Bankruptcy is designed to help the debtor make regular affordable payments to creditors to the extent where the debtor can afford. Bankruptcy orders are issued in a county court, potentially any person owing more than £750 can be made bankrupt. Any assets held by the debtor can be sold to pay court costs and settle your outstandig debts.
The official Receiver will interview you and look at your current financial situation. Here they will make a decision whether you can afford to make the repayments to creditors. Payments can last as long as 3 years, however in most cases bankruptcy last 12 months prior to being discahrged and receiving a 'discharged from bankruptcy' certificate. If made bankrupt you will need to make the agreed payments, if you dont then you will be forced to do so through a court order known as an Attachment of Earnings Order.
Assets can be sold in a bankruptcy case. These assets can include houses, cars, and luxury goods. There are goods which can be kept such as tools for a trade and household contents not deemed luxury items.
Becoming bankrupt can also have implications on your employment. You can still work when bankrupt, but there are certain occupations and employment roles which are barred during bankruptcy. An example of barred employment due to bankruptcy is you cannot be a director of a limited company.
Once you have been discharged, your name will be entered onto a register at the Insolvency Service. It is kept on this register for 6 years after which time you can request your name to be removed.