What is UK bankruptcy law?
Under UK bankruptcy law, creditors write off your unsecured debts, allowing you to make a fresh start. But during the 12 month term of the bankruptcy you will be subject to certain restrictions.
If your bankruptcy is approved your bankruptcy creditors are legally bound to stop charging interest, and in most cases they’ll be prohibited from contacting you or taking legal action to recover the debt.
An official receiver will investigate your financial situation and payments towards your debts over the past few years. In Scotland, this is done by the Accountant in Bankruptcy.
What is a bankruptcy offence?
If you go bankrupt, the law sets out some things you can and can’t do. You must give the official receiver details of all your debts, assets and income. It’s a criminal offence to hide any assets or deliberately give an official receiver or the Accountant in Bankruptcy false information.
Other offences in bankruptcy include:
- Changing the name of your business to try and hide your bankruptcy
- Borrowing more than £500 from a creditor without telling them you’re bankrupt
- Refusing to hand over documents the official receiver asks for
It’s very important to be open and honest with the official receiver looking after your bankruptcy.
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