You can no longer be a director, shadow director or officer of a limited company.
If your business is insolvent, assets must be carefully sold off for their true and accurate value to pay back debt.
You must declare your bankruptcy to anyone lending you more than £500.
All of your bank accounts will be frozen when you go bankrupt. For them to be released you must apply to your Trustee (usually an insolvency practitioner).
You can still open new bank accounts – but the majority of banks close down any accounts of bankrupt customers, so it can be difficult.
What happens if I go bankrupt?
All your company’s assets will go to the company Trustee, who will sell them to recoup money owed.
After one year most bankruptcies are discharged – meaning any restrictions placed on you by the law are lifted and you are released from your debts.
However, if your bankruptcy occurred through unlawful means, such as fraud, it may not be discharged for over a year and your debts may still hold.
You can prepare for bankruptcy by attaining a bankruptcy pack from the Court.
You will need to attend Court in order to swear you have accurately and truthfully completed the document.
The cost of this is £150 with a £335 admin fee, though if you have low income / are on benefits the £150 court charge may be waived.
You will then meet an Official Receiver who will assess your situation and determine whether you can make any contribution to your creditors.
If you are required to make a contribution, it will last for the next three years.
If you know you are going to go bankrupt, rather than allowing someone to force you into this it is best to declare you are bankrupt.
This gives you a little more control and is the most responsible option.
During bankruptcy, any purchases made must be essential and no further debts should ever be taken on.
If your trustee does try to claim this back, it is important a settlement is reached as soon as possible.
Hudson Weir are an established firm of Insolvency Practitioners who specialise in business recovery and corporate financial solutions. Hudson Weir provides industry leading, nationwide services for its clients with the intention of easing financial pressures and providing recovery strategies for struggling businesses.More about us