Filing for bankruptcy is no longer a punitive act, although it remains a difficult decision. This means you will not be left with only a change of clothes and your identity will not be published in local newspapers. In addition, the bankruptcy period has been reduced from three years to twelve months.
Your local court issues the bankruptcy order, but the proceeding is conducted behind closed doors. You will not see the judge unless he or she requests to see you, but you will be alone with the bankruptcy clerk.
The documents are then presented to a judge who issues a bankruptcy order. After that, your case is transferred to the Official Receiver, who handles the bankruptcy-related details. The bankruptcy process in England and Wales is relatively straightforward, but it has several long-term repercussions, so it should only be used as a last resort. But if you have substantial debts, filing for bankruptcy will allow you to start over, although you will likely lose your residence.
If you reside in Scotland, you will not file for bankruptcy, but rather sequestration. To be declared sequestered, you must demonstrate that you are bankrupt and owe more than £1,500. Similarly to those in England and Wales, you must file a petition for bankruptcy with the court, but your estate will be administered by the Accountant in Bankruptcy. In 2008, the new sequestration law shortened the bankruptcy process from three to one year, bringing it in line with the law in England and Wales. However, if the debtor violates the """"laws,"""" the court can extend the bankruptcy period. If you have no property, savings, or other assets, you may petition for Low Income, Low Assets Bankruptcy (LILA), in which you do not go to court but to the Accountant in Bankruptcy.
Similar to England and Wales, you can declare insolvency in Northern Ireland if you owe more than £750. As in the rest of the United Kingdom, the bankruptcy period lasts twelve months, and your assets will be administered by a court-appointed Trustee. However, the consequence of bankruptcy in Northern Ireland is virtually the same as in the rest of the United Kingdom: the Trustee will sell your property and take your savings and valuables to pay off your creditors.
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