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Bankruptcy Terminology Archives - Page 9 of 9 - Bankruptcy UK



Bankruptcy Trustee

Bankruptcy Trustee

Quite apart from its common usage, e.g. under the Trustee Act 1925, this is a term used for a variety of insolvency appointments, including the licensed insolvency practitioner appointed in an English bankruptcy; a Scottish sequestration; a deed of arrangement; a Scottish trust deed and an administration order (of the affairs of a deceased debtor).

That is the technical definition. You will become aware of a bankruptcy trustee if you have entered bankruptcy. Or you have a failed IVA and a move has been made against you. when this happens it is usual for the IVA Supervisor  to seek the appointment as the bankruptcy Trustee.

The Bankruptcy Trustee will be intent on materialising assets that Were captured either at the time of bankruptcy or within the duration of the bankruptcy, or where an Income Payments Agreement or order is in place and you have had a material change in your financial circumstances.

We provide a specialist intermediary service where with your authority we act as the go between between you and your trustee. It is often the case that communications break down between the debtor and the supervisor. If assets are at stake for example the family home is being pursued by the bankruptcy trustee or supervisor then peoples defensive mechanisms engage and the fear of loss makes it very difficult to focus on positive solutions. This is particularly common place with families and couples who are quite simply petrified of the future with the loss of the home and the inevitable costs that will be lost in the process of securing these monies from the home on the creditors behalf.

Once we have received the authority to act form returned to us we will make contact with the Bankruptcy Trustee or Supervisor and set about a solution to mitigate loss and provide a balance between the parties. If necessary we issue complaints to The Insolvency Service Gateway against Insolvency Practitioners who have behaved in questionable ways.

If you would like to discuss a situation with a bankruptcy trustee or supervisor then call Sean Kiani 07479719319

Unsecured Creditor

Strictly speaking, any creditor who does not hold security over assets. More commonly used to refer to any ordinary creditor who has no preferential rights, although, in fact, preferential creditors will almost always be unsecured anyway. In any event, the last in the queue to collect – examples of unsecured debt might be credit cards, loans, overdrafts, catalogues, etc.

Winding-up petition

A petition presented to the Court seeking an order that a company be put into compulsory liquidation. Wrongful trading applies to companies in liquidation where a director allowed the company to continue trading in circumstances where he should have concluded that there was no reasonable prospect that the company would avoid going into insolvent liquidation. The directors involved may be made personally liable to make a contribution to the company’s asset.

Changes to your circumstances

If there are any changes to your circumstances during the period of your debt relief order, you must remember to inform the Official Receiver.  Changes include things such as:

  • information which you have given but realise is incorrect or has been missed out when you applied for the DRO
  • any increase to your income
  • any additional money or valuables acquired by you  – like, for example, money left to you in a will.

If you do not tell the Official Receiver about a change in circumstances, you could be committing an offence and it might lead to your debt relief order being taken away from you.  You would then have to make arrangements to pay all the creditors included on the order.

Qualifying debt

Not all debts can be included in a Bankruptcy or debt relief order. Only certain types of debts qualify such as:

  • credit cards, overdrafts and loans
  • rent, utilities, telephone and council tax
  • benefit overpayments and social fund loans
  • hire purchase or conditional sale agreements
  • buy now-pay later agreements.

(Once you are bankrupt or have a DRO you will not be able to pay for goods brought with a hire purchase or conditional sale agreement.  So unless someone else pays the instalments, you may have to return the goods.)

Although a bankruptcy or DRO can include many different kinds of debt, there are certain types which cannot be included such as:

  • court fines and confiscation order
  • child support and maintenance
  • student loans

Debt Relief Order

A debt relief order (DRO) is an order granted by the Insolvency Service in cases where you can’t afford to pay off debts.

With a debt relief order, none of the companies to which you owe money (your creditors) can take action against you to get their money back.  This lasts for as long as you have the DRO, which is usually about a year.

At the end of this time, all the debts included in your order are written off.

To apply for a debt relief order, you must have debts of less than £15,000 and a low income.  As you cannot apply for a DRO yourself, you will need to contact an authorised adviser who will apply for a DRO on your behalf.  First though, your adviser will check whether you meet the conditions. For example, you won’t be able to apply for a DRO if yoAu own things of value or have savings of over £300.

To proceed with an order will cost £90, but you can spread the cost of this over six months.

To find out more details about a debt relief order, please read on.  Please note that a debt relief order is a cheaper option than going bankrupt, but there may be more ways to deal with your debts and your authorised adviser can provide further information about these other options.



Bankruptcy UK

Bankruptcy UK