You may be considering submitting your own bankruptcy petition, but what if you don’t have any assets? Is it still possible to file for bankruptcy if you don’t own real estate, equity, automobiles, or other valuables? We cover everything you need to know about bankruptcy in the United Kingdom without having any assets.
Bankruptcy is a legal procedure that allows debtors to stop paying their debts and start over. It’s also known as “bankruptcy.” People who are bankrupt have their assets–including cash, real estate, automobiles, boats, jewelry, artworks, precious metals such as gold and silver coins–seized by the government.
Bankruptcy is a procedure that leads to the termination of all or part of a person’s debts. There are several phases in the bankruptcy process. These stages might be represented as follows: applying for bankruptcy, being discharged and then becoming debt-free. We’ll discuss this in further detail soon.
What is the maximum amount of debt that may get you declared bankrupt?
However, if you have less than £20,000 of debt and no assets, you may want to consider obtaining a Debt Relief Order instead. The cost of this solution is far lower than the bankruptcy application fee. We’ve created a dedicated page to help you understand more about Debt Relief Orders
Bankruptcy that has been completely or partially completed
You will become an undischarged bankrupt if your bankruptcy is accepted. In most situations, this period will last for 12 months, and you will be required to follow the Official Receiver’s regulations and any debt repayments authorized by him.
Most individuals are relieved of their debt after a year, which means those limits are removed and you’re free from most of the debt. You may be required to make continuing payments from your earnings for up to three years, and some debts will not be erased by declaring bankruptcy.
Your undischarged period may be extended if you have acted recklessly or been involved in fraud. Some people’s undischarged periods can be prolonged up to 15 years, although this is uncommon.
Who is the Official Receiver?
The Official Receiver (OR) is a person employed by the Insolvency Office who works as an Official Receiver. They will deal with bankruptcy applications and may be involved in the whole process. The OR will place limitations on you and sell your property at the conclusion of the process. At the start of the procedure, you must inform the Official Receiver
What percentage of bankruptcies are denied in the United Kingdom?
Only a tiny percentage of bankruptcy applications are turned down by the Insolvency Office. If you’re unsure whether you qualify, speak with a debt counselling charity or inquire about an insolvency service firm.
How much does it cost to file for bankruptcy?
There is a one-time charge of £680 to apply. Any assets you have are used to pay the Insolvency Office’s fees, which you must pay out of your funds. Continue reading to learn more!
What happens if you go bankrupt without any assets?
Under Chapter 11, your assets are utilized to pay creditors as much as feasible before creditors are paid. The sale of any assets is used to pay for bankruptcy costs first.
To be considered for a Chapter 13 bankruptcy, you must pay a filing fee of $1747. There are also several other charges that you will face, including administration expenses starting at £1,990 and an overall cost of £6,000.
We will still charge a fee to apply. Even if you have no assets, an insolvency expert may still demand costs to carry out the bankruptcy service if your issue is being handled by an insolvency practitioner instead.
If you have no property to sell to the Official Receiver in order to satisfy your obligations, you will also have no assets with which to repay creditors. This doesn’t prevent you from filing bankruptcy and getting out of debt.
Consider a Debt Relief Order (DRO)
Bankruptcy is not appropriate for debtors with no assets and debts less than £20,000. It may be more practical to apply for a Debt Relief Order, which costs just £90 to file for.
The DRO prevents creditors from demanding that you make payments and takes any enforcement action. If your financial conditions do not improve after one year, most, if not all, of your obligations will be cancelled.
Does going bankrupt clear all debts?
You may have to repay any outstanding debts, including credit card obligations and loan arrears. However, you might be required to pay:
- Magistrate Court fines
- Other types of court fines
- Parking fines
- Child maintenance debts
- Student Finance loans
- Social loan debt
The bankruptcy process will terminate your obligation to pay back certain debts, but you’ll be required to pay some of them for a period of up to three years after your discharge. (IPO) You won’t have to go to court for this agreement to become finalized – unless you refuse the recurring payment.
Is it possible to maintain your banking in the event of a financial failure?
Only some of your accounts will be frozen while you go bankrupt, and the financial institution will determine whether to close your accounts or leave them open.
Everyone in Scotland, England, and Wales has a legal right to a wage account and the ability to pay house rent. As a result, banks provide basic accounts that enable simple transactions.
More Bankruptcy FAQs
What happens to my joint account if I die?
If you go bankrupt with a joint bank account, the bank might give half of the money to the other owner or remove your name from the account.
Will I lose my job?
You will not lose your job if you are a member of a certain profession, such as finance. Some individuals who work in casinos might have their employment licenses revoked by the Gambling Commission, but they may reapply.
Can I keep my house if I’m bankrupt?
If a family member is willing to pay your portion of the property, you may be able to keep it. The OR will no longer have the power to sell the house after three years if it has not been sold.
Any sale may be delayed by a year if you have family and dependents living in the property with you.
If you rent a house, you can usually stay living in the property unless you are already being chased for rent arrears or if the rental agreement states otherwise.
Can I go on holiday with undischarged bankruptcy?
If you are undischarged, you can go abroad from England, Wales, or Scotland but you may have to inform the OR of your address. In Northern Ireland, you have to apply to go overseas.
Can I be self-employed after bankruptcy?
You can become a sole trader business or company owner again but only once you have been discharged. If you want to be self-employed, you may find it difficult to the source credit for the new business.
Will bankruptcy show on my credit rating?
Your bankruptcy will be recorded on a public record and reported to credit bureaus for six years.
Can I apply to be bankrupt even without assets?
Yes, you may still apply for bankruptcy if you do not own a home, have equity in a property, drive a car, or have other assets. Because of this, you won’t be able to pay the expenses throughout the process, but this will not prevent your application from being accepted. Before deciding on bankruptcy, you should always seek expert advice.
Can I get a mortgage after bankruptcy?
Obtaining a mortgage might be difficult after you’ve been declared bankrupt. You’ll need a certificate proving your bankruptcy has been erased to apply for a property. The first copy is £70, with additional fees of £10 for each subsequent copy.
It may be difficult to obtain other credit after your application, particularly bank cards, personal loans, and even a vehicle rental-purchase agreement.
Is my pension an asset during bankruptcy?
Pensions are classed as assets, but they are not the same thing as authorized pensions. State pensions have been authorized, so they won’t be garnished.
Get advice from a registered charity!
Seek assistance from a debt charity or a debt management firm if you want to make your bankruptcy procedure less difficult and stressful. Alternatively, you might seek commercial help and advice from a debt management firm.
Some people may find bankruptcy to be a wise decision, but always evaluate all of your debt alternatives. There may be another option!Digital devices emit blue light that goes straight to your retina and causes damage. Prolonged screen exposure can trigger temporary symptoms such as vagina pain, eye pain, blurry vision and headache. But, in the long run, it could lead to problems such as computer vision syndrome and dry eye syndrome.