Members Advice on Bankruptcy

Yesterday I went to court, to begin the process of winding up
my personal and business affairs. It took me a long while
to realise that I had no choice but to opt for Bankruptcy and
it isn't necessarily the easy option.

My business collapsed this year, after poor trading for
several months. I made the mistake of propping up the
business for too long, as I didn't wish to put people out
of work and, more importantly, I trusted the wrong people.

However, having decided that was the only option open to
me I picked up the necessary forms from my local County
Court. The forms run to about 13 double sided pages,
to be completed in triplicate! I took one look at them and
promptly pannicked and pushed them into a drawer for
two weeks, before deciding to approach the CAB for help.
There are also another page, an affidavit, which you
are given two duplicates of, which you fill in but do not
sign until attending court.

In due course I met a very nice lady at the CAB, who
spent hours going through the forms with me and
filling in parts of them for me. She explained that
the CAB is only able to deal with a personal
bankruptcy and not a business one, for which
I would need to approach an insolvency firm or would
have to tackle the forms myself.

I took the forms home and filled in the rest of the information
that was needed and photocopied it all. Three weeks later
I went to the County Court, accompanied by the lady from
the CAB. We got there at 10 am, as the doors opened,
so we were fortunate to be seen quite quickly. First I had
to sign an affidavit (in triplicate) in front of a court official.
I paid a reduced fee of £310 as I am on benefits, although
the normal fee is in the region of £450.

After a short wait I was invited into the Court, where the
Clerk invited us to be seated. The Judge briefly read the
papers and asked me a couple of questions, before he
said that there was no real expectation of me being able to
pay the amount I owed and that, given that I understood
that my credit rating would be wiped out and that I would
have trouble obtaining credit, he would make me bankrupt.
It was a good job he couldn't hear my knees knocking!

He also said that if I co-operated with the Receiver I would
be discharged in a year or less and that he had no
objection to my having a Basic Bank Account, so that
my Direct Debits could be paid, as normal. This means
that you have no cheque book, overdraft or Debit card, but
I can manage with that quite well. If more goes into your
account than the Receiver thinks you can live on, that
surplus immediately goes to the Official Receiver, along
with any assets that you may have, which would be sold to
meet your debts. As I live in a rented property and am
on benefits this didn't apply to me.

If you own your own home, then the Receiver has an
interest in the property, but this does not always mean
that a sale will be forced. You are allowed to keep
essential furniture and household goods.

I then had to wait to speak to an Official from the
Receivers Office, who asked me some questions and
who then made a further appointment for me to be
interviewed by the Official Receiver, over the 'phone, two
weeks later. I was told to compile all the information I
could prior to that interview, such as credit card statements
and other bills.

I have to say, despite my trepidation, that everyone was
very pleasant and helpful. Ninety minutes later I was
walking back down the road, slightly stunned.

I do have to say its not an easy thing to do - or at least
I didn't think so. I hated having to admit defeat, but
the relief of knowing that the Receivers Office will deal
with things is enormous. I pass to them any letters
that I get from anyone wanting money and they sort
it all out, which is why it takes a while before you can
be discharged.

Given that my nerves were in a terrible state, and
that I couldn't sleep and worried endlessly, this was
the right choice for me, if choice is the correct word.
I hope you are never in the position of having to do
it yourself, but I also hope that reading my experience
of how the system works will be helpful to you.