Which types of debts are Dischargeable within Bankruptcy ?
Debt Advice for UK residents explaining which types of debt are normally written off in a bankruptcy or IVA, and which type of debts must noramally be paid back.
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Debts Not Written Off by Bankruptcy
Bankruptcy does not clear all debts in all circumstances. You may still be liable for some debts, even after discharge from bankruptcy. This includes debts incurred during bankruptcy.
Secured Debts
The debt is enforceable only if it remains secured on that asset. If the asset was sold to provide funds towards the bankruptcy, but did not cover the amount owed, then that debt is no longer secured and therefore not enforceable.
Benefit and Tax Credit overpayments.
Where overpayments are made before the bankruptcy order, but a decision is made to recover them after the bankruptcy order, then the debt remains after bankruptcy discharge.
In the case where the overpayment is made and recovery sort before the bankruptcy order then debt is included in the bankruptcy. The exception to this is overpayment due to fraud, in which case recovery can by enforced despite bankruptcy, whenever the overpayments were made.
Council Tax
You are liable for council tax for the remainder of the current year if not served with a liability order or final demand.
Child Maintenance
Liabilities from an order made in a family or domestic court, such CSA claims for child support.
Student Loans
Most educational loans cannot be discharged as they fall outside of the Insolvency Act 1986.
Court Fines
Court Fines imposed for an offence and Liabilities from a confiscation order made under S.1 of the Drug Trafficking Act 1986 0r S.71 of the Criminal Justice Act 1988
Personal Injury Claims.
Debts from personal injury claims made against you.
Fraud
Debts arising from your fraudulent conduct are outside of bankruptcy.
Any credit obtained just before bankruptcy
Last-minute credit obtained with little intention of respecting the credit agreement can be excluded and/or result in a Bankruptcy Restriction Order.
Interest
You may be liable for an interest payable on any of the above debts.
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See Also Abacus Debt Advice- Bad Debt Management
This material is for general information and only constitutes advice in the broadest of terms. You should not rely on this information to make any decisions. Call our advisors on 0800 043 2444 for professional advice for your own particular situation.