Bankruptcy Help

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Bankruptcy. An individual or a creditor can apply for a bankruptcy order if the debt is at least £750.00. The amount of the debt must not be in dispute. If an individual owed you £800.00 for a service you supplied and would not pay you due to a dispute, you could apply for a bankruptcy order, however, the court would reject the order based on the debtor raising the dispute.

The court will not allow an order if there is any doubt whatsoever as to the validity of the debt (even if the debtor is more than likely lying). If the individual could not pay you due to a lack of money, you would usually be successful.

The usual time for a bankrupt to automatically be discharged is two years (if it is your first time as a bankrupt and unsecured creditors are less than £20,000), and three years if unsecured creditors are in excess of £20,000.

The purpose of bankruptcy is to convert your possessions, and any wages you receive, into lump sum and instalment payments for creditors. A debtors purpose to apply for their own bankruptcy is to form a moratorium (a group of creditors) to agree part repayment of all outstanding debts, and when the agreed repayment has been met, to have a ‘clean slate’.