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Can you go Bankrupt twice?
Bankruptcy it is probably something you told yourself you would never do again. However if you have got back into debt you are legally allowed to apply again if you want to.
There is no time restriction on when you can apply. As such it is even possible to go through the process within a year or two of your last discharge.
The first time you went bankrupt may have been some years ago. As such it is important to familiarise yourself with the changes which may have happened since you last went through the process.
You no longer have to apply to go bankrupt at the Court. The process has moved on-line.
Will you be penalised if you go Bankrupt Again?
It is very unlikely that you will be penalised for going bankrupt twice. Your new circumstances will be reviewed by the Official Receiver (OR) in isolation.
The length of your bankruptcy will not change because it is your second time around. You will remain bankrupt for 12 months as standard. You will not be treated any differently simply because financial circumstances have turned against you once again.
If you have made a transaction at undervalue in the last 5 years or made a preferential payment to a creditor in the last 2 you will be at risk of getting a BRU. However this is the sae for everyone. It is nothing to do with the fact you have been bankrupt before.
Given you co-operate fully with the OR you should not be penalised if you go bankrupt for a second time.
Will Debt Payments be required if you go Bankrupt Twice?
The fact that you are going bankrupt again does not automatically mean that you will have to make payments towards your debts. This will depend entirely on whether or not you have any disposable income.
The OR will review your income and expenditure budget in the same way as anyone else going through the process. Where you do have a surplus you will be required to pay this towards your debts for 3 years.
However this is nothing to do with the fact that you are bankrupt for a second time. You cannot be made to pay towards your debt unless you can afford to do so.
Changes to the rules introduced in December 2010 now mean that 100% of your disposable income must be paid towards your debts.
Will you be forced to sell your home if you go Bankrupt Twice?
You do not automatically have to sell your home if you go bankrupt twice. The rules in this area are the same whether you are going bankrupt for the first or subsequent times.
If there is little or no equity in your property there is minimal risk. You will still need to buy back your beneficial interest from the Official Receiver. However that can be done for a relatively small payment.
There will be more of a problem if you have a larger amount of equity. If you are unable to release this in any other way you might face having to sell your home.
Want to understand how to protect your property from Bankruptcy? Give us a call (0800 044 3194) or complete the form below to speak to one of our experts.
I have been advising people on how to solve their debt problems for over 20 years. During this time I have helped many people go bankrupt. I am an FCA Approved Person and the Managing Director of Wilmott Turner Financial Services (owner and operator of Bankruptcy Expert