Bankruptcy offers a way for individuals to resolve overwhelming debt when other options, such as an Individual Voluntary Arrangement (IVA), are not suitable.
How Bankruptcy Works
Filing a Bankruptcy Petition Individual or creditor submits a petition to the court.
Court Order The court reviews the case and, if the criteria are met, issues a bankruptcy order.
Appointment of a Trustee A Trustee in bankruptcy is assigned to manage the individual's estate and ensure creditors receive appropriate distributions if available.
Asset RealisationAll assets vest in the bankruptcy estate. The trustee has an obligation to realise these assets.
Discharge After typically 12 months, the individual is released from bankruptcy, allowing a fresh financial start.
Benefits of Bankruptcy
Debt Relief Provides a legal solution to clear unmanageable debts.
Creditor Protection Stops creditor harassment and legal action.
Structured Process A clear and regulated process overseen by a court and a Trustee.
Fresh Start After discharge, the individual can begin rebuilding their financial situation.
Why choose Bankruptcy?
Bankruptcy may be the only option for individuals who:
- You have unmanageable debts with no feasible repayment plan.
- Creditors are actively pursuing legal action against you.
Impact of Bankruptcy
- Valuable assets, such as property or luxury items, may be sold to repay creditors.
- Current legislation allows bankrupt individuals to maintain a reasonable standard of living during the process.
- Upon successful completion of bankruptcy, most debts are cleared.
- Bankruptcy remains on an individual’s credit report, potentially affecting the ability to obtain credit.