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Debtor Guide - Bankruptcy

This guide provides general advice on bankruptcy for people who have been made bankrupt

What happens to the money my trustee ingathers?

The costs of administering your bankruptcy will be met from funds accumulated from the sale of your assets and contributions. These include the fees and costs of the trustee and will be paid before any payments are made to your creditors.

When the Accountant in Bankruptcy is the trustee, costs that cannot be met by selling your assets or from contributions will be met from the public purse. However, the public purse will not make any payment toward the debts owed to your creditors.

When an insolvency practitioner is the trustee, costs that cannot be met by selling assets or from contributions will be met by the trustee themselves. The insolvency practitioner will consider this before agreeing to act as trustee in your bankruptcy.

They will produce accounts at the end of the first year and at regular intervals until they are discharged. Their accounts must be approved by the Accountant in Bankruptcy or elected commissioners.

You will be sent details of the trustee’s costs and remuneration (fees), but this is not a bill and you are not directly responsible for paying them. You can ask to see the account and if you do not agree with the amounts you can appeal to the sheriff, if you can show it is to your financial benefit. The sheriff’s decision is final.

Where the sale of assets and income from your contributions produce enough funds to pay all the administration costs, a creditor who petitioned for your bankruptcy may then have their costs incurred in making the petition reimbursed.

The debts of all your creditors are then considered equally after this. Your trustee will look at the claims received and distribute the funds equally between them. These payments (known as dividends) may not cover the full amount of the debt. Any remaining debts will be discharged and you do not have to pay them.

However, there are some exceptions to this. Please see section what happens to my debts after I am discharged for a full list of the liabilities which are exempt from discharge.

If your creditors are paid in full, plus interest and there are assets or money remaining they will be returned to you.

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