Going through bankruptcy in Scotland with CAP

All Scottish bankruptcies are listed on the Register of Insolvencies. Your details will be removed from this register two years after you have been discharged from bankruptcy. Although this is public, it’s unlikely anyone but your creditors will search for a record of your bankruptcy.

There is normally no reason for your employer to be told about your bankruptcy if you’re currently working, though we advise that you check your contract of employment to be certain. However, there are some jobs you are not allowed to have during your bankruptcy, including being a solicitor or a director of a limited company. It might affect jobs in banking and financial services too. There are also voluntary jobs you can’t do, like being a trustee of a charity or a school governor. If you’re unsure if your job will be affected, you should speak to your employer.

Once your bankruptcy has been approved, you’ll be officially declared bankrupt. The bankruptcy will formally end (you will be discharged) after six months for a MAP or twelve months for full bankruptcy. During these months, there are some things that you need to be aware of:

Income

If you have an increase in your income, this will need to be declared to the Accountant in Bankruptcies (AiB). If you’re receiving income from a wage or a private pension, the AiB may ask you to make a monthly payment towards the bankruptcy. This is called a Debtor Contribution Order and it usually lasts for 48 months.

Personal details

It’s your responsibility to keep the AiB up-to-date with any changes in your circumstances during this twelve-month period. This includes your employment, financial changes and any other personal details.

Assets

If you receive an asset of significant value or a lump sum of money (like lottery winnings, inheritance or a tax rebate) during your bankruptcy, you’ll need to declare this to the AiB. It’s likely that they will seek to take this and use it to pay your creditors.

Credit

If you want to take out more than £2000 of additional credit during your bankruptcy, you must tell that creditor that you are bankrupt.

You may find that any bank accounts in your name are ​‘frozen’ after your bankruptcy is approved. It is usually only for a few days. This is just temporary and isn’t the same as your account being closed. During this time, you may not be able to take out any cash or make payments on a debit card. Any Direct Debits or standing orders you’ve set up will be delayed until after this period.

Because of this, it’s a good idea to withdraw any cash that you may need during this time, before you submit your bankruptcy application. It may also be sensible to submit your application just after being paid to ensure you have enough money to take some out beforehand.

Your bank may decide to close your account once you’ve been made bankrupt. If this happens, you should be able to find another bank that can provide you with a basic bank account. It may be sensible to wait until after you’ve submitted your bankruptcy to open a replacement bank account, otherwise you’ll have to list this new account on your bankruptcy application.

Some banks only allow bankrupt customers to have a specific kind of account. This may mean your existing bank may make you change the type of account you have. If you want to be certain about what your bank will do, get in touch with them about your options before we submit your application.