Bankruptcy can be a very useful tool in certain situations. While it will rarely be used in the most optimal of circumstances, it can be an important way to deal with serious debts that could otherwise cause even larger issues.
Once bankruptcy has run its course, however, it can be useful to try to see a way out of the negative effects it can have on your life. One of the methods you can use is a process of annulment – let’s take a closer look at what that would look like.
Bankruptcy annulment
In short, a bankruptcy annulment is a process that uses a court order to cancel a bankruptcy. The end result, should the order be granted, is that the bankruptcy will essentially disappear.
Legally speaking, you will be in the same position as if the bankruptcy had never actually occurred, potentially opening you up to a range of different potential careers, job openings and lines of professional and personal credit.
Annulment vs discharge
The other common (and indeed automatic) way out of bankruptcy is through discharge. Bankruptcy is usually released after a period of about 12 months, after which the bankrupt individual will be discharged.
While you will have been formally released from the initial debts you were supposed to repay, the bankruptcy will remain on your record for a certain amount of time. This can impact your ability to pursue certain professional roles, and will also have an impact on your credit score.
Who is eligible for bankruptcy annulment?
There are certain criteria that must be met in order to annul a bankruptcy. They are typically suitable in:
- Situations where the bankruptcy order should not have been made in the first place.
- Cases where all the debts and bankruptcy fees have either been paid, or guaranteed by a third party. You will need to ask your trustee how much the fees are.
- Instances where you have organised an Individual Voluntary Arrangement (or IVA) to pay off your debts. This will generally require working with an insolvency practitioner such as Chamberlain & Co.
If these criteria are met, you can then fill in Form IAA, and send off the completed form to the nearest appropriate court.
Getting advice
If you find yourself bankrupt, or facing bankruptcy, then it’s important to seek advice from a range of different service providers. Depending on the context, that could include solicitors, accountants, and insolvency practitioners.
This isn’t a process that you can effectively navigate all alone, and you shouldn’t generally attempt to do so. Depending on your position, it could have huge impacts on your life later on, and the short-term costs of sorting your bankruptcy out properly will more than pay off in the long run.
Annulment can be an important and highly effective way of dealing with and mitigating the ongoing ramifications of bankruptcy. If you can either pay off your debts in full, have them guaranteed by a third party or enter into an IVA, you should be able to successfully navigate the annulment process.
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