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Bankruptcy Most creditors can’t pursue you for your debts once you have been made bankrupt.The Official Receiver, a government agency responsible for controlling people’s affairs during bankruptcy, will investigate the reasons for bankruptcy.Your bankruptcy will normally be discharged (ended) within a year.However, if you have £100 or more a month disposable income (income left over after you have paid essential living expenses), the Official Receiver may ask you to make regular payments at a level you can afford for up to three years. If you refuse to pay because you believe this level is more than you can afford, the Official Receiver may apply to the court,which will decide what you should pay. Bankruptcy is not an easy option, and
you should get expert advice before
applying to make yourself bankrupt.
It is normally the right option when
you have large debts that will take
many years to repay. It may not be
suitable if you:
_ have a certain type of job (for
example, if you work in finance or
you are a solicitor);
_ own (or are buying) your own home;
_ have other assets; or
_ are likely to inherit money or goods
during the bankruptcy period.
And there are some types of debt you
will still have to pay after bankruptcy:
_ magistrates’ fines;
_ maintenance for a partner or
children;
_ debts from fraud;
_ student loans;
_ compensation you owe to another
person.
Finally, you must make a lump-sum
payment, including:
_ £325 for the Official Receiver; and
_ £150 court fees.
You can apply to have the court fee
waived if you are receiving certain
benefits or can’t afford to pay it.
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