The truth about bankruptcy
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The Official Receiver manages the first stages of your bankruptcy and can become the Trustee as well. Learn more here.
Are you looking into bankruptcy as a solution to your debts? If you are, then you probably have lots of questions about how it works and who actually decides what happens in your case. In this blog we’re going to look at the role of the Official Receiver and what they do before and after you enter bankruptcy.
Who is the Official Receiver and what do they do?
The Official Receiver (OR), is a civil servant in the Insolvency Service and manages at least the very first stages of a bankruptcy. The Trustee is the person who oversees the bankruptcy while it’s ongoing and until it ends. If an Insolvency Practitioner is not appointed to become the Trustee, then the Official Receiver will take up this role and manage the process from beginning to end.
The OR is responsible for making a note of all your assets and deciding whether they need to be sold and the money put towards your debts. While the OR is looking into your case, they may need you to provide more information about your circumstances. If this happens, it’s very important that you supply the information that they ask for, as you’re obliged to cooperate with them under the terms of your bankruptcy.
The OR will also look at your income and expenditure and decide whether you need to pay towards your debts throughout the bankruptcy. It is possible that your bank account will be frozen while the OR makes their initial investigation into your finances.
If you do need to pay towards your debts, you will start something called an Income Payment Agreement (IPA), and this normally lasts for three years, so two years after you’re discharged from bankruptcy. This payment will be based on what you can afford and will be less than the original, contractual amount you agreed with your lenders. You won’t have to pay towards your debts if your income is made up solely of state benefits.
If you apply for bankruptcy and there needs to be an investigation into what has led you to be in that position in the first place, then the OR will be the one to conduct that investigation. The OR is also responsible for informing your creditors that you have become bankrupt and, if they go on to become the Trustee as well, they will be in charge of sending your payments to your creditors, if you need to make any.
Will I have to deal with the Official Receiver?
If you apply to go bankrupt, you will have to deal with the OR at some points in the process. You will usually get a letter from them within two weeks of making your application.
They may send you a questionnaire to fill out. This is to gather all the important information about your financial situation, such as a list of your unsecured debts, whether you’re a home-owner and if you have any dependents.
The OR will also organise a time to have an interview with you. This interview normally takes place over the phone and is not something you need to worry about. It’s just an opportunity for the OR to ask any more questions they may have and to make sure the information on your questionnaire (if you had one) is complete and correct. The interview also gives you a chance to ask any questions you have about how bankruptcy works. You will need to put aside some time for this conversation as it’s a very important part of the process. How long it takes just depends on how complex your case is.
During your bankruptcy, if there’s a change in your circumstances that affects your financial situation, like getting a pay-rise or receiving inheritance, you must inform the OR (or your Trustee, if they’re two separate people).
So in summary, the Official Receiver is the person who initially deals with your bankruptcy application and interview, and can also become the Trustee of your bankruptcy as well. They will take control of your assets and will make sure that everything is done as it should be. It’s vital that you cooperate with them throughout the process, so you don’t run the risk of breaking the rules of your debt solution.
Hopefully, that’s clarified exactly who the Official Receiver is and what they do. It’s really important that you seek expert debt advice before you go ahead with bankruptcy, as it will have a serious effect on your life and you need to make sure it’s the best solution for you before you apply. You can get in touch with one of our advisors using the options at the bottom of the page, and if you want to know more about the process of bankruptcy, have a look at our dedicated page.
by Christine WalshBack to blog home