Bankruptcy in Scotland is called Sequestration, and while the process is similar, there are some differences, and some new changes are being proposed.

If you are in debt or insolvent in Scotland there are options to deal with this, options that are different than in the rest of the UK. As Scotland has its own Parliament and sort of governs itself, they also have different insolvency laws for Scottish citizens.

The Scottish Parliament is proposing a new bill, The Bankruptcy and Debt Advice Bill 2013, to ensure Scottish citizens have access to “fair and proportionate” debt management.

The main points of the bill are to provide access to financial advice for everyone struggling financially, and also financial education for those in need. There also are to be some changes made to the Debt Arrangement Scheme in Scotland.

The hopes of the bill is to have help and assistance there for those in debt, and also to assist creditors in collecting some money back if the debtor is in a position to pay something. Sort of a win-win scenario for both creditors and debtors.

The Bill balances the needs of both the creditors debtors through a Common Financial Tool or CFT. This “tool” is to be used by money advisers in determining what a debtor can afford to pay to their creditors. It also insures the creditors that those that can pay something, do pay something.

The Bill also allows a new procedure for a bankruptcy to be re-opened after discharge if there is evidence to support the re-opening, such as assets or something that would allow a bankrupt to pay something back to their creditors.

The Bill allows the AIB or Accountant in Bankruptcy more powers than they had prior. The AIB can review decisions before an onward appeal to the Sheriff Court. The Bill will also allow the AIB to transfer debtor’s between “products” or programmes more easily.

The Bill also deals with making the process for an e-Application over the web more efficient.

The Bill seems to want debtors to use bankruptcy or sequestration as a last resort, which it should always be. Since Scotland has other debt schemes such as Trust Deeds, DAS or Debt Arrangement Scheme, and LILA or Low Income Low Assets, debtors need to be made aware of these types of debt help before just going bankrupt.

The Bill also as mentioned, helps protect creditors in maximising what they may receive from a debtor.
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There seems to be some confusion over BRO's or bankruptcy restriction orders. These are orders that are issued by an Official Receiver that keep someone who has gone bankrupt under the restrictions of bankruptcy longer than the usual 12 months of a bankruptcy.

If a person receives a BRO, they can still be discharged from the bankruptcy after 12 months, but they are still under the restrictions of bankruptcy, such as no access to credit, cannot be a Director of a LTD company, etc, for the period of the BRO. Which can be up to 15 years.

BRO's are only issued in instances where the bankrupt has been uncooperative in the bankruptcy, or tried to hide something or commit fraud. They are not issued at random and to just everyone.

A BRO is not a criminal charge, so there is no jail or prison involved. A person going bankrupt would need to be brought up on criminlnal charges and found guilty in order to be sentenced to jail or prison.

This previous writing may help as well:

Bankruptcy Restriction Orders

People ask me what happens if I go bankrupt and I have gambling debts, can these be included in my bankruptcy; and the answer is yes, however you may receive a BRO or bankruptcy restriction order.

There are also those that in speaking with them they know they are insolvent and need to go bankrupt, indeed are planning to go bankrupt, yet they are still using what credit lines they have left to the maximum credit they have.

For them when they go bankrupt, a BRO or bankruptcy restriction order may be issued as well.

Basically a bankruptcy restriction order or BRO, is an order that keeps you under the restrictions of bankruptcy longer than the usual 12 months a bankruptcy lasts.

Most people when they go bankrupt are bankrupt for one (1) year, at which time they are discharged from the bankruptcy; meaning the bankruptcy is over and they are done.

If a BRO is issued, you can still be discharged after the 12 months, but the restrictions of being bankrupt are still in place for whatever the time period of the BRO.

You can receive a BRO for a time period of three (3) years, five (5) years, or any time period from over 12 months up to 15 years. It depends on the severity of what has caused the Receiver to issue the restriction order.

The reasons a BRO may be issued are for things such as debt due to gambling, misuse of credit, transferring or hiding an asset. Usually actions we can imagine to be viewed in a dim light, can be cause for a restriction order.

As to how long for what offence you may receive the BRO, that again is up to the Receiver and can depend on the severity of the offence.

I spoke with a woman a few years ago who received a BRO for eight ( years due to the fact she transferred a car to a family member prior to going bankrupt. I would imagine the Receiver in looking more into this transfer may have felt that the transfer was to hide the car as an asset.

For the majority of people going bankrupt the issue of a restriction order is not a worry.

If someone did have gambling debts, they could look at placing the debts in a debt management plan for a period of time, make payments of what they can afford, and in time look to go bankrupt. If enough time has passed, the issue of the gambling and going bankrupt may no longer be a problem.


Regards,

Jon
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I get many questions from people who own their own businesses and are Directors of LTD companies and are concerned about how bankruptcy will affect them. The fact is as a bankrupt, during the period of your bankruptcy, unless you receive a restriction order keeping you under the restrictions of bankruptcy longer, you cannot be a Director for the period of your bankruptcy. So usually that means for 12 months, you cannot be a Director. If you receive a BRO, you may be facing a longer period of restriction, even though you may be discharged from the bankruptcy after the 12 months.

This article may help explain some of the responsibilities and the serious nature of being a Director:

Being A Director Of A LTD Company

For many people the dream of being self-employed carries with it the vision of working the hours one may want, being the boss, long lunches, fast cars, success at every level....well I exaggerate a bit.

But a lot of people do want to work for themselves, and being self-employed can be hard work, either as a sole trader or being the Director of a Limited Company. Although for some being a Director does not equate to being self-employed, it can just mean you are the Director of a specific function of a company, or you can be the Director of the entire company.

Being a Director comes with it a huge responsibility, to the company and to the employees, if you have any. You are responsible for much of the financials of a company, and if for any reason something goes wrong, you can be held accountable for this.

Nothing shows this more than the restrictions, charges and actions taken against some former Directors of companies by the Insolvency Service.

When a Director is found guilty of a charge against them, the Insolvency Service can impose a ban or restriction against them. These bans can last for many, many years.

Here are a few examples:

A man was jailed for six (6) months after pleading guilty of removing money from his accounts to avoid the funds being used to repay a benefits debt. He owed the benefits for overpayment, and moved money from his accounts to avoid the repayment. He was sentenced to six months in jail.

A harsh example I grant you, but still....

Former Directors of a ticketing firm that handled ticket sales for a large festival were each banned for ten (10) years for failing to hand over £618K to the local council. The disqualification was stated to serve as a reminder to all company directors of their responsibilities and the consequences of failing to maintain proper professional services.

The list of those Directors who have received bans and other charges is many and all can be viewed at the government’s insolvency service’s web site.

As you can see, for many of those charged and found guilty, there was a blatant misuse of authority and funds. But one can also see the huge responsibility that goes with being a Director.
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I get asked frequently where should i go for debt advice. Naturally I say the company I work for, but it comes down to the person and what they are looking to accomplish and how comfortable they are with the adviser or counsellor they are speaking with.

This article was written a while back, but it stills pertains to things today.


Where To Seek Debt Advice?


They say there are two (2) things best not discussed in pubs, politics and religion. I’m here to tell you of a third thing not to disclose or discuss, don’t tell anyone you are a debt adviser. If you are one and disclose it, the response you will usually receive is, “do I need to talk to you”. And that my friend, is the end of a quiet pint and reading the paper.

As a debt adviser, or should I say Senior Debt Adviser, that sounds much better, I get asked a lot, who should I go to for advice, advice on my debts and finances? Where can I get help with my debts?

There are many companies out there offering advice and assistance for those in debt or financial difficulties.

A starting point for many people is to phone the bank or credit card company that has the account, explaining that they are either going to be late with a payment or just cannot pay at all. For many bank or creditors, they may not really be able to do much of anything for you; they just want you to pay what is owed and that is that. Some creditors may refer you to an outside agency, but it would be the same if you were to find an outside company as well.

Next there are some charities set-up that state they can help people with their debt issues and personal finances. I can only share my experiences with what some of these charities can offer. Some may have qualified personnel who are experienced and trained in not only what options are available to someone in debt, but also what the ramifications are of each of these options and how they would relate to that person’s unique situation, however this is not what I have found. I would place these in the minority, and not the majority of these services.

It is not just enough knowing the options a person may have with their debts, but those options may need to be tailored for that person’s situation as there can be different aspects for everyone, and there can also be negative aspects of an option to be explained and/or avoided.

Something interesting and factual, as in it happened quite a few times, was a few different charities phoning me asking me for advice for their client. There are two things wrong with this scene, one is the charity may not have all the needed information for me to properly “help” them with this, as they are not trained in knowing what to ask, and secondly, why would the person who is seeking the advice not just contact me directly? Granted they may not know how to contact me, but the charity could simply say here is Jon’s number, he is a professional debt adviser and financial counsellor, ring him.

So lastly that brings us to the debt advice organisations and debt management firms that are out there assisting people with debt issues on a daily basis. Many of these companies have qualified people to help you in finding a solution for your debt or financial problem. And all should be licenced by the OFT/Office of Fair Trading, which has put into place guidelines for all debt companies to abide by.

But the best advice I can really give anyone seeking debt advice, is to find someone you feel comfortable with. A person or firm that not only listens to you, but also gives you impartial advice, not pushing you towards one programme or service. They listen to your situation and what you want to accomplish, and then advise you on what all the options are, and why those options will or will not work for you, and what the hazards may be for you, based on your circumstances, if you were to chose a particular option.

I would say when you find this person or company, this is who you want to work with for your debt advice and what services they have to offer.
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Changes to ROI/Republic of Ireland's Insolvency laws


Previously if you lived in Ireland/Republic of Ireland, and were insolvent and wanted to go bankrupt, the laws and rules for this were very harsh and antiquated. You were bankrupt for a very long tome, lost all your property (if you had any) and couldn’t get a bank account. This amongst many other undesirable side effects of being bankrupt.

Many people in Ireland would move to other countries, in particular the UK, where the insolvency laws were less harsh, in order to go bankrupt. In the UK you can include EU debt in a UK bankruptcy as long as you meet the residency requirements and can show the majority of your interests in the UK.

Recently the Irish government and courts took a long look at their insolvency laws and decided it was time for a change, and so they made those changes and came up with the Personal Insolvency Act 2012. This was a major change and the first change in many years, in the insolvency laws for Ireland, and a welcome change as well I might add.

In essence what the Insolvency Service of Ireland now has with this new insolvency act is to mimic the UK’s insolvency act of 1986, thus offering someone who is insolvent options with their debts instead of just going bankrupt. However there are some subtle changes. They also have changed the rules on laws on going bankrupt.

The three (3) new debt relief mechanisms are as follows:

A Debt Relief Notice or DRN: This is for people with €20,00 of debt or less and can allow for the debts to be written off after a three (3) years period of supervision. This is usually for unsecured debts, but may allow some secured debts.

This is for people with no surplus of income, no assets, and no prospects of paying off their debts. After the three year supervision period, the debts are written off.

A Debt Settlement Arrangement or DSA: This is for any unsecured debts of any limit, an can run for up to five (5) years.

This is for people who can afford to pay something to their creditors, but not the full payments or balances and need the courts intervention/help.

The person makes payments of what they can afford for five (5) years, and after that period any remaining balances are written off.

This is similar to a Debt Management Plan in the UK as it is a non-formal arrangement. The debtor needs creditors representing 65% of their debts to agree to this arrangement for it to work. At the end of the five years, the debtor is debt free as any remaining balances are written off.

A Personal Insolvency Arrangement or PIA: This is the agreed settlement of secured debts for up to three (3) million, although it can be increased, and also unsecured debts, usually over six (6) years.
This is a more formal debt arrangement, similar to our IVA/Individual Voluntary Arrangements.

These PIA’s must be set-up by an insolvency practitioner, and the debtor needs to be able to make repayments of some amount, and allows for both secured and unsecured debts.

Again it is a voluntary arrangement and requires 50% of the secured creditors to agree and 50% of the unsecured creditors.

At the end of the five years any remaining unsecured debt will be written off, but only the secured debt amounts specified in the PIA will be discharged or written off.

In addition to these new debt mechanisms being put into place, bankruptcy in Ireland is also to change.

Bankrupts in Ireland previously were bankrupt for a period of 12 years, this now will be reduced to three (3) years.

This is the biggest change in the law however there are some others, that also follow the UK’s insolvency and bankruptcy laws.

More information on this can be found at the Ireland’s Citizen’s Information web site.

These changes are to come into effect in June 2013.
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The number of women accounting for personal insolvencies has risen 30% in the past decade, and now women account for 49% of all personal insolvencies. If this trend continues, then by the end of 2013, women would account for the majority of insolvencies passing men.

This was according to research conducted by the charity, Debt Advice Foundation.

As for the reasoning behind this increase over time can be unclear. It can be speculated that perhaps it is due to the differences in pay between men and women, which the gap had been larger years ago.

It could also be due to the fact women may be addressing their financial and debt issues earlier than men do, causing there to be a spike in the number of female insolvencies.

The research showed a trend in younger women facing insolvency, ages 18-24. In this age group, two-thirds or 66% of insolvencies were by women. As you raise the age groupings the percentages fall: 54% are women in the age 25-34 group, and 48% in the 35-44 year olds.

The charity stated that “young people are not being taught the basics of working out a personal budget”. And I whole heartedly agree.

I and others have stated for years that part of the education curriculum should be courses on personal finance; note I said courses not just one (1) course or class/lesson. This needs to be ongoing as children go on through school.

The more educated we are about setting up a personal budget, credit, bank accounts, etc, the less we are likely to make a mistake.
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Recently I have been receiving a few questions from people who owed a debt to a bank in another country and have recently been contacted by a collection agency here in the UK. Or they owed a debt to their local bank and have not paid or heard from the bank for years only to be contacted by a collection agency stating the person now owes them the debt and money.

Debts can and are sold to collection agencies who then own the debt and the debtor would then owe that collection agency. This can even be done across different countries.

This article may help to explain this in more detail:

Can My Debts Be Sold?

Can an account or debt be sold to another bank, collection company, etc to be collected, the quick answer is.....YES.

It is a practice that has gone on for quite some time. Let’s say for example you owe HSBC, or 123 Bank or any lender for that matter, and you fall into arrears with the loan and then one day ABC Collections is phoning you asking you for payments. You’re like, I don’t owe ACB Collections any money, but you very well may. The collection firm could be collecting the debt for the bank you had the loan with, or they may have bought the debt from the debt, in which case it is their loan and you owe them.

This can get confusing for people, and if ti occurs, the collection firm is to provide you the required information as to their acquiring the loan/debt.

If you have numerous account and they get sold onto other companies, and then you try to pay them off or settle them, it can be very confusing as to who has the account, and whom to pay.

Another confusing aspect is if you move out of the country, or have debts in other countries.

Let’s say you have some debt here in the UK and move to America. It is possible the debt could be sold to an American debt collection firm, and they can chase you for payment there in accord with the laws and collection policies in that country.

This goes the same if you have UK debt and move to Australia or elsewhere. There are no guarantees the account could be sold on, but if it is, then the laws of that country come into play; and not all countries have as easy and lenient insolvency and collection laws as we do here in the UK.

So another thing to consider, and possibly think about if you have debts you cannot service and just think moving away will resolve it all. However, just because a debt is sold does not mean it cannot be included in a debt management plan, IVA or even bankruptcy.

Regards,

Jon
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Address Used In Bankruptcy


I get asked on a regular basis about what address someone should use when they go bankrupt; you use the address you are living at. Seems simple enough, but it isn’t.

People are concerned about the bankruptcy being shown at the address they use and it being published in the papers and ruining other people’s credit who may be living at that address.

And this is a valid concern, but once explained in more detail and clarified, it really isn’t an issue.

When you go bankrupt, or use any form of debt management, or update your creditors as to where you are living, you do need to use the address of where you are actually living. This in itself does not affect anyone else living at that address and in itself does not affect anyone else living at that address’s credit.

Bankruptcies previously were published in the London Gazette and can be published in the local papers, but not all local papers do this. So while it may be published in the papers, again, this doesn’t affect anyone else’s credit, although I can see where it may be confusing to someone reading the paper.

If you do not use the proper address where you are living in your bankruptcy, you are not giving accurate information and this could be seen as fraud. So not a path we would want to go down.

If you do not update your creditors with your new address if you move, it doesn’t change the fact you still owe the debt, and you are not just running away from it. Your creditors may still send post the address they have on file and you may not be aware of what is happening with the account; such as if they were to take you to court, etc.

So keeping your creditors informed and up to date with your whereabouts can be important.

What if you have no place to live, you are sofa surfing or in a hostel or have no real fixed address? Then to my mind going bankrupt may be a little further down your list of things to do as finding suitable accommodations may be a priority over going bankrupt.

And lastly, what if I go bankrupt and someone at the address of where I live applies or credit and the bankruptcy does affect their credit?

This should be rare, but it can happen as the address could show a bankruptcy there. The person affected has two options, they can have the bank or lender look closer at the underwriting of the loan, meaning investigate it a bit further and find out the person applying is not the person who went bankrupt, or as a last resort, the person affected can have a notice of disassociation placed on their credit history.

So where you live and the address you give, in insolvency, can be important.
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Hi,

If you list the creditor and the amount you know you owe them now in your bankruptcy, you will be fine. If they want to claim a higher/increased amount, so be it, but it will not change the fact you have listed them in your bankruptcy, regardless of the amount you owe.

Many times people go bankrupt and during the process interest and charges are added causing the balance to increase. The creditor is still included in the bankruptcy, regardless of the balance increase, the full amount owed is allowed.

There can be issues with this if the amount you owe is due to a criminal activity, such as fraud, etc. But then it becomes more of a legal matter.

Regards,

Jon
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Hi Bob and Rae,

That is a very good question, and one I unfortunately have no experience with.

You can always discuss this with the OR that handled your bankruptcy or issued the BRU; I'd like to think nothing ventured nothing lost. And it never hurts to ask.

Let me know how you get on and others here may have some advice as well.

Regards,

Jon
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The insolvency service has released the insolvency statistics for the 1st quarter of 2013.

There were a total of 25, 006 individual insolvencies in England and Wales for the first quarter of 2013. This figure represents a decrease of 12.9% from the same time last year (2012).

These insolvencies were made up of 6,663 bankruptcies, 7,219 DRO’s or Debt Relief Orders, and 11,124 IVA’s or Individual Voluntary Arrangements.

Bankruptcies were down 27% over this time last year, DRO’s were down 8.6% over this time last year, and IVA’s were down 4.9% over this time last year. This is consistent with the overall decline in all insolvencies. Also one of the first time DRO’s have been down since they were introduced in 2009.

Out of the total number of bankruptcies, 5,379 were petitioned on behalf of the debtor, the remaining were made bankrupt by a creditor. Creditor petition bankruptcies are falling and have been falling now for a few years.

So insolvencies are down initially for the first quarter of the year.
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Credit Before And After Bankruptcy



How important is credit?

Why do you need credit?

How bad does bankruptcy affect my credit?

Can I ever get credit again after bankruptcy?

How can I repair my credit?

I get asked these questions daily, and they are valid questions due to the nature of the world we live in these days, it seems you do need credit or access to credit to make certain purchases, travel, etc.

But do we really need credit? Yes and no. In the past people saved up for large purchases and about the only thing that was ever bought on time/credit was a house or property.

That has changed some, in that the cost of cars, and other new appliances we count on daily, are quite high and can be difficult to save for.

But what about bankruptcy and credit?

Bankruptcy is damaging to one’s credit history; it does stay on there for six (6) years, and does need to be disclosed if you are asked for life.

This does not mean you will never receive credit again, or that you will have to wait six years to ever get credit again either.

It is a process to re-build your credit and one that takes time.

One interesting thing is the number of people who we advise on bankruptcy as they are over-extended, drowning in debt, and need to go bankrupt; and are concerned if they will be able to ever get credit again, or can they ever buy a house.

While I can understand their concerns, they are getting a bit ahead of themselves as they cannot service the credit and debts they currently have, so worrying about new credit in the future seems a bit distant. And it was their good credit now that has helped to find them in the position they are in.

So let’s say the damage is done, the bankruptcy is over and you are starting out fresh, no debts. Feels good doesn’t it!

The first step is to send copies of the discharge notice in your bankruptcy to the major credit bureaus: Equfax Experian and Call Credit

They will update your credit history with the fact that the bankruptcy is over or discharged.

You can obtain a copy of the discharge notice from the Receiver in your bankruptcy, if they did not automatically send you one.

If you cannot get a nice of discharge from the Receiver, you can get one from the court where you were made bankrupt; unfortunately the court can charge a fee for this and last I heard the fee was £60, ouch.

Once this is done, the next step is to look into opening a savings account; it could be with who you have your basic account with during your bankruptcy.

Then by making regular deposits into the savings account will show a pattern.

In time you can look into opening a current account, this can be difficult depending on the bank, your wages, etc. But once you do this, you can request a very small overdraft of maybe £50 or £100.

These steps will help in re-building your credit, in addition to paying your rent on time, utilities, and your other daily and monthly living expenses.

I have been asked about pre-paid credit cards or secured credit cards.

If the card company reports to the credit bureaus, then they can be a help in re-building your credit. But to my knowledge, most pre-paid cards do not report to the credit bureaus.

What other obstacles might you face now that your bankruptcy has been discharged?

You may find it difficult to obtain various insurances; some insurance companies use credit as a part of their underwriting process and may reject you for a policy due to being bankrupt.

Even some employers use credit as a gauge or a part of the hiring process. Not that there has ever been a study to show a correlation between having been bankrupt and work ethics or commitment to work.

But as you can see there can be a few more hurdles to overcome.

However in time, it will all be better and you will be able to get credit.

One last credit question I do get asked a lot is will my bankruptcy affect anyone else’s credit?

Since bankruptcies are an individual thing, they should not affect someone else’s credit, however sometimes the address used is an issue.

The address where a person who has gone bankrupt has others living there and on occasion someone else has applied for credit and with the bankruptcy showing up at that address, they have been denied.

This can be remedied two ways, one by the bank or lender looking closer at the details and noting it is not the person who applied that went bankrupt.

The second option is if it is more of a problem, to have a notice of disassociation placed on the credit report or the person who did not go bankrupt, but may be experiencing problems because the bankruptcy has become associated with the address, they both reside at.

Hopefully this little bit of writing gives you some insight into what can be done to re-establish yourself credit wise after going bankrupt.
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I have been receiving various questions about getting discharged from bankruptcy earlier than a year and also about credit after bankruptcy, so I thought I would post this writing and also one later on credit after bankruptcy.



Receiving An Early Discharge From Bankruptcy

Can I be discharged from bankruptcy before 12 months?

Can I be kept in bankruptcy longer than 12 months?

What do I do afterwards?

How can I get a notice or certificate to show my bankruptcy has been discharged?


Under the current rules/laws for bankruptcy, most people who are made bankrupt are discharged form their bankruptcy within 12 months or one (1) year.

So 12 months after they have been made bankrupt the bankrutpcy is over, discharged, done with, finished.

For those with property or their bankruptcies are more complex, they can still receive the discharge from bankruptcy within 12 months, but there may be some lingering aspects, such as a charge on a property, or property to be disposed of.

However for some people whose bankruptcies are fairly straight forward, such as there is no property involved, etc, they can be discharged from bankrutpcy before the usual 12 months and receive an early discharge.

Once a bankruptcy has been discharged it is over and you are no longer under the restrictions of being bankrupt, and you an begin your new financial life. So to receive this notice early, allows you to begin that new life earlier.

Now I cannot say all the conditions that must be met for someone to receive an early discharge as it can vary among bankruptcies, but it is possible to receive one.

Also, as to how early one may receive this, I cannot say, but have heard as soon as eight ( months into the bankruptcy.

So you can be discharged from bankruptcy sooner than 12 months.

As for being kept bankrupt longer than 12 months, in most instances you would still be discharged after 12 months, but if the Reciver felt there had been a misuse of credit, fraud, etc, they can issue a BRO or Bankruptcy Restriction Order, keeping you under the restritions of bankruptcy longer than the usual 12 months and up to 15 years.

Your bankruptcy may be over or discharged, but you are still under its restrictions.

Once your bankruptcy has been discharged you should receive a notice of the discharge saying it is over. If the Receiver does not send you one, you can contact them to request one and/or also obtain one at the court where you were made bankrupt. The court can charge a fee for this notice and that fee is £60.

You would then want to send copies of the discharge notice to the credit bureaus, Equifax, Experian, and Call Credit, so they can update thier records related to the bankruptcy showing on your credit file.
This will help you in re-establishing yourself.
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If you need assistance in completing the bankruptcy forms, there are services out there to help, even on this site there is an assistance service.

Getting help with the bankruptcy fees can be difficult. Some utility providers have grants as well as some charities to help people with the fees to go bankrupt. You would need to research and look around and contact some of them for more information on this.

You can try these links, but grants are not always available.

www.edfenergytrust.org.uk/help/grants-fo...dividuals-help-pages

www.britishgasenergytrust.org.uk/grants_...dividuals/index.html

www.uutf.org.uk/files/UUTF%20-%20STOP%20...%20-%20MAY%202007%20(3).pdf

Regards,

Jon
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Hi,

I understand your concerns, but the first thing to keep in mind and remember is that benefits are not taken to pay into a bankruptcy. So you would have no worries there.

Also, have you sat down and put pen to paper to see what all your expenditures and benefits you receive add up to? I would venture you don't have any surplus funds to pay into a bankruptcy anyway.

If all your household income is completely based on benefits and allowances as you state, you should have no issues with going bankrupt, and should qualify for a reduction in the bankruptcy fees

Regards,

Jon
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I have repeatedly explained to clients over the years that you will not go to jail or prison just for being in debt or for going bankrupt, and this still remains true, however more and more people are testing the system and finding themselves in jail for a few months, or receiving suspended sentences.

These what I use to refer to as rare instances, seem to be coming up more and more. Usually for some silly, well actually stupid thing someone does when they go bankrupt. So they don't go to jail just for being bankrupt.

Recently a gentleman was sentenced to four (4) months in prison, suspended for 18 months, for not being honest with the OR in his bankruptcy.

The gentleman used money from re-mortgaging some land to pay off his wife's debts. He told the OR that he had used the money to pay off loan sharks, which as they would have been a creditor, the money could not be taken back by the OR. The bankrupt man refused to provide details of the payments as he stated it may have an affect on him. Later after being investigated he pleaded guilty to this not being true.

It just goes to show you people should not try such silly things when the courts and officials are involved.

Regards,

Jon
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