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Undischarged Bankrupt — Its Restrictions & Consequences

When you are struggling with debts, bankruptcy can be a way out. In doing so, you might come across the term Undischarged Bankruptcy, it is the correct term that denotes the present and ongoing situation of bankruptcy. But, aren’t you curious to know what does undischarged bankrupt mean!

Basically, during the bankruptcy process, your hired Insolvency Practitioner will play a key role. He/she will visit the court and declare you bankrupt. Before you proceed, make sure that you don’t have any assets. After the declaration, if the investigation executives somehow find any of your assets, then the declaration will be immediately cancelled. 

Undischarged Bankrupt: What is it?

Undischarged bankruptcy is continuous, a timespan is given till the process ends. Another third person might be necessary for this process, who will act as a trustee. Thus, the trustee will help you in the negotiations. When bankruptcy is declared, you have to pay a certain amount of money as the previously agreed amount will accelerate the repayment of debt. 

Are you an Undischarged Bankrupt?

One of the most common aspects of being an undischarged bankrupt is the debts. In order to support the debt repayment, the concept of bankruptcy comes into the picture. Whenever your assets are in the creditor’s custody and you are still continuing with the payments to fulfil the debts, you will be considered the undischarged bankrupt. 

What are its Restrictions?

Certain restrictions are there while the undischarged bankruptcy is active. The list starts with — You are not allowed to make additional expenses on those assets which are still with the creditors. In addition to that, the process of bankruptcy will also not let you purchase any other assets. 

How long does it take to discharge?

Generally, a standard bankruptcy gets discharged in just 12 months. During this timespan, you need to repay the entire debt. Once the repayment is done, you will be free from every debt. If you are late in making the payments, then it is called the delayed discharge. Thus, more time will be needed to lift the bankruptcy. 

Permission to Travel?

While you are still in the undischarged bankruptcy, you can travel. There are no specific restrictions on travelling in Scotland, England and Wales. Travelling doesn’t impact the process of debt repayment. The main intention of the creditors is to receive the money from you. They are least bothered about where and how you are travelling. Just keep paying them the allotted amount. 

In the country of Northern Ireland, things work somewhat differently. If you are a citizen there, then informing the person who deals with the process of bankruptcy is mandatory. Give him/her all the details of your trip. After that, the person will draw out a court order that will get you permission to travel. On the other hand, there are also a few restrictions regarding that. 

What will happen after the discharge?

After the discharge, there will be no debts upon you. In addition to that, all the restrictions regarding the bankruptcy will also get lifted eventually. But, one more thing, if you are making payments with the help of Income Payments Agreements, whose process is quite slow, you might have to continue to make payments for 2 to 3 years after being discharged. 

Some exceptional Debts

After being discharged, as usual, you will be free from bankruptcy. But, there are some exceptional debts that might accompany you even after that, such as debts associated with fines, family court proceedings, crimes, and others. 

Moreover, some outstanding loans also play a part in making these types of debts exceptional. If any of your assets are related to the exceptional debts, it will not be discharged. The item will still remain under the control of the trustee until you make the full payment. 

Always Claim the Evidence….

As you have been discharged from bankruptcy, the best idea will be to claim the evidence related to it. Make sure that the evidence is official, with proper signatures on it. As the discharge will happen automatically, the creditors or the trustee might not be able to send the documents to you at once. Therefore, it’s your duty to claim them. The discharge confirmation letter is the item that you must keep with you for future reference. 

What does the Confirmation Letter Contain?

The discharge confirmation letter will contain some valid information, and they are here as follows: 

  • Initial, middle and surname.
  • Date of birth.
  • Permanent residential address (current).
  • National Insurance Number.
  • Reference number of the Court. 

If you are eager to gather more information, then do request for the certificate of discharge, it might cost roughly around 60 to 70 pounds. 

The Reflection on the Public Records 

Once you agree with the bankruptcy, it will get reflected on the public records. It will remain there till the end. After the discharge, you might want to make the necessary changes in the records. There are some public records that update automatically, based on the current status. 

What is Your Status on the Insolvency Register?

After the discharge, your name will still remain on the Insolvency Register for three months. After that, it will get deleted eventually. Now, if you take the records of the credit into the consideration, the entire matter will remain there for up to 6 years. That is why it’s better to pay off the debts anyhow and never be bankrupt. 

What is the Timeline of Undischarged Bankruptcy?

The process of undischarged bankruptcy has its own typical timeline. Gathering sound knowledge about it will be helpful for you in the future. They are here as follows: 

  • During this process, the file assessment and the lenders are restricted from attempting to collect the remaining debts. 
  • According to the statutory functionalities of the Bankruptcy and Insolvency Act, the compliance must be on the income, expenditure, various fees payments, counselling sessions, tax information and others. 
  • A 9-month bankruptcy discharge is available when compiling all the duties with zero opposition charges. 

When you are being bankrupt for the 2nd time without any type of surplus income payments, then the time duration of the discharge will be 2 years. Furthermore, the additional discharge will be increased up to 3 years. 

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