McTear Williams & Wood

Bankruptcy will free you from unsecured debts.  Secured creditors (those who have a legal charge i.e. a mortgage) will retain their security even though you are bankrupt.  However, your assets – with some exceptions – will be sold and the money used to meet the cost of the bankruptcy and the claims of your creditors.

Yes.  If you want to see what form the reporting will take, check out the Public Notices column of your local newspaper – usually alongside the planning and licensing applications.  Bankruptcy notices don't often hit the headlines unless you are a celebrity (though many professionals have to read them as part of their job).

If you have an interest in a home or any other property, then any value (equity) in that property will have to be realised for the benefit of your creditors.  Suppose you and your partner own a house worth £150,000, but have a mortgage of £80,000.  The equity – net worth – of the property is therefore £70,000.  Your share of the equity is £35,000 and your creditors will expect to see that £35,000 realised.

There is a misconception that when a person is made bankrupt the bailiffs come and clear their homes.  The law allows bankrupts to retain their domestic effects including furniture, white goods (such as fridges and washing machines) and clothing.  This does not however extend to items of particular value such as antique furniture and works of art, valuable jewellery, expensive electrical goods (some IT equipment would be fair game) and high value sporting goods.  

Jointly owned items can also be taken – they are sold and the proceeds divided between your creditors and the other joint owner.

Not for your personal debts but if the debt is in your joint names or they guaranteed your debt then they will be "jointly and severally liable" for the debt – that is, creditors can pursue them for the whole of the debt.

 Yes, providing that:

• Your mortgage lender is confident that you will be able to maintain your regular mortgage payments and deal with any arrears; and 
• Your trustee in bankruptcy does not consider that your monthly payments are excessive for your needs when compared, for instance, with the cost of renting a suitable home.

You can have a bank account but many banks will not accept your application for an account if you are an undischarged bankrupt.  There are, however, some banks and building societies that will accept bankrupts.

No.  But if you have transferred your assets to members of your family to avoid losing them to your creditors by, for example, giving away your Rolex watch to your 18 year old son just before going bust, this would be attached as a "transaction at an under value" and an application would be made to Court to have it set aside.

A bankrupt's pension fund is off limits – it is not available to a trustee in bankruptcy.   Other savings such as endowments and saving bonds will go into the kitty to be realised in the bankruptcy.

Yes, providing that it is of low value and you can persuade the authorities that you need it to get to work.   However, any claim that you need a Range Rover for the school run or a Porsche to get to the golf club will not be accepted!

Yes you can, so long as you:

• Do so in your own name, or the name in which you were made bankrupt; or
• Make it clear to all those with whom you do business that you are bankrupt.

As a sole trader you will find the financial restrictions of bankruptcy a serious impediment to running a business and, while there is no legal bar as such, the practical problems (such as buying materials when you are only allowed £500 credit) may make it impossible to trade.

As a bankrupt you are disqualified from acting as a director of a limited company without special leave of the Court.  You are similarly barred from acting in any managerial capacity of a limited company.  And certain professions, such as medicine and the law, do not allow bankrupts to practise.

It is becoming easier to obtain mortgages and other credit after bankruptcy.  There are a number of specialist lenders operating in this field. You must however expect to pay a higher rate of interest for at least the first two years of the loan.

You must inform the trustee in bankruptcy about any windfalls or inheritances that you receive during your bankruptcy and the money must be paid to your trustee in bankruptcy.  If your creditors are paid in full with statutory interest any surpluses will be returned to you and your bankruptcy can be annulled.

It is, however, sensible to ask anyone who is likely to mention you in their Will to make other arrangements – such as leaving the money to your children instead.   Anything willed to you during your bankruptcy would go towards paying off your debts; a scenario that is unlikely to reflect the wishes of the will writer.

Debtors' prisons were abolished in this country in 1869 and nobody can send an honest bankrupt to jail.  You could conceivably go to prison for fraud or other dishonesty in connection with the bankruptcy proceedings.  If you think this may apply to you, seek professional advice as a matter of urgency.