New figure from the Insolvency Service indicate record levels of insolvency for 2009.
When you are officially declared bankrupt by the courts and you have no real assets, you are appointed an Official Receiver or 'OR' to take charge and ensure that everything ordered is carried out. When the bankrupt person has significant assets, then they are appointed a Trustee. Your trustee will either be a qualified accountant specialising in personal bankruptcy or an Insolvency Practitioner. A trustee is the person responsible for taking possession of your assets, selling them and distributing the proceeds to your creditors equally.
Who appoints a Trustee?
A trustee is normally appointed by the Official Receiver when there are significant assets or the realisation of assets is likely to be complex. In some circumstances the Official Receiver may become the trustee.
What is the role of the Trustee?
The trustee acts for the creditor (the people or company to whom money is owed) - not the debtor (the person in debt). Their objective is to recover as much of the money owed to the secured creditors. Initially your trustee will interview you and request all necessary information to help them decide how much you owe and to whom - and how you can pay them back. Their fees will also be added to your debt, which will increase the amount you owe. You are required to provide details of all finances including wage slips, tax returns, bank details and statements and general proof of your monthly/annual outgoings.
The trustee arranges a meeting with the creditors. This meeting involves everyone who is owed money, the trustee and the bankrupt (debtor). The trustee presents his findings based on the information provided by the debtor and a payment plan - if any - is offered to the creditors. They may agree or disagree to the terms. If the trustee is an Insolvency Practitioner the creditors have the right to elect a professional to oversee the procedure, ensuring that things are carried out in their best interests.
Whilst a trustee oversees a bankruptcy, they are required to keep accurate records of all incomings and outgoings for the duration. These accounts are kept for a period of one year and continue until the bankruptcy reaches conclusion. These accounts are verified by certified accountants and/or the person overseeing the bankruptcy on behalf of the creditors. Copies of all accounts are sent to all parties including the bankrupt. The records will include details of the trustee's fees which may be high.
What if I refuse the requests of the Trustee?
It is vital to comply IN FULL with the trustee. Failure to do so can have serious consequences, such as restrictions being placed on you or even facing prosecution by the courts. Your bankruptcy term could be significantly longer - anywhere from 3-5 years or more. You may also face a severe fine - which you will have to pay in full, as all fines are exempt from bankruptcy rulings - before meeting all original requirements of the bankruptcy order.
For more information on filing for bankruptcy or alternative debt solutions, please click on the relevant links below.
Will bankruptcy remove ALL of my debts?
Being discharged from bankruptcy
Trust Deeds (Scottish Residents Only)
Alternatively, to discuss bankruptcy or any other debt solutions, please call 1Stop Money on 0800 012 4039 or fill in the online form and a 1Stop Money broker will contact you as soon as possible.
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