Personal bankruptcy is where an individual is insolvent, and they cannot pay their ongoing unsecured liabilities. An individual can either file for their own bankruptcy, or one of their creditors can petition for the individual’s bankruptcy though the court. Once the person is made bankrupt, then the procedure is the same and the individual’s assets will be sold and the monies will be used to pay the creditors. Bankruptcy will free the individual from their debts, but at the cost of losing control of their personal assets.
A bankrupt’s affairs will be dealt with by an Insolvency Practitioner (IP) who is known as your Trustee and all of the bankrupts assets will vest in the Trustee, which means that the bankrupt will lose control of their assets. There are certain assets that the Trustee cannot touch, and we will be able to discuss this further with you.