If you have accumulated debt that you are unable to pay due to your financial situation, bankruptcy is one option available to you. Despite there being minor restrictions, bankruptcy proceedings can lift the weight of debt off your shoulders as long as your assets are divided equally among your creditors.
Bankruptcy can happen to anyone, even partnership members. When dealing with insolvency matters for partnerships and companies, there is a different strategy to follow; our knowledgeable solicitors can offer further insights and information on this when contacted. Once a bankruptcy petition has been presented, the court is able to conduct a bankruptcy order. While you yourself can present the petition, if you owe your creditors more than £750, your creditors will be able to present the petition to the courts.
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.