Insolvency – FAQs
Following you’ll find some of the most frequently asked questions from those facing insolvency together with our responses:
- Will I go to prison?
No, unless you have committed a bankruptcy offence, which is most unlikely.
- Will I lose my house?
Not necessarily. You may be able to reach an arrangement with the trustee to “buy it back”.
- How long will the whole process last?
Provided you co-operate and this is your first bankruptcy, 12 months or less.
- What about my creditors?
They will all have to deal with your trustee. They are not able to contact you and if they do you can take action for harassment.
- Are there any debts that are not covered by the bankruptcy?
Yes, matrimonial periodic payments orders, some student loans and criminal fines.
- Will there be jobs I won’t be able to do whilst I am bankrupt?
Yes. Company director, MP, local councillor; some professions allow members to be bankrupt, others don’t e.g. solicitors do (subject to restrictions) accountants don’t.
- My company is going into liquidation. Will I be personally liable to my suppliers?
Only if you have traded deliberately knowing the company is insolvent.
- My company is in liquidation. It had an overdraft and I provided a personal guarantee. Do I still have to pay this?
- I am being threatened with Directors Disqualification Proceedings. Does this mean I will go to prison?
No, but you should seek legal advice immediately.
- I am being advised by a debt advisory company and they want me to pay them £4,000 so they can sort out my personal debts. Should I pay them?
No. You should seek advice first from a solicitor. They will be able to advise you as to which debts are due and owing and which might be the subject of a dispute. Once you have done that, you might need to see an Insolvency Practitioner.
- My company paid £5,000 to a debt advisory company to help with its financial problems but nothing seems to have happened and they won’t return my calls. What can I do?
See a solicitor immediately. They may be able to recover your money and will be able to advise the company on how to deal with its financial problems.
- I want to make myself bankrupt. Is this an easy process?
Yes. Talk to us about the process and implications, also you’ll find plenty of current information on the Insolvency Service website.
For advice and guidance on all issues relating to insolvency, please don’t hesitate to contact us.