What I would be interested to know is how bankuptcy affects one. What happens to the assets? Is your wages safe (if you are working)? What you can and cannot do once you've been declared bankrupt in terms of obtaining credit?

Dont think you'll have any control over your assets, it'll be the job of the official receivers or trustees. If you own a house, it will probably have to be sold and the proceeds will go towards paying off outstanding debts. Certain items need to be disclosed too, like: vehicles, tools, furniture, household goods/equipment, etc. I understand that if their individual value is higher than the cost of replacement, they'll also have to go. As far as wages are concerned, i believe trustees could apply for part of it to be deducted, but it's best to check with the professional adviser.

Yeah, however, trustees will need to apply to court for an IPO (income payments order). In this case you'll have to pay so much of your wages towards the declared debts. Think, courts are usually reasonable as they would not want to leave you destitute with no money to pay your current living expenses. Obviously, an IPO could be varied if your income goes up or down.

Alternatively to IPO, a person who is going through the bankruptcy process may agree with his trustee that he'll pay a certain amount of their income towards their outstanding debts for a certain period of time. This type of agreement is called an Income Payments Agreement (IPA). Neither IPO nor IPA could last more than three years.

I've recently come accross this and hope you'll find this info useful (no reflection on my age, by the way!) (IMG:style_emoticons/default/smile.gif)

Your pension is not considered as an asset in terms of bankruptcy if you filed your petition after 29 May 2000, but your pension scheme must be approved by the HM Revenue and Customs.

One of the consequences of bankruptcy is that if the bankrupt person wishes to buy a house in the future, he/she should wait 24 months to become an applicant for the home loan again. During that two-year period a person should be employed and prove the positive credit file. I guess that if you are recognized as a bankrupt and within few months you buy a house that will be observed as fraud.

Cheers for the input, most informative. Did not know that part of one's wages could be taken to pay towards one's debts (although it makes sense).