Frequently Asked Questions (FAQ)
Listed below are some of our most commonly asked questions:
Will I lose my home?
The official receiver as trustee (or an insolvency practitioner appointed as trustee in place of the official receiver) may have to sell your home to help pay your bankruptcy debts. This applies whether the home is freehold or leasehold and whether it is solely or jointly owned.
If your home is mortgaged, the lender may be able to sell your home if you don’t carry on with your mortgage payments. You should consider contacting your lender about your bankruptcy and your mortgage payments.
When will the official receiver or trustee sell my home?
If your husband, wife or children are living with you, it may be possible for the sale to be put off until the end of the first year after your bankruptcy. This gives you time to make other housing arrangements.
After that time, the court will only refuse an order for sale in exceptional circumstances or if the value of the trustee’s interest in the property is worth less than £1,000.
What are the trustee’s options for dealing with my home?
Within 3 years the trustee must:
- realise the interest (sell it to somebody); or
- apply for an order of possession or sale; or
- apply for a charging order in respect of the value of the interest; or
- enter into an agreement with you regarding the interest.
What is the annulment of a bankruptcy order?
It is a procedure that cancels your bankruptcy order. An order of annulment can only be made by the court.
You can apply for an annulment at any time if:
- the bankruptcy order should not have been made, for example because the proper steps were not taken when obtaining the order; or
- all your bankruptcy debts and the fees and expenses of the bankruptcy proceedings have been either paid in full or secured (guaranteed) to the satisfaction of the court; or
- you have reached an agreement called an “individual voluntary arrangement” with your creditors to repay all or part of your debts.
What is the effect of the annulment of a bankruptcy order?
An annulment has the effect in law that the bankruptcy order was never made. You will revert to your pre-bankruptcy status. Disposals of your property by the official receiver and the trustee will remain valid and will not be reversed. Any other assets will be returned. You will be liable for any of your debts that have not been paid in the bankruptcy.
Can I stop the bankruptcy order being advertised?
The official receiver must advertise the bankruptcy order in the ‘London Gazette’ (an official publication with contains legal notices). In addition, the official receiver has discretion to advertise the order in any other way, if they think it is appropriate to do so.
Can I have a bank account?
There is nothing in the insolvency legislation which prevents a bankrupt from holding an account, but you should tell the bank or building society that you are bankrupt, since they may wish to impose conditions and limitations e.g. not allow a cheque guarantee card. You should not obtain overdraft facilities without telling the bank that you are bankrupt.
Can a bankrupt still trade?
If you are bankrupt you are still allowed to earn a living, and can do this by being self-employed or by carrying on a business, as long as you do not disobey the law by obtaining credit of £500 or more without disclosing that you are an undischarged bankrupt, and as long as you do not use another name unless you tell those with whom you trade of the name under which you were adjudged bankrupt. If you earn more than sufficient to meet the reasonable domestic needs of yourself and your family, the Official Receiver may apply for an Income Payments Order (IPO).
When will I be discharged?
If the bankruptcy order was made on or after 1 April 2004 the automatic discharge date is one year.
Note: Your discharge may be suspended if you have failed to carry out your duties under The Insolvency Act.
How do I obtain a certificate of discharge?
You should write to the court where you were adjudged bankrupt quoting your most recent case reference.
Note: the court fee for a certificate of discharge is £60.
If I am made bankrupt, will I still have to repay my student loan?
Yes. Since 1 September 2004 all outstanding student loans cannot be claimed in bankruptcy. They remain the responsibility of the (former) student to repay within the terms of the loan arrangement.If you were made bankrupt before 1 September 2004 you may still have to repay your student loan. Clarification should be requested from the Official Receiver who is dealing with your affairs.