Bankruptcy

Hello and welcome to my latest blog. For today’s instalment I am going to be talking about bankruptcy. I want to continue on with the journey of making everyone savvy with all issues relating to debt and getting out of it.

Bankruptcy is usually thought of as the last resort in solving financial problems. From my past experience, whenever the word is mentioned people get instantly scared and go into a bit of a panic.

In the past Bankruptcy has always carried a stigma with it, it has always been thought of as a big no no, or not something that should be done easily. However over recent years, with more and more people experiencing problems with debt, it has become more acceptable for someone to become bankrupt.

In a nutshell you would either register for bankruptcy yourself or one of your creditors would petition for bankruptcy in order for them to attempt to get the money that is owed to them. You would usually have greater debts than you do assets meaning that you are insolvent. When you are made bankrupt you will be relieved of all of your unsecured debts.

The bankruptcy will usually last for one year, however you could be required to pay an Income Payment Order or IPO which could last for three years and this is where you pay your surplus income into the bankruptcy to pay something to your creditors. At the end of the term your debts become ‘discharged’ meaning that the balance will be cleared and you will no longer be liable for paying anything to the creditors. For the duration of the bankruptcy you will be assigned an Official Receiver or (OR) who will be in charge of your case and will oversee everything. One of the important roles of the OR will be to protect any assets that you may have such as a car, house or motorhome. They will also be asked to investigate your debts, how and why the money was spent and what else has been done with the funds.

All assets are at risk when going bankrupt such as your house, car, motorhome or any household possession. Your creditors would seek anything that they deem to be of excessive value. However your creditors cannot ask you to sell any equipment that is needed for work purposes or household items such as clothing, bedding, furniture that is needed by the family.

The bankruptcy order will remain on your credit reference file for six years, after that you will have a ‘fresh start’. However the bankruptcy could have certain restrictions relating to the job you can do, or what credit you can take out in future.

Bankruptcy doesn’t have to be all bad, look at this list of people who were made bankrupt and have gone on to do bigger and better things and learned from their mistakes is the past.

Donald Trump

Walt Disney

Elton John

Simon Cowell

Peter Jones

For further information on Bankruptcy click here and follow the links.

Hopefully this has helped clear up bankruptcy for you a little. If you do have any queries about anything you can always ask and remember our helpline number is 0800 2802816.

Don’t forget you can find me on Twitter and Facebook

Written by davemac on January 18th, 2011

Filed Under  debt advice, debt help, Debt News, Payplan   |  Trackback  |   2 Comments

Andrew Smith (@Andrew_F_Smith) says

I am really interested in a couple of things revealed by the latest bankruptcy statistics. First that around a third of all bankrupts are now subject to an Income Payments Order or Agreement (usually an “agreement” I guess) and second that the number of people being pushed into bankruptcy, whilst still a small minority, is going up.

I blogged about this, here: http://www.cleardebt.co.uk/blog/q3-2011-insolvency-figures-is-bankruptcy-still-an-easy-option_42132

Stuart says

It might also be worth pointing out that the risk of being stigmatised by bankruptcy is now much reduced by it not being advertised in the local press anymore.

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Posted in: Bankruptcy

Mortgage adviser’s £1.6m con foiled by bankruptcy

A respected mortgage adviser who was introduced to ‘cherry-picked gullible clients’ by a partner-in crime-has been given a two-year suspended prison sentence when his £1.6 million fraud was uncovered after his bankruptcy sparked an investigation into his affairs.

Wealthy Gott used his mortgage advice company as a cover for the scam. He wore expensive suits and took frequent foreign holidays, boasted that he earned £170,000 a year as Managing Director of Red Brick Mortgage Services, reported the Daily Mail.

His small firm provided loans for a string of friends and acquaintances between 2002 and 2007, conning the banks out of £1.6 million in all.

Anthony Gott, 46, worked with partner-in-crime David Hood, 47, in a jointly run £1 million mortgage scam. Hood would cherry-pick gullible clients to make the applications while the operation was fronted by Gott. But the pair were caught when Gott became greedy and went bankrupt, sparking an investigation into his affairs.

The two men, who dreamed of ‘executive size’ pay packets, conned banks out of £1,034,017 in house loans over five years. The remaining £600,000 attained was presumably of Gott’s own accord.

Customers filled in fake occupations and incomes on mortgage applications to get loans up to six times what they would normally be able to borrow.

The fraudsters used self-certification mortgages open to the self-employed to con High Street banks and loan companies into advancing money for properties.

Gott employed 25 people and lived in a £450,000 converted barn in Rawcliffe with wife Kim and had used some of his £800,000 ill-gotten gains to buy a swimming pool and decorate his home.

The joint fraud operated from Gott’s offices near Goole, but Hood hid vital financial papers in a council lock-up garage.

Hood, from Goole in East Yorkshire, traded in second-hand goods and managed a burger van as a cover for his illegal schemes.

Wheeler-dealer Hood would sign fake mortgage applications and was determined to earn a fortune through his dodgy deals. He even bought five buy-to-let properties of his own.

Hood pleaded guilty at Hull Crown Court to two charges of obtaining £231,000 by deception. His girlfriend Tina Lacy, of Hemmingbrough, pleaded guilty to three charges of obtaining money transfers by deception and one of fraud.

Hood recommended customers to Gott for a commission. Despite being jailed in 1990 for obtaining a mortgage by deception, he took out two false mortgages in 2003 and 2006 on his own home.

Judge James Sampson gave Gott a two-year suspended prison sentence, while Hood and his girlfriend were given 18-month suspended prison sentences and 300 hours community punishment.

Judge Sampson told Gott: “It was dishonesty and greedy behaviour on your part, which took advantage of the greed of lenders.

“What the people who have signed your character references should realise is, you are a thoroughly dishonest man.”

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Posted in: advisers,Bankruptcy,foiled,mortgage

Government plans offer protection from bankruptcy threats

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We aim to reduce debt in the shortest possible time. We are members of DEMSA - (The Debt Managers Standards Association). We adhere to the code of conduct as set out by DEMSA which aims to protect the interests of both consumers and lenders. The DEMSA code of practice is approved under the OFT (Office of Fair Trading) Consumer Codes Approval Scheme (CCAS).

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Posted in: Bankruptcy,Government,offer,plans,protection,threats

HMRC crack downs on business owners who see bankruptcy as an easy solution

HM Revenue & Customs (HMRC) is reportedly starting to take a tougher line on small business owners who see bankruptcy as an easy solution to theirs and their company’s tax debt problems.

Officials at the deparatment have become increasingly concerned about unpaid taxes amongst the owners of small businesses. It seems that many of these indebted entrepreneurs are using bankruptcy as a way to tackle their tax debt problem.

Leading law firm Wedlake Bell has warned that HMRC will start to crack down on those who see bankruptcy as a way to avoid facing up to their tax responsibilities. Edward Starling, who is the head of business recoveries at the law firm, said:

“The authorities are making an example of business owners who have allowed their businesses to run up insurmountable tax debts by banning them from involvement in senior management positions of a company for a long time,”

Meanwhile, the Insolvency Service has reported that the number of bankruptcy restriction orders it has secured has increased by 21 per cent in the last year. These orders, which are granted only when a court is convinced that the dishonest or reckless behaviour of company directors contributed significantly to a business’ debt problems, were issued to 443 business owners in the last twelve months.

This is a huge leap compared to four years ago, when only 80 bankruptcy restriction orders were obtained. If a business owner is issued such an order, it limits their access to credit and may even stop them heading up a company for up to 15 years.

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Posted in: Bankruptcy,business,crack,downs,owners,solution

Debt picture worsens for Scots as bankruptcy jumps by 25%

Just days after it was revealed that Scottish people have taken on more debt than the rest of Britain, it has now emerged that bankruptcy cases north of the border have soared dramatically in the last few months.

Accountant in Bankruptcy (AIB), the body responsible for personal insolvency in Scotland, recorded an increase of 25 per cent in the number of people filing or being pushed into bankruptcy in the last four months. A total of 5,000 people were declared bankrupt in Scotland between the months of April and June this year, a figure which is down 1 per cent compared to the same period in the previous year but is very worrying nonetheless.

This increase mirrors the findings of similar research by the insolvency group R3, which revealed that 539,000 Scots have seen their debt problems worsen in the last three months. These people admitted taking on more credit card debt as well as loans and increased overdrafts in order to cover their spending and outgoings.
One charity that is dealing with the crisis, Money Advice Scotland, expressed concern at these recent findings but warned that the debt management situation in Scotland could get worse before any improvement can be seen. Convenor of the charity’s board, Christine Sinclair, explained:
“Increases in the cost of living, people struggling to pay credit cards and loans will have a bigger impact to come on people with debt problems. Yes we have seen some impact already, but with the big rises in utilities, gas and electricity, I think it will actually get worse before it gets better.”

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Posted in: Bankruptcy,jumps,picture,Scots,worsens

Ballymena brothers banned from being company bosses after bankruptcy

Two brothers who ran businesses in the Country Antrim town of Ballymena in Northern Ireland have been banned from being company directors after they were forced into bankruptcy.
Joseph and Gerard McLarnon were brother and business partners who ran a hotel management company called MCL Investments (NI), which formerly operated the Leighinmohr House Hotel in Ballymena. The hotel is still up and running, but is operated by another company.

MCL Investments (NI) ran up huge debt problems under the direction of the brothers, and was eventually pushed into administration in summer 2009. The company had debt management problems in excess of two million pounds, whilst only having assets of £253,000.

At the time it wound down and all of its debt problems were revealed, it was found that MCL Investments (NI) owed nearly £1 million to unsecured creditors, £500,000 to the bank and £625,000 in unpaid tax. An investigation undertaken by the Department of Enterprise, Trade and Investment suggested that the brothers had effectively financed the running of their hotel by not paying tax.
The investigation also found that the brothers had misused around £484,000 of company money by lending it to themselves and other related parties.

The brothers themselves faced personal bankruptcy soon after their company was dissolved, with Gerald McLarnon being declared bankrupt in October 2009 and Joseph McLarnon being declared bankrupt in November 2010. They have both been banned from acting as company directors for a period of at least eight years.

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Posted in: after,Ballymena,Bankruptcy,banned,being,bosses,brothers,Company

Football legend Colin Hendry discharged from bankruptcy

The retired Scottish footballer Colin Hendry has officially been discharged from bankruptcy, to the annoyance of creditors who will only recoup £36,000 of the £2.1 million he owes.

Hendry, who formerly captained both Scotland and Blackburn Rovers football teams, was forced into bankruptcy in June 2010 after his debt problems spiralled out of control. The former defender was said to have turned to alcohol and gambling to cope with the death of his wife, Denise, in July 2009.

By the time he was declared bankrupt, Hendry had racked up £1.3 million in tax debt problems with HM Revenue and Customer (HMRC). He also owed £35,000 to his brother, £10,000 to the parents of his late wife and £65,000 to his late father’s estate. A number of Hendry’s most pressing debt problems are said to have been caused by the former footballer squandering his wealth on gambling.
After the custom 12 month period, Hendry has now been discharged from bankruptcy. This news has angered his creditors, after it was revealed that the retired star will only be paying back less than 2 per cent of his original debt.

One of Hendry’s former friends, Hector McFarlane, was owed £95,000 by Hendry. He is reportedly furious that the ex-player lived and continues to live a luxury lifestyle but will not be fully paying back his creditors. McFarlane told the Daily Record:
“I am just flabbergasted. I stand to get back £1800 of the money I loaned him. It’s an absolute disgrace.”
“My wife and I have not received one penny of the £95,000 he owed us, while he can get on with his life.”

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Posted in: Bankruptcy,Colin,discharged,football,Hendry,legend

Glasgow builder given record loan ban after breaching bankruptcy terms

A builder from Glasgow has been banned from applying for loans or acting as a company director for seven years after he broke the terms of his bankruptcy agreement.

John Henry, 45, was brought before Stirling Sheriff Court accused of continuing to trade despite being declared bankrupt. A major investigation was launched into Mr Henry and his construction business by Accountant in Bankruptcy (AiB), which is the insolvency agency for the Scottish Government, and a number of fraudulent activities were revealed.

Mr Henry was found to have used a variety of methods and a number of different company names to keep his business going, even though he himself had been declared bankrupt in 2009 due to his inability to tackle his debt problems. He was also found to have neglected his tax obligations for his employees, as well as failing to keep accurate business records.

A spokesperson for the AiB said:

“Mr Henry was declared bankrupt in 2009. However, he continued to trade when he knew or ought to have known that he was unable to pay his debts, incurring over £100,000 of additional credit over a four-month period.

“Mr Henry had continued trading in the construction industry across the west of Scotland while using a variety of different company names. As a result of his misconduct many businesses, organisations and consumers may have suffered financial hardship.”

As part of an unprecedented Bankruptcy Restriction Order, the court told Mr Henry that he could not head up a company nor apply for a loan for at least seven years.

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Posted in: after,Bankruptcy,breaching,builder,given,Glasgow,record,terms

Is bankruptcy still affordable for Britons?

After the cost of bankruptcy fees rose by 17 per cent this year, Brits have been left wondering whether filing for bankruptcy is still an affordable option.

The hike in deposit fees means that individuals or creditors must produce a substantially larger sum of money in order to secure a court order, and comes as a further reminder of the nation’s continuing debt troubles. Insolvency expert Melanie Giles explained: “Bankruptcy is becoming an option that is no longer there for those who may need it the most. “Individuals, who may be in debt through no fault of their own, perhaps through divorce, loss of employment or illness, may be being denied bankruptcy because they simply can't afford the application and Court costs.”The deposit that must be paid in order for an individual to be declared bankrupt has risen sharply from £450 to £525. In cases where a creditor is petitioning for the bankruptcy of an individual owing them money, the cost has also risen by 17 per cent, from £600 to £700.The costs would need to be paid to an official receiver, who is a civil servant in the Insolvency Service and an officer of the court. The deposit, a down-payment on management fees payable once a court order is obtained, is paid to an official receiver before they receive the rest of the actual management fees for handling the bankruptcy. Personal debt expert James Falla told Beat My Debt: "If you are already struggling to pay your bills, then trying to get together the £700 required by the bankruptcy court can be a real problem."Rumours have been circulating about the basis for the rise in deposit prices. Melanie Giles suggests that the reason is due to the government’s deficit reducing drive. “The main reason that the cost of declaring bankruptcy has gone up is because the Insolvency Service needs to bolster its own finances as a result of government public sector cuts,” she explained. There have also been suggestions that another reason for the deposit rise is due to the fact that official receivers have found it increasingly difficult in recent months to collect fees owed for handling bankruptcies. Whilst those with assets have traditionally been more secure, the sliding value of assets caused by the uncertain economy has resulted in increasing bad debts. The increase in deposit fees being charged has given rise to valuable questions about how to ensure that bankruptcy remains a viable option for individuals. Perhaps, ultimately, what the industry needs is a government initiative designed to help provide funding for those without the means to pay.
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Posted in: affordable,Bankruptcy,Britons,still

Man caught breaking bankruptcy agreement by running business

A man from Caythorpe in Lincolnshire has been caught running a business even though it breaks the terms of his bankruptcy agreement.

Martin Coaley, 55, declared bankruptcy after his businesses, Badger Commissioning Ltd, failed in January 2002. However, he became the sole director of another company, Badger Consulting Ltd, five years later, even though he was still an undischarged bankrupt who was banned from running any business venture. He took control of the company after his mother resigned her position as director.

Mr Coaley ran the second company for two years before it went into administration with tax debt problems of around £24,000. HM Revenue and Customs investigated Badger Consulting Ltd and found that record keeping was extremely lax at the company and that there was at least £54,000 in income that was unaccounted for.

In August 2010, Mr Coaley was banned for running any kind of company for at least nine years. At a recent hearing at Lincoln Crown Court, he admitted the charges made against him. These included acting as a director whilst an undischarged bankrupt, failing to keep accurate financial records and neglecting to give all of the necessary information to the receiver.

At the hearing, recorder Christopher Goodchild said to Mr Coaley:

“You are no doubt extremely good at your job but as a businessman you are useless.”

Mr Coaley was given a two-year community order including supervision for his misconduct, as well as being ordered to complete 100 hours of unpaid work.

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Posted in: Agreement,Bankruptcy,Breaking,business,caught,running

Real Housewives’ star Sonja Morgan faces losing her home over bankruptcy

Despite starring in hit US TV show Real Housewives of New York, the reality star Sonja Morgan has revealed that she could lose her home after declaring bankruptcy and fighting a divorce settlement battle with her former husband.

Morgan first spoke of her financial woes during episodes of Season 4 of the popular Real Housewives series. Last month, viewers watched the 47-year-old confess to her friends and fellow housewives that she had filed for bankruptcy after racking up debt problems of $19 million.

According to a report in the New York Post, Morgan’s debt problems began in 2006 when she agreed to finance a film but then reneged on the deal as she had just been served with divorce papers. She was successfully sued by the production company and in September 2009, a Californian federal jury ordered Morgan to pay out $7.06 million in damages.

The mother of one is now facing further money troubles as she battles her former husband, the 80-year-old millionaire John Adams Morgan, over a divorce settlement of $3 million. Morgan has now revealed that she faces losing her $6 million home in New York as a result of her debt problems.

Morgan has told the New York Post that she is banned from visiting properties that she co-owns with her former husband, whilst he himself lives on a $19 million private island near Connecticut. She said:

“I’m sure the world thinks, ‘Sonja doesn’t have to worry, she’s got that husband there for her’, but I’m on my own.”

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Posted in: Bankruptcy,faces,Housewives,losing,Morgan,Sonja

Property developer Ken Campbell avoids bankruptcy with IVA

The property developer Ken Campbell has reportedly applied for an individual voluntary arrangement (IVA) in order to stave off bankruptcy.

Whilst the full extent of Campbell’s debt management problems has not been revealed, his financial situation is believed to be so dire that he is fighting off bankruptcy. In order to do so, Campbell has taken the IVA option, in which a portion of his debt will be written off and his outstanding debt will be gradually repaid.

As part of the agreement, Campbell will see 63 per cent of his debt written off as he has agreed to pay his creditors 37p for every pound he owes them, provided of course that they accept his offer.

According to BBC News, a letter has been sent to Campbell’s creditors, in which it states that if they reject the offer and the property developer goes through bankruptcy, they may end up with nothing. Also included in the letter is a proposal to “wind down” Campbell’s construction business, which should help the debtor recover some funds. The creditors are set to vote on Campbell’s offer at the end of the month.

Campbell is perhaps best known for lending £25,000 to controversial Northern Ireland Unionist politician and First Minister’s wife Iris Robinson during the scandal of her extra-marital affair with a 19-year-old man.

The loan was reportedly sought so that Robinson could help her young paramour launch a business venture. However, it is not believed that this loan has contributed in any way to Campbell’s financial problems, as his solicitor has confirmed that most of the debt has since been repaid.

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Posted in: avoids,Bankruptcy,Campbell,developer,Property

Princess Diana’s dresses under the hammer as owner faces bankruptcy

Iconic dresses worn by the late Princess Diana, at pivotal moments in life, are to be sold at auction after the American businesswoman who owned them filed for bankruptcy.

Maureen Rorech Dunkel, a 50-year-old businesswoman based in Tampa, Florida, bought fourteen of Diana’s gowns at Christie’s in June 1997, just months before the tragic car accident in which the princess lost her life. The intention was to continue Diana’s legacy by exhibiting the dresses all over the world, via a charitable foundation Ms Dunkel set up after purchasing them.

However, due to numerous failed exhibitions, Ms Dunkel has instead found herself with debt problems to the tune of nearly $2.5 million. She filed for bankruptcy last year, after attempting to use the dresses as collateral for a $1.5 million loan she needed for a housing project. The project unfortunately failed, and Ms Dunkel must auction off the historic garments in order to raise money to pay her many creditors.

The pieces up for sale at the Waddington’s auction house in Toronto, Canada, include a midnight blue Victor Edelstein dress worn by Princess Diana at a White House event in 1985, at which she was pictured dancing with actor John Travolta. There are also two dresses used in Diana’s iconic photo shoots for Vanity Fair, which were shot by photographer Mario Testino.

Ms Dunkel expects to raise around $4 million in total from the sale of the fourteen dresses, some of which will go towards tackling her debt problems. A proportion of the proceeds will also go to the National Ballet School of Canada.

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Posted in: Bankruptcy,Dianas,dresses,faces,hammer,owner,Princess,under

Hertfordshire man charged with setting up firms during bankruptcy

A man from Ware in Hertfordshire has narrowly avoided a jail sentence after he was caught setting up firms during his bankruptcy period.

Matthew Gilewicz, 40, was accused of launching a series of business ventures even though he was an undischarged bankrupt. His actions are believed to have cost investors in these ventures more than £100,000.

St Albans Crown Court heard that the father of two, who was formerly a captain of Ware cricket team, was declared bankrupt in July 2006 after his company, Emargee Foods, went under. However, it was revealed that Gilewicz, in the disguise of a solvent businessman, went on to run another company called Golfbag Alarms that he had set up two years earlier.

Two investors placed £40,000 each in this venture, and one even paid out a further £24,000. Despite being removed as a director of Golfbag Alarms, Gilewicz managed to secure a £43,000 loan from Lloyds TSB in late 2006 in order to cover the start-up costs of a new company, Pro Defender Series Ltd. This company received an investment of £25,000 from a Hertford woman who had no idea that Gilewicz had gone bankrupt.

Hardly any of the investors’ money has been repaid, meaning that they and the bank will lose out on £100,000. However, as Gilewicz is now working in a £50,000 a year position, he has promised to pay the injured parties compensations. Despite this gesture, the former cricketer was given a six month prison sentence, which was suspended for 18 months. He must also complete 200 hours of unpaid community work.

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Posted in: Bankruptcy,charged,during,firms,Hertfordshire,setting

World’s richest divorcee Patricia Kluge files for bankruptcy

Patricia Kluge, who was once known as “the wealthiest divorcee in history,” has filed for personal bankruptcy according to the New York Post.

The newspaper reported that British-born Kluge, 62, has filed for bankruptcy despite receiving a reported divorce settlement of $1 billion when her marriage to media mogul John Kluge ended in 1990. Also included in the settlement was possession of a 45-room mansion in Virginia known as Albemarle House.

Despite the reported wealth of the former adult film star, Kluge’s extravagant socialite lifestyle and penchant for lavish celebrity-attended events has left her facing serious financial difficulties.

This situation was worsened by the fact that Kluge’s attempt at becoming a Virginia wine-maker, leading her to buy the Kluge Estate Winery & Vineyard, failed. It has been reported that Donald Trump bought the vineyard last April after it racked up millions of dollars in loan debt problems.

In total, Kluge and her husband William Moses are said to owe as much as $46 million to various creditors.

Earlier this year, Kluge sold her 300-acre estate and auctioned off its contents – including valuable antiques and heirloom-quality jewellery – as a debt management tactic, but to no avail. She recently filed for bankruptcy in a Virginia court, and a trustee has been appointed to sell Kluge’s remaining assets and start making payments to creditors.

Speaking to the Daily Telegraph about her financial troubles, Kluge said:

“It needn’t have come to this, and we had settlement talks on the table, but the banks decided this was the route to take. We’re focused on the future and moving forward.”

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Posted in: Bankruptcy,divorcee,files,Kluge,Patricia,richest,Worlds

Regaining your Life After Bankruptcy

Once your bankruptcy period ends, any debt that you owed your creditors will be legally fully addressed of records and so stopping your creditors from being able to collect further money from a legal point of view.

That will mean that assets which you acquire after your bankruptcy has been discharged will now belong to you. An added benefit will be that you will also be freed of the restrictions of bankruptcy, this may vary on a case to case basis provided you are not subject to a bankruptcy restrictions undertaking or a bankruptcy restrictions order.

Regaining your life after bankruptcy is different for each person. Many people feel an enormous relief as if a weight has been lifted whereas others keep worrying about the impact bankruptcy could have on their life later down the line.

For example, bank accounts after bankruptcy are available however you may need to research which banks will provide the service before applying. We normally recommend that you open a savings account first. Use of the savings account as well as appropriate use after a few months it will enable you to confidently approach the bank to ask for a current account.

Another likely challenge will be if you consider buying a house after bankruptcy, a good solution is to make a substantial deposit when getting a mortgage.

If you have plans to buy a house in the years following a filed bankruptcy then it will be important to focus on repairing your credit rating. A good way to repair your credit will be to use a credit card responsibly.

If you are still struggling with serious debts contact Debt Advice Group for confidential, specialist advice.

Once your bankruptcy period ends, any debt that you owed your creditors will be

legally fully addressed of records and so stopping your creditors from being able to

collect further money from a legal point of view.

That will mean that assets which you acquire after your bankruptcy has been discharged

will now belong to you. An added benefit will be that you will also be freed of the

restrictions of bankruptcy, this may vary on a case to case basis provided you are not

subject to a bankruptcy restrictions undertaking or a bankruptcy restrictions order.

Regaining your life after bankruptcy is different for each person. Many people feel an

enormous relief as if a weight has been lifted whereas others keep worrying about the

impact bankruptcy could have on their life later down the line.

For example, bank accounts after bankruptcy are available however you may need to

research which banks will provide the service before applying. We normally recommend

that you open a savings account first. Use of the savings account as well as

appropriate use after a few months it will enable you to confidently approach the bank

to ask for a current account.

Another likely challenge will be if you consider buying a house after bankruptcy, a

good solution is to make a substantial deposit when getting a mortgage.

If you have plans to buy a house in the years following a filed bankruptcy then it

will be important to focus on repairing your credit rating. A good way to repair your

credit will be to use a credit card responsibly.

If you are still struggling with serious debts contact Debt Advice Group for

confidential, specialist advice.

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Posted in: after,Bankruptcy,Regaining

What You Need To Know When Thinking About Bankruptcy

If you are in serious personal debt, bankruptcy can protect you from the creditors you owe money to whilst allowing you have a fresh start. However, it is important to acknowledge the seriousness of bankruptcy as well as the significant consequences that follow it before considering it as a solution as in many cases this should be the last resort.

When filing for bankruptcy a Trustee is appointed by the court to control any of the assets you have which the Trustee may consider being non-essential.  Consequently these assets are then sold off and the money raised is used to pay your creditors. You will be entitled to keep your reasonable household effects and a modest vehicle if you can prove the need. Some examples of non-essential assets which the Trustee may sell include expensive jewellery, expensive/secondary cars, shares and any other form of investment. Another item to consider is your home, if there is equity then it is highly likely that this will be realised. Unless you can raise money from, for example, family or friends it is likely to be sold.

Bankruptcy also imposes many restrictions including removal of credit facilities, freezing of bank accounts and for certain professions and extreme cases the risk of censure and/or lose your job.

On most credit applications, lenders will often ask you for details of any previous bankruptcies, therefore after your period of bankruptcy ends you will also find it difficult to get credit or potentially a mortgage. It is also important to bear this in mind when applying for future employment as it can hinder your chances of getting another job.
The average cost of going bankrupt is £600 although this greatly depends on your circumstances. Typically the deposit of £450 will go towards the costs of administering your bankruptcy. This cost is payable in all cases, however the court fee of £150 may be in certain cases relieved  by the court if you are on Income Support.
In case that you are a married couple and you are both applying for bankruptcy then the fees are separate and each of you will have to pay your respective fees.
Before going into the bankruptcy domain you should look into other alternatives or seek debt advice. There are wide array of solutions that can work just as effectively as filing for bankruptcy but without the excess luggage solutions like IVA’s a tailored Debt Management Plan, re-mortgage or consolidation loan are all plausible and reachable alternatives that should be explored before making a decision.

Take Debt Advice Group’s Debt Test to find out what is the best solution for you.

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Posted in: about,Bankruptcy,Thinking

Physiotherapy con-artist’s victims won’t be paid back due to bankruptcy

The victims of Hampshire con-woman Tina Roberts, who pretended to be a physiotherapist to extort £1 million from her clients, have learned that they won’t get their money back as she has gone bankrupt.

Roberts, 32, spent years pretending to be a physiotherapist, spinning a web of deceit in order to earn more than £1 million from clients and banking institutions. One of her wildest claims was that she was the physiotherapist for the England rugby team, a lie that she used to get clients to part with their money so that she could fund a lavish lifestyle for herself.

Following a court case last February, Roberts was found guilty of 14 charges of deception and fraud. She was sentenced to prison for seven years.

However, it has now come to light that Roberts has been through bankruptcy proceedings, meaning that all the people she deceived are not likely to get their money back. A judge at a recent confiscation hearing was informed that Roberts’ only assets were computer equipment, a nutritional analysis device and an iPhone – all adding up to just £5,000.

At the end of the hearing, Roberts was ordered to pay creditors with the proceeds from the sale of her limited assets. The decision was branded “a complete farce” by Peter Lelliot, one of the major victims of the scam. As well as claiming that the bankruptcy investigation had been poorly managed, Mr Lelliot is convinced that Roberts is hiding assets. He said:

“I am sure she has bought a number of items, including jewellery.”

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Posted in: Bankruptcy,conartists,Physiotherapy,victims

Former magistrate faces bankruptcy fighting rape allegations

A former magistrate from Blandford St Mary in Dorset reportedly has severe debt problems and is facing bankruptcy after he was accused of rape, prompting him to spend thousands in legal costs fighting the case.

Tony Hunt, 69, had served as a magistrate in Southampton magistrate’s court for years before his life was turned upside down by an allegation of rape. Hunt, who was at that time a senior traffic warden, claims he embarked upon a brief affair with a married woman, and that the same woman accused him of rape seven years later.

In 2003, Hunt was found guilty of the charge in Winchester Crown Court and was sentenced to four years in jail. He launched an appeal and presented new evidence, and as a result he was released from prison after two years.

Mr Hunt made an application to the Home Office for compensation for being wrongly imprisoned for two years, but his claim was rejected. Desperate for justice, he then launched a legal case against his former colleague for ‘malicious prosecution’, but this too failed.

The former magistrate and his family are now facing bankruptcy due to the astronomical costs of legal proceedings over the years. Mr Hunt lost his job after his conviction and has been unable to get another job, meaning his debt problems are only getting worse.

The family is said to owe at least £500,000 in costs to international law firm Hogan Lovells, which represented the woman in the case. Speaking to the Telegraph newspaper, Mr Hunt commented on this:

“I spent two years in prison as an innocent man and now they are seeking over £400,000 and trying to bankrupt me.”

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Posted in: allegations,Bankruptcy,faces,fighting,former,magistrate

IVA v Bankruptcy – Which is Better?

Anyone who finds themselves in dire financial straits will sometimes ponder which approach is in their best interests, an Individual Voluntary Arrangement or IVA or going with bankruptcy.  While each approach has certain advantages, the fact is that taking the IVA route is often the most prudent move.  Here are some of the reasons why.

A debt IVA is a formal arrangement that is established between the consumer and his or her creditors that allows for the settlement of outstanding debt, using a series of repayments that are within the means of the debtor.  The terms of the IVA may vary, with either full repayment of the total owed or certain creditors settling for a lesser amount.  Generally, the plan calls for repayment within sixty months or less.  If the debtor consistently makes the payments on time, the debt is considered settled in full and this is reflected on their credit report.

One key factor that sets the IVA apart from bankruptcy is this repayment of debt.  With some forms of bankruptcy, the court will completely wipe the debt clean, although it may require that some assets be sold in order to settle certain types of debt.  That is not the case with an Individual Voluntary Arrangement.  The debtor keeps all of his or her property with the debt IVA..

Along with the differences between the IVA and filing for bankruptcy, it is important to note that both are processes that must be approved by a court and are legally binding.  This means both approaches are different from a simple debt management plan, which is not governed by a court of law.  As such, both have the full protection and the enforcement of the courts, whereas the debt management plan does not.

Just as the bankruptcy advice notes that failure to comply with the directives of the court will open the door for creditors to pursue the debtor once more, the same is true with an Individual Voluntary Arrangement.  Both are legally binding arrangements that call for the full co-operation of the debtor in whatever capacity the court decides is prudent in a given situation. For this reason, debtors should weigh the pros and cons of each strategy with care, ultimately choosing the one that is right for their individual circumstances.

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Posted in: Bankruptcy,Better,Which