After a bankruptcy petition has been issued, the application will be advertised in the press.
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Those who have financial dealings with the debtor, such as banks, creditors or landlords, etc, are informed of the situation.
An official receiver investigates the debtor’s affairs and a trustee is appointed.
The bankrupt’s estate is then transferred to this trustee, who will ‘realise’ it (ie, sell it off) to distribute the funds to the creditors.
So unless the bankrupt can buy back their assets with the help of third party funds, they will lose them.
The term of a bankruptcy is usually one to three years and any asset acquired during this time, such as inheritance, fund maturity, pension, property equity or insurance payout, can be seized by the trustee.
During the term of the bankruptcy the debtor is prohibited from managing, promoting or starting a business and acting as a director. The bankrupt cannot borrow more than £250 without disclosing their bankruptcy status.
