Things to do Before Filing for Bankruptcy
If you have reached a place within your business that you have exhausted all of your options and are now in a position where you must file for bankruptcy it is important to understand what this entails. This is a step that is not to be taken lightly and without careful consideration of what will happen within this process. There are a number of steps you need to take beforehand to ensure that you don’t accidentally get yourself into a worse position because of loose ends. Here we will detail a few simple tips to consider before going down this financial path.
The first thing to be aware of is that there is an initial fee to file for bankruptcy which you can now pay online. In the past the application would have to be recorded on paper and submitted in court along with a fee of £705. As of last year this process has changed and can be completed online with a reduced fee of £655. This amount is made up of £130 for the application and £525 for a management fee. With this in mind you should ensure that you have these funds available before filing as you cannot proceed without. If you are in a position where you are struggling to raise this fee there are trusts online that you can apply to that may be willing to help depending on your circumstance.
Part of the bankruptcy process is closing down exisiting accounts that you have any outstanding debts with. It is therefore recommended that you open a new bank account before you file and do not do anything with it. If you use this account to put yourself further into debt during this period your filing may be denied as it will appear that you are trying to commit fraud.
Another one of the key requirements as part of this process is to complete two separate forms. There is a larger form which is the Statement of Affairs and a smaller form the Debtors Bankruptcy Petition. If as part of your filing you are required to go to court, it is important to take 3 copies of each form with you on the day.
In order to declare bankruptcy you will need to book an appointment to visit your local county court. You will have to search online to find which courts deal with bankruptcy in your area because not all will. The only exception to this is in London where most boroughs will use the High Court in central London for these filings. Before booking your appointment you should ensure that you have followed through on the previous steps to ensure that you aren’t pressed for time.
Once you have completed these steps and made sure that you have all of your affairs in order it will be time to attend your court hearing. Whilst this situation may be worrying and stressful you should rest assured that as long as you have brought everything necessary there shouldn’t be an issue. During this process the judge will be looking to ensure that bankruptcy is the best financial solution for you. If everything goes as planned the court should declare bankruptcy which will mean you are a step closer to working out your debt.