Q&As

Is it possible for an individual who is an undischarged bankrupt to incur further debts? Can these further debts include non-domestic business rates payable by the bankrupt?

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Published on LexisPSL on 10/04/2015

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • Is it possible for an individual who is an undischarged bankrupt to incur further debts? Can these further debts include non-domestic business rates payable by the bankrupt?
  • What happens to debts upon bankruptcy?
  • Non-domestic business rates

Is it possible for an individual who is an undischarged bankrupt to incur further debts? Can these further debts include non-domestic business rates payable by the bankrupt?

STOP PRESS: From 6 April 2017, the Insolvency Rules 1986, SI 1986/1925 were revoked and replaced by the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024. The content in this Q&A may have been affected by this change.

What happens to debts upon bankruptcy?

All provable debts are caught by an individual’s bankruptcy. Rule 12.3 of the Insolvency Rules 1986 (IR 1986), SI 1986/1925 states that 'all claims by creditors are provable as debts against the company or, as the case may be, the bankrupt, whether they are present or future, certain or contingent, ascertained or sounding only in damages'. Debts which arise after the making of the bankruptcy order (except for those which have arisen as a result of a liability that existed before the making of the bankruptcy order) are not provable debts, and are therefore not caught by the individual’s bankruptcy.

A person who is an undischarged bankrupt (ie a person who is in the first year of their bankruptcy, or such longer period if their discharge from bankruptcy has been suspended) is subject to a number of restrictions, including:

  1. they cannot act as a director of a company, or take part in the management, formation

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