All the normal human fears and emotions had come up with my client, who I will call Paul for the sake of this article.
‘I never thought I’d be going bankrupt’. ‘Can I still pay my creditors back after my bankruptcy if I come into money’? ‘What will the courts be like’? ‘Will there be lots of people in the courtroom’? ‘Is there a jury’? ‘What should I wear’? ‘You’ll be there with me won’t you’? ‘Will anybody be nasty to me during my bankruptcy hearing’? ‘Will I go to prison’?
We had looked carefully at all the solutions for getting out of debt and bankruptcy just kept coming up as the solution to Paul’s debt issues. I had allayed his fears on all his questions and 4 weeks later we were standing at a coffee shop about 200 yards from the local county court building running over a few points for Paul’s bankruptcy hearing.
Before the bankruptcy hearing
As we sat drinking coffee, we both went over the 36-page document we had filled in for the bankruptcy hearing. It was filled in triplicate as required by the English and Welsh courts.
‘It looks great, but also daunting looking at your financial life inside all these pages’, said Paul.
Looking back over the document it was still clear that bankruptcy was the correct option for resolving Paul’s debt issues.
Paul was still a little nervous, as is natural, so we went over the ‘running order’ for the next 50 minutes or so. This helped calm the bankruptcy nerves and with no further questions we walked what Paul said seemed like a long 200 yards to the courts.
At the bankruptcy courts
I’m always reminded of the airport security arriving at the court for a bankruptcy hearing. Sometimes you walk through the airport style metal detector and then out comes the wand should you be unlucky enough to hear the alarm beep.
Do you know, I have never made it through the metal detectors at any bankruptcy court without the metal detectors setting off! This came much to the amusement of Paul as I had already pre-warned him but it helped lighten the mood and the guards were equally jovial about the whole matter.
Dignity back intact and keys collected we went off to the bankruptcy clerks desk.
The bankruptcy clerk
We were greeted through the door with the words ‘no Mr. Smith, this all needs to be filled out correctly before you see a judge’.
There was some poor fellow that was on his second visit to the courts trying to do his own bankruptcy documents. They aren’t that simple unless you take lots of time and effort to get it all right.
Poor old Mr. Smith was near breakdown as tears were welling up in his eyes. He was asked to sit back down and fill in his documents whilst the bankruptcy clerk attended to Paul and myself.
‘You’re back again’, the bankruptcy clerk recognised me. How they do this with 10,000 insolvency cases a month in the UK I’ll never be sure but then the bankruptcy court is practically my second home these days.
It only took a few moments and 3 questions to satisfy the bankruptcy clerk that everything was in order. She commented ‘it’s nice to be able to read the documents, you should see some of them that come here’.
We paid £475 in bankruptcy court fees and she went off to get a receipt book.
Paul and myself took a seat next to Mr. Smith and I introduced myself and passed him a business card. After a brief chat I was flicking through the pages he had filled out. Bankruptcy was clearly the wrong option for this guy and I suggested that he wait for about half an hour so that we can chat about some other options. Paul vouched for my services and I gave Mr. Smith a fiver to get a coffee back at the coffee shop we had just come from. I also placed my order of latte for about 5 minutes before I got there.
To say he was stunned would be understatement. Some stranger just gives him £5 and offers a free debt counselling session! He later became a client but that’s for another story.
The bankruptcy clerk returned, receipt in hand, noted that Mr. Smith was nowhere to be seen and ushered us into a side room. A few formalities and Paul was then swearing an affidavit on a religious book (the courts have a number of religious books available for this purpose) and we were then told to wait outside court number 2 for the judge to call us forward.
The bankruptcy hearing
No wigs, no dark wood paneled furniture, no jury, no ushers frantically capturing every word. Bankruptcy hearings are often a one-to-one hearing between the debtor and the county court judge. As I was also present that made 3 of us and we all sat in an office with recording equipment capturing our words and we proceeded.
Paul confirmed his name and address. He also confirmed that he wanted to go bankrupt. The judge then turned to me and started with the tougher questions but nothing that I haven’t been asked before. After the judge went over the implications of bankruptcy, reinforcing exactly what I had told Paul twice before. A few minutes later the order was signed at 10.37am (yes it is recorded that precisely).
The judge then spent a few minutes chatting with me about the work I do and we were soon out of the chambers.
After the hearing
Paul already looked like a different guy. Well who wouldn’t look happier with £32,000 wiped off your plate?
We waited back at the bankruptcy clerk desk. Yet another poor soul had got some of their paperwork wrong but obviously not on the scale of Mr. Smith earlier. Still they were having to air their finances to all and sundry whilst they got the paperwork right. The clerk will help with the odd bit of information but they cannot just rewrite documents all day.
It wasn’t long before we were back in the side room, court order printed out and telephone in hand booking a meeting to see the Official Receiver.
Every bankruptcy case in the UK is reviewed by the Official Receiver. We booked the next meeting with the Official Receiver and left the courts.
Paul and myself said our goodbyes. He was delighted and I was too. The bankruptcy hearing had gone well.
I then went off to find my latte and have a chat with Mr. Smith!
If you are considering bankruptcy. . .
Do get good advice from somebody that will guide you through the whole process and not just send you off in the direction of the local courts. Do sit down and get an experienced professional to go through everything in detail. Be aware of all the factors that will affect you if you decide to go bankrupt. Whilst this article is accurate, it cannot be used to replace advice from a professional organisation.
Ed Pearson is a Debt Dr. Debt Dr specialise in debt help and advice for individuals and small businesses. Ed can be contacted on 0845 123 4000 or in confidence on 07970 659266.
http://www.debtDr.co.uk ‘prescribing life without debt'
This article does not constitute regulated advice. Please remember that any action regarding financial advice should always be taken only after considering the specifics of your own situation.
Ed Pearson is a Debt Dr offering debt help and advice to individuals and small businesses across the UK. Whilst you may love the stuff he writes, you should only ever take action once you have considered your own set of financial circumstances with a professional. This article does not constitute financial advice.
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