Bankruptcy Law in UK

UK bankruptcy law was created with the sole purpose of helping people who are in severe financial debt. It was meant to let them get out of debt without it being considered their fault. The law was framed so that people can get a way to pay their debts by selling their assets and possessions. This can help them relieve from stress of financial hardship within an established timeframe

The Enterprise Act
The Bankruptcy proceddengs are governed primarily by the Enterprise Act of 2002 but further amendments were made to it in 2002 and 2004. The year 2004 marks the most important changes to this act. The UK bankruptcy law changes had a great impact on small businesses and individuals alike. The main reason for this is that the changes have had significant impact on the law surrounding bankruptcy, and this made it easier for people in serious debt to find a solution. The downside of this was that encreasingly larger numbers of people are now filing for bankruptcy than ever before.

One of the most significant changes the law surrounding bankruptcy has suffered was related to selling the home of a declared bankrupt. Before the changes in 2004, the court appointed Trustee did not have any time limits on when they could sell the debtor's home to pay his debts. If they had to wait five or six years before they would do that, there was nothing you could do. After the amendaments in 2004, however, they have a strict time limit of three years in which to be able to sell the debtor's house. Once this time limit has been passed, the house rebecomes the property of the bankrupt person and cannot be put up for sale again -unless you go bankrupt for a second time.
For the ones going bankrupt another important change that can make it the number one choice for people in debt is the duration of the process. Until the reform of the Enterprise act, discharge from bankruptcy normally normally came only after three years. Now that time limit has been significantly reduced to only one year. To many people searching for a solution to financial hardship it will mean that bankruptcy is a more attractive solution than the much promoted IVA (Individual Voluntary Agreement) which normally lasts for sixty months. Although creditors still prefer to chase their debtor for months with threatening notifications and phone calls since through this tedious process they get more of their money back than they would do if they chose to register a bankrupt. Through the bankruptcy process, it will mean you only get to pay back a small part of your original debt and what will remain of it will be wiped clean. Thus this sits at the core of the reason why many creditors never try to apply to the court to declare you bankrupt despite the fact you are no longer able to pay them the regular payments. As such, bankruptcy law more likely protects the debtor that the creditors.

As shown before, the new amendaments brought to the Enterprise Act made it more beneficial for debtors to file for bank there, and there are also the existing requirements that have to be adhered to, like closing all your bank accounts, turning in all your credit cards and all leased goods to the court appointed Trustee. The debtor will also be placed under some severe restrictions, including anything regarding starting a business. Also, your family, creditors and even landlord are informed as to your situation, and be aware that you will have your financial details published in the press. At least one small upside to this state from a psychological point of view is that, since there are increasing numbers of people chosing bankruptcy as the solution for their financial problems, the stigmata that once surrounded this financial predicament seems to be slowly fading.

Legal Advice and Solicitors
Considering that the entire legislative field is very complex, it's best advisable to make sure you find the best possible outcome for your financial situation from declaring bankruptcy, thus it will be best to contact a financial legal advisor or a solicitor. The first consultation usually does not cost you anything and due to your financial situation you should be covered for consultance by Legal Aid. Another strong reason for seeking legal advice when considering bankruptcy as an option is the place where you live. Different parts of the UK apply different laws, even if the main corpus is the same, the subtleties might differ. Only a legal advisor will be able to provide you with the best counseling you will need in your situation.

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