Who Will Be Told If I Go Bankrupt?
Who Will Be Told If I Go Bankrupt?
Who Will Be Told If I Go Bankrupt?
If you declare yourself bankrupt, it is important to understand who will be made aware of your situation. We consider who will be informed about your bankruptcy and how to manage this.
Declaring yourself bankrupt has become much more private over the past couple of years. The most important recent change is that your bankruptcy is no longer made public. This means that your name and address will not appear in your local newspaper.
If you are a sole trader or there are other very particular circumstances, the official receiver (OR) could still decide to advertise your name in the local newspaper. However this has now become very unusual.
As a bankrupt person, your name will still be included in the insolvency register. This register lists everyone who is currently bankrupt. The register is publically available on the internet so someone could search on your name and discover that you are bankrupt.
However, the fact is that people will normally have no cause to look your name up on the insolvency register and most do not even know of the existence of the register.
Despite the generally private nature of bankruptcy, some people will still be told.
Your creditors
All of the unsecured creditors that you list on your bankruptcy statement of affairs form will be contacted by the official receiver and informed that you are bankrupt.
As such, any friends or family who you owe money to that you include on the forms will become aware of your situation.
Anyone else that you owe money to on an unsecured basis but do not include on your form will not be told that you are bankrupt.
However, they will still be legally bound by the terms of the bankruptcy. They will be considered to have been made aware by the fact that your bankruptcy is advertised in the London Gazette.
The London Gazette is a specialist publication listing all cases of personal and company insolvency during any particular month. Generally speaking the only people who keep a close eye on the London Gazette are commercial banks.
Your landlord
If you are a home owner your mortgage lender will be told that you have been made bankrupt.
If your house has little or no equity and you plan to remain in the property, the mortgage lender should not be concerned about your bankruptcy and will not act to repossess your house unless you stop paying your mortgage.
If you are renting your property, your landlord will be told that you have been made bankrupt.
Many landlords will not really understand what bankruptcy means and will be concerned if they hear you are bankrupt that you will not be able to pay your rent.
However, the reality is that as a bankrupt you will be in a better position to maintain your rent payments. This expense is specifically included in your living expenses budget and you will no longer have to try and pay your unsecured debts.
It is therefore sensible to speak to your landlord before declaring bankruptcy to explain the situation to them and confirm that their rent is guaranteed.
They will then not be surprised or worried when they are formally contacted.
Your bank
Your bank will find out that you are bankrupt through the London Gazette.
It is likely that any bank accounts or savings accounts that you have been operating before your bankruptcy will be frozen unless you are already using a simple card cash account.
However, it is important to understand that you can and should have an operational bank account to use after you are bankrupt so your income can be paid in and any direct debits for living expenses such as your rent paid out.
You should therefore open a new bank account just before you declare yourself bankrupt so it is ready to use.
Tell the bank before making the application that you intend to declare yourself bankrupt so that they offer you an account that they will be happy to keep open for you after you are bankrupt.
Your employer
Your employer will not be told that you have gone bankrupt.
If the official receiver tells you to make a monthly payment towards your creditors, you will be expected to arrange the payment yourself from your bank account. It will not be automatically deducted from your wages.
Whether you choose to tell your employer about your bankruptcy is your own affair. For the majority of positions it will not make any difference and most people will chose not to tell their employers.
However some roles require you to have a good credit rating and may specifically state that you should not become insolvent in the employment contract terms.
If you have this kind of position you must think carefully before declaring yourself bankrupt and perhaps even discuss the situation with your employer.
A private arrangement
One of the disadvantages of bankruptcy was that your name and address were printed in the local newspaper.
However, in the majority of bankruptcies, this no longer happens and so bankruptcy has become much more private.
Nevertheless, if you are considering bankruptcy you should be aware that some people will still be told including your landlord and bank. But as long as you make plans to manage this, you should have little or no problem.
If you are struggling with debt, visit www.beatmydebt.com. Our vibrant forum gives free access to industry experts and others who have suffered with debt problems. Useful guides, calculators and information are also available designed to help you understand how to manage and resolve debt problems.
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