How long does Bankruptcy last?
A bankrupt may be discharged (freed from obligations under the bankruptcy order) after one year.Discharge is not necessarily automatic and can be postponed by the Court.
In addition, the discharge may not necessarily free that person from certain all liabilities and does not mean that unrealised assets will be safeguarded.Discharge releases the bankrupt from most of the debts owed at the date of the bankruptcy order. Exceptions include debts arising from fraud, certain crimes and fines. Certain other debts such as damages or personal injury or money owed under family proceedings (such as maintenance) will be released only if the Court agrees.If you have been declared bankrupt before, within the last 15 years, you will not be automatically discharged. You will only be able to apply to the Court for a discharge 5 years after the date of your current bankruptcy order; even then the Court may refuse or delay discharge.
Assets Obtained Before Discharge
When discharged there may still be assets that were owned either when the bankruptcy began or which were acquired before discharge, which the Trustee has not yet dealt with. These may include property, an insurance or pension policy, an interest in a will or trust fund etc.These assets are still controlled by the Trustee, who can deal with them at any time in the future. This may not be for a number of years after your discharge. In certain cases such as your family’s home and some types of insurance policy, a spouse, a relative or a friend may want to buy your interest, in which case, they are to get in touch with the Trustee straight away to find out how much they would have to pay.You must tell the Official Receiver about any assets that may have been obtained after the Trustee has finished dealing with your case but before you are discharged. These assets could be claimed to pay your creditors.You have a duty to continue to assist your Trustee after you have been discharged.
Assets Obtained After Discharge
After discharge, any assets that are acquired may usually be kept.
What if I become bankrupt again?
Bankruptcy deals with your debts at the date of the bankruptcy order. After that date you should manage your finances more carefully. However, if you then incur new debts, this could result in a further bankruptcy order even before you are discharged from the first bankruptcy, which may have more serious consequences such as, prosecution, if the debts were obtained without disclosing your bankruptcy.
N.B. Are you sure declaring bankruptcy is the only option?
But before you apply for bankruptcy make sure you're certain you've considered the following questions:
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