What is Bankruptcy?
Bankruptcy is a formal legal process which happens when someone does not have enough money to cover their liabilities.
How does bankruptcy procedure work?
There are two types of bankruptcy proceedings - a debtor's petition and a creditor's petition.
A person who cannot pay their debts can apply to make themselves bankrupt (“a debtor’s petition”). Often people take this option if they have been struggling to pay debts for some time and it becomes obvious that they will not be able to pay them off.
In other cases, a bankruptcy order can be sought by someone who is owed money, who is called a creditor (“a creditor’s petition”), in the hope that they will be able to recover at least some of the debt from the bankrupt person.
Either the debtor or the creditor can ask the court to make a declaration of bankruptcy.
When a bankruptcy order is made by the court, all of the assets of the bankrupt person are taken over by the Official Receiver. The Official Receiver then administers the affairs of the bankrupt. Effectively, the Official Receiver steps into the bankrupt’s shoes in terms of the property and other assets that they own.
Legal Advice about Bankruptcy
Bankruptcy is a technical and complex area of law. In some circumstances, you might be happy to deal with the bankruptcy yourself, but in other cases you might need to seek legal advice.
You may have been made bankrupt and you think the order has been made wrongly, then there are ways in which your bankruptcy can be challenged.
If your spouse has been made bankrupt and you wish to ensure that your family home is protected, it is important to obtain advice as quickly as possible. Or if you want to make sure that family heirlooms are preserved and not sold by the Official Receiver, we can give you the necessary advice.
At Samuels we have extensive experience in acting for people who have been made bankrupt, who are threatened with bankruptcy, or who are creditors who might wish to use the bankruptcy procedure as a last resort.
We can assist on many different aspects of bankruptcy law, for example:
- Avoiding bankruptcy if you’re in financial difficulty;
- Going through formal or informal bankruptcy procedures;
- Negotiating repayment agreements with creditors or debtors;
- Recovering money owed by an insolvent individual or company;
- Protecting family assets if a family member is insolvent;
- Purchasing assets from insolvent estates;
- Structuring transactions to manage the risk of other parties becoming insolvent;
- Applications to set aside a bankruptcy order; and
- Claims by or against bankrupts.
Whatever your situation, it’s vital to secure legal advice and representation as soon as possible to ensure the best possible outcome. Contact us today to find out how we can help.