partner feature
Bankruptcy Y
ou may feel that a ‘Guide to Bankruptcy’ is needed as bankruptcy does not necessarily mean that you have to lose your house, furniture, car
or business – read on! Generally speaking, bankruptcy law is
not punitive. In fact the government’s own leafl et on bankruptcy says that 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’. Bankruptcies now last for a period of one
year, maybe even shorter if your bankruptcy estate is considered to be ‘straight forward’. A bankrupt is subject to certain restrictions and implications during the one-year period of bankruptcy to include the following:
• The bankrupt cannot take credit of a sum greater than £500 without fi rst advising that person who he wishes to borrow the money from that he is bankrupt. In other words, a bankrupt can still borrow, say, £10,000 as long as the lender is advised in the fi rst
instance that a bankruptcy order is in place. • Any windfalls or inheritances received during the period of bankruptcy would fall into the bankruptcy estate. In other words, if you are a benefi ciary in somebody’s will and they sadly pass-away during your bankruptcy period, then the inheritance will pass straight to the trustee in bankruptcy for the benefi t of the bankruptcy creditors. Is planning pre- bankruptcy therefore the key? • All bank accounts are frozen on the making of a bankruptcy order. That does not mean, however, that a bankrupt cannot have a bank account. The Co-Operative Bank has a dedicated bank account in that regard. Over the next few editions of The Business Quarter I will be looking at how bankruptcy would effect the following personal
possessions: your home, furniture, car, your business, your income and your ‘tools of trade.
A guide to what happens to the things that matter to you Before considering whether bankruptcy
is the right route for you it is important that you obtain professional advice as each individuals circumstances are different and what is right for one person is not necessarily right for the next person. Depending on your circumstances there are alternatives to a bankruptcy.
For free initial confi dential advice contact Suzi Purnell, of Purnells, on 01633 214712 or e-mail:
suzi@purnells.co.uk. Purnells is based at St Marks House, 3 Gold Tops, Newport, South Wales, NP20 4PG.
THEbusiness QUARTER
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