Bankruptcy Insolvency

Bankruptcy is one way of dealing with debts you cannot pay. Bankruptcy proceedings free you from overwhelming debts so you can make a fresh start, subject to some restrictions and make sure your assets are shared out fairly among your creditors. Anyone can become bankrupt, including individual members of a partnership. There are different insolvency procedures for dealing with companies and for partnerships themselves. If you need further information on insolvency please arrange to see us. A court makes a bankruptcy order only after a bankruptcy petition has been presented. It is usually presented either:

  1. by yourself (debtor’s petition); or
  2. by one or more creditors who are owed at least £750 by you and that amount is unsecured (creditor’s petition).

A bankruptcy order can still be made even if you refuse to acknowledge the proceedings or refuse to agree to them.

Debt Relief Orders

At Lovell Chohan Solicitors we are able to advise you on the alternative to bankruptcy proceedings and guide you through debt management or debt relief orders.

  • For clients who do not own their own home, or a have little surplus income and low assets together with less than £15,000 worth of debt they may be able to apply for a debt relief order (DRO).
  • The order is made for a period of 12 months and during this period the creditors named on the DRO are unable to take any steps or action to recover those debts without the permission of the Court. At the conclusion of the 12 months and as long as your circumstances and financial position are no better that at the outset you will be discharged from the debts that were included in the DRO.

DRO’s are administered by The Insolvency Service in partnership with debt advisors and do not involve formal Court procedure or the need to attend Courts.

To apply for a DRO you must meet the following requirements:

You must be unable to pay your debts

  • You must owe less than £15,000
  • You can own a car to the value of £1000 but the total value of your other assets must not exceed £300.
  • After deduction of tax, national insurance contributions and normal household expenditure, your disposable income must be no more than £50.00 a month.
  • You must be domiciled in England and Wales, or sometime in the last 3 years have been living or carrying on a business in England or Wales.
  • You must not have been subject to another DRO within the last 6 years.
  • You must not be involved in another formal insolvency procedure at the time you make an application

  Please contact us if you need to discuss matters further.

 

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