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Bankruptcy is a legal procedure
that should be used only as a last resort for solving financial problems, after
you have explored other options.
A decision to file for bankruptcy is a serious step, and in many cases, it
doesn't wipe your credit slate clean or give you a fresh start. It also
stays on your credit report for a certain number of years
depending on the bankruptcy laws of your country, possibly affecting
your ability to buy a home or even obtain car insurance. Also, bankruptcy
may not permit you to keep property when the creditor has an unpaid
mortgage or lien on it.
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Every country's bankruptcy laws may differ, and the obligations
that result from filing for bankruptcy may vary. Consult your banks
or financial or legal advisors before making a decision. They will
help you decide if filing for bankruptcy is the only option or if
there are better alternatives.
Generally, if you are declared a bankrupt, the court usually appoints
the Official Assignee to administer the bankrupt's affairs, which
includes selling of assets, registration of creditors' claims and
paying out dividends to your creditors. The Official Assignee is
a public servant and an officer of the court.
The Official Assignee takes over the title to your assets and has
the responsibility to realize them and pay a dividend to your
creditors. If you are employed, the Official Assignee will assess the contribution
you must make to repay your debts, after taking into account what
you reasonably need to upkeep yourself and your family.
There are many restrictions that may be imposed on you if you are
declared a bankrupt. You may not be permitted to leave the country
without the permission of the Official Assignee. Generally you cannot
bring or continue any court action, you may also be disqualified
from being appointed or acting as a trustee, play a direct or indirect
part in the management of a company or a business or to act as a
director of a company without the sanction of the court.
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