Life after bankruptcy
What happens when you are finally discharged? TheSite.org talks you through it.
When can I be free from bankruptcy?
You are usually discharged from bankruptcy after twelve months, however if your bankruptcy order mentions a certificate of summary administration it could be two years.
If the court annuls the bankruptcy order because all debts have been paid or there was a mistake in making the order you will be freed from the order immediately.
If you have not carried out your duties under the bankruptcy proceedings, the Official Receiver may apply to the court for your discharge to be postponed.
You will not get an automatic discharge from bankruptcy if you have been an undischarged bankrupt at any time during the 15 years before the current bankruptcy. If this applies to you and you wish to obtain your discharge, you must ask the court five or more years after the date of your current bankruptcy order. Even then, the court may refuse or delay your discharge.
What about any other debts I might have?
Discharge releases you from most of the debts you owed at the date of the bankruptcy order, exceptions include:
- fines
- debts arising from fraud and certain other crimes
- any claims which cannot be made in the bankruptcy itself
You will only be released from a liability to pay damages for personal injuries to any person if the court thinks fit.
When you are discharged you can borrow money or carry on business. You can act as a company director unless you are disqualified from doing so as a result of a separate order arising out of your involvement with a company.
Assets you owned before your discharge
When you are discharged there may still be assets that you owned during bankruptcy that the trustee has not yet dealt with e.g. your home, a pension, or an interest in a will or trust fund. 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.
You must tell the Official Receiver about assets you obtain after the trustee has finished dealing with your case but before you are discharged as they could be claimed to pay your creditors.
With some assets - such as your home and some types of assurance policy - your spouse, a partner, a relative or friend may want to buy your interest. He or she should get in touch with the trustee straightaway to find out how much they would have to pay.
Assets you obtain after your discharge
Usually you may keep all assets you acquire after your discharge.
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