Once the petition (from whichever source) is received by the court a hearing date will be set by, the Court officials. This can be anywhere from one day to two weeks dependent upon available Court time.

At the hearing the court will consider the statement of affairs and the documents produced by you or the creditors and grant a bankruptcy order.

Typically the Official Receiver is appointed as trustee in bankruptcy. But if there are significant assets an insolvency practitioner (IP) may be appointed trustee in bankruptcy at the by the Official Receiver or by the court directly.

The Official Receiver, once trustee, will interview the debtor to check through his/her documents and to establish his or her income and financial position. In the event that there are significant assets, as described above, an official receiver may appoint a local insolvency practitioner as a trustee in bankruptcy. The IP will seek to recover those assets over a period of time on behalf of the creditors.

All assets belonging to the debtor and like him are included in the estate. Some of those assets however may, of course, be charged to or have partial ownership by another individual or individuals.

Where exclusive ownership cannot be established, you will have guessed or estimated the amount of the asset that you believe to belong to you, in your statement of affairs.

Typically items such as motor vehicles (under hire-purchase agreements), mortgage property such as matrimonial homes and assets under a partnership agreement may only be partially available to the trustee on behalf of the creditors.

Nowadays, the undischarged bankrupt is allowed to maintain tools of the trade. This may include a modest motor vehicle and will definitely include hand tools etc. Large tools such as lathes and machinery will usually not fall into this description unless they have little re-sale value. And, where furniture and other items belonging to the bankrupt are under disputed ownership, it is unlikely that the trustee will seek to recover them. For example a TV bought jointly by husband and wife.

Bankruptcy does not however dismiss all debts. Items such as CSA (Child Support Agency) payments, maintenance to spouse, government fines, mortgages or items under hire-purchase arrangements are excluded.

The Government has also moved to close a loophole that allowed Student Loans to be written off in bankruptcy.

Typically in bankruptcy 50 per cent of the unencumbered equity in any matrimonial home is available to the trustee in bankruptcy for the creditors. But the equity in many houses is modest and the cost of pursuing this equity often outweighs the benefit of collection.

It may be possible to maintain, with the permission of the trustee, the matrimonial home. This, of course, is largely dependent on whether the mortgage company is prepared to continue to receive mortgage payments and whether you are able to meet those payments.

For example your spouse may have sufficient income to meet the mortgage payments and if there is not a significant chunk of equity available to your estate, as described above, it may be advantageous to maintain the property through the bankruptcy period.

This is a very complex area but one that all people planning bankruptcy should read. Where the bankrupt has equity in his/her matrimonial home (and another person is entitled to 50% of the equity), the Trustee can register a Caution at the Land Registry. This prevents the home from being sold without the Trustees permission.

Where the bankrupt has gained new equity this equity can be available to the Trustee for the creditors even YEARS AFTER THE BANKRUPT IS DISCHARGED. This can be very distressing and is an area that most insolvency professionals, bankrupts and dischargees would like to see tackled.

In the new regime for bankruptcy we understand that the Trustee of a bankrupt will still be able to register a caution, once he/she has discharged the bankrupt he/she will only have 12 months to use it or lose it. At the time of publishing this we do not know whether this has been finalised or not. But clearly this is an area that should concern all home owners facing bankruptcy

It is not possible for an undischarged bankrupt to be a Justice of the Peace or a Member of Parliament. Other professional qualifications can also be at risk if you enter bankruptcy such as being a solicitor, a chartered accountant, certified accountant or registered Auditor. Nor may you be member of a local authority. If in doubt you should take advice from your professional organisation whether bankruptcy will affect your ability to continue under your professional qualifications.

Should you obtain a new job with a higher salary than previously, or a higher disposable income than indicated to the court and the trustee, it is possible for the trustee to seek to recover some of this excess remuneration through an IPO (income payments order).

For example if you stated that your net disposable income was 200 per month and subsequently obtained a position that gave you £1,200 per month disposable income, then it is likely that the trustee will seek to recover a large percentage of this difference.

If you fail to agree he can apply to the court for this order to be ratified by a judge. To fail to maintain such a payment may be an offence. A trustee may seek to recover these amounts directly. If you fail to comply he/she may seek to sell property or other assets that he holds on the creditors behalf. Of course there has also a risk of incurring the wrath of the court and a prison sentence is possible.

Once made bankrupt you may not be, without the permission of the court, a director of a limited company in the United Kingdom. To do so is a criminal offence. You may not act as a manager of a limited company in the United Kingdom or in act in the formation of a company in the United Kingdom during the course of your bankruptcy.

During bankruptcy you may not obtain credit of greater than 250 it without disclosing that you are an undischarged bankrupt. To do so as a criminal offence.

You he may not be a partner in a partnership.

Whilst you may continue to trade as a sole trader or a severe restrictions placed upon the bankrupt. For example you must not trade under a new name or different name to that which you traded under prior to being made bankrupt. If you trade in a different name this is a criminal offence.

Once the bankruptcy term is complete and
ou have conformed to the wishes of the trustee in bankruptcy; you are discharged from bankruptcy.

Although this means that most debts are written off some are not such as government fines, child-support etc as discussed previously. However debts to the Inland Revenue, VAT and other trade creditors in the period up to your bankruptcy are written off.

It may be possible to start rebuilding your credit rating and to obtain a position of director or partner in a partnership for example. After say 12 months your personal emotional state, health and enthusiasm may have returned to normal. So it may be a new start.

Once again we would reiterate that the above can only be a general guide to bankruptcy. There are many rules and regulations under the Insolvency Act appertaining bankruptcy and with a huge variety of causes of bankruptcy and different structures of bankrupt estates, it is impossible to answer all questions in a computer-aided guide.

If you have any doubts as to the current situation you face please revisit the how to use this site page and followed the instructions there.