Bankruptcy Period

Life is a rollercoaster ride; the positive sides of which are often compensated by the negative phases. At times, it is our own mistake that shows up, and at some other time, it is merely luck that might lead to such predicament. While emotional breakdowns doesn’t affect anyone else around except the dear ones of an individual, but financial difficulties often put pressure on one’s debtors and other stake owners of the company. Hence, declaring bankruptcy, it may be voluntary or involuntary can be a good move.  

Bankruptcy is a method of taking care of debts that one does have enough money to repay for. Under this legal method, the court accepts the fact that the aggrieved party isn’t in a position to repay its debts and therefore appoints someone to take care of their existing financial dealings. Bankruptcy will give the party a new beginning and a freedom from overwhelming debts and also make sure that all assets that will be possessed by the bankrupted individual or company are fairly shared among the creditors.

Once a bankruptcy has been declared, the bankruptcy period extends for a maximum of 12 months. This period can even be reduced in case the Official Receiver closes with its enquiries into the affairs of the bankrupt party and this period could even be increased if the bankrupt party doesn’t co-operate with the enquiries. Conversely, if the Official Receiver deems that the debtor has been negligent or irresponsible in handling their monies, a Bankruptcy Restriction Order (BRO) can be issued. This can last for up to 15 years, putting bankruptcy restrictions in place for the length of the BRO, even after the actual period of bankruptcy has expired.

If the bankrupt has sufficient disposable income, the Official Receiver can put an  Income Payment Arrangement in place for as long as 3 years and the bankrupt is required to make payments of these installments even when the bankruptcy period is over. Generally, the discharge from this bankruptcy period is done automatically and no formalities are required to be fulfilled. However, a ‘certificate of discharge’ can be taken if one wishes to obtain it. One can write to the court in order to obtain this certificate, by providing one’s address, court number and name to the court where bankruptcy has been filed earlier. Also, there is a certain amount that has to be paid to the court to take this certificate and the certificate will then be issued to the party within four weeks.

There are various pros and cons of going in for a bankruptcy along with several legal formalities that are involved. You should seek professional advice before petitioning for your bankruptcy as it may not be the best solution to your problems.