What Happens After You Are Discharged from Bankruptcy?
If your debts are mounting and creditors are chasing you for payment, you might consider declaring bankruptcy.
Bankruptcy is an effective way for individuals to have a fresh financial start. However, it’s important to understand the procedure and the bankruptcy discharge process before you apply.
In this article, the expert team at Irwin Insolvency explains the bankruptcy discharge process and what you can expect to happen after your bankruptcy period ends.
What Is a Bankruptcy Discharge?
When a person declares bankruptcy and is approved by the Insolvency Service, they are deemed to be an undischarged bankrupt.
During this period, they will be subject to the terms of their bankruptcy order. As an undischarged bankrupt, you are subject to income payment orders, your finances will be controlled by an official receiver and your assets may be sold to pay your debts.
The term bankruptcy discharge refers to the end of this bankruptcy order. You are discharged from the bankruptcy and are no longer deemed to be an undischarged bankrupt.
When Will I Be Discharged?
Ordinarily, individuals will spend 12 months as an undischarged bankrupt. After this 12-month period has ended, they should be discharged.
The can be extended (although this is rare). You will be informed of the length of your bankruptcy period by an official receiver appointed to oversee your case.
How Do I Get Discharged?
A bankruptcy discharge will happen automatically. You will be released from the terms of your bankruptcy after 12 months unless otherwise informed by your official receiver.
You can search the Insolvency Register to double-check the status of your discharge. You are not sent proof of your discharge, however you can ask the Insolvency Service for this. This is recommended, as you may need to prove you have been discharged in the future.
What Happens Once I’ve Been Discharged from Bankruptcy?
Once you’ve been discharged from bankruptcy, you are no longer subject to the restrictions of your bankruptcy order.
This means that control of your personal finances will be returned to you, you will be able to apply for larger sums of credit, and you can start a company or act as a director should you wish.
If you still owe money to creditors, this may be wiped out after the 12-month period ends.
What Will Still Be Affected After Discharge?
However, it’s important to note that despite being discharged from bankruptcy, you will still be affected by certain restrictions and conditions that last longer than 12 months.
You may still have to pay a percentage of your income each month, while assets that you owned before the bankruptcy (such as a house or car) can still be sold to pay your debts.
For up to six years, bankruptcy will remain on your credit score. If a potential creditor ever asks if you have declared bankruptcy, you must tell the truth. This can affect your ability to secure credit or mortgages in the future.
Contact Irwin Insolvency Today for More Information on the Bankruptcy Discharge Process
If you need assistance declaring bankruptcy, the team at Irwin Insolvency is here to help.
Our expert insolvency practitioners have the skills and experience to ensure you understand if bankruptcy is right for you, and what the bankruptcy discharge process is.
Contact Irwin Insolvency today for your free consultation.