practitioner will only look at the numbers involved, Gibson & Associates look at the issues that led to you becoming insolvent in the first place, and take these into account.
In some cases, this could invalidate the debt and even result in the return of money to you – in the event of, for example, reckless lending or fraud, it is possible that you should never have been in debt in the first place, and we can help sort out and resolve the situation in your favour.
Our team of Insolvency solicitors can work with you to get a great plan in place, working towards a solution that you can be genuinely happy with. Read our case studies to see how other people have benefitted from our unique service, or contact us to start working towards a brighter future today.