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Bankruptcy Q and A
Q. How long will I be bankrupt for?
A. In a large majority of cases you would be discharged from bankruptcy within 12 months however you may have an IPA/IPO that could prolong payments to the official receiver for up to 3 years. The IPA/IPO is dependant on how much real disposable income you have.
Q. What is an IPA / IPO? (Income Payment Agreement / Income Payment Order)
A. If your income has an excess of what you require to pay for reasonable domestic needs for yourself and your family, i.e.“real disposable income”. The Official Receiver may ask you for an IPA, an agreement that allows him to take a proportion (50% to 70% ) from your real disposable income if its value is £50 or more a month. This amount is given to your creditors during your bankruptcy term. Should you not accept the agreement he may apply for an IPO to take the money through the court.
Q.How much do the courts charge to go bankrupt?
A. There is a deposit of £360 towards the costs of administering your bankruptcy. This is payable in all cases.
There Is a court fee of £150 but In some circumstances the court may remove this fee, for example if you are on income support or unemployed..
Q. Can I have a bank account if I am made bankrupt?
A. Yes you can have a bank account. Usually it will be a very basic account , you will be able to pay direct debits and have a cash card, obviously without any credit facility (overdraft).
Q. Can I become bankrupt if I am self employed?
A. Yes. But you will not be able to act as a company director or be involved in the management of a Ltd company.
Q. Can I include my student loan debt in bankruptcy?
A. Unfortunately since 1st September 2004 student loans cannot be included in bankruptcy.