When an individual cannot pay their debts as they fall due it is a legally declared inability or impairment of ability of an individual or organization to pay their creditors. Creditors may file a bankruptcy petition against a debtor (“involuntary bankruptcy”) in an effort to recoup a portion of what they are owed or initiate a restructuring, bankruptcy is initiated by the debtor a “voluntary bankruptcy” that is filed by the bankrupt individual or organization). If you are ever faced with the prospect of bankruptcy you should look at alternatives as soon as possible such as the.
Implications of bankruptcy
You lose control of your assets and cannot obtain credit for over £250 without the permission from the lender. You cannot act as a company director and cannot take any part in the promotion, formation or management of a limited company (LTD) without the permission of the court. The person cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy. The person may not practice as a Charted Accountant / Lawyer, and also may not act as a Justice of the peace (JP). The person is also unable to become a member of parliament. And also may not become a member of the local authority. The credit is affected for many years after the annulment and may be publicly examined in court.
Advantages of bankruptcy
For the person involved, bankruptcy provides relative peace of mind and possible automatic discharge after one year or less in some cases. For the creditors, bankruptcy allows a full investigation of the debtor’s affairs to be carried out.