Bankruptcy Advice

Bankruptcy is a formal insolvency route for individuals with serious debts that they cannot pay. Bankruptcy is often the last resort and is usually applied when no meaningful alternative (such as an IVA) can be offered to creditors.

You may petition for your own bankruptcy or a bankruptcy order may be applied for by one of your creditors if you cannot pay what is owed to them. Whilst the Enterprise Act 2002 allows some bankruptcies to be discharged after one year, any proof of reckless spending may result in a bankruptcy period of between 2 and 15 years.

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Advice on becoming bankrupt:

A court makes a bankruptcy order only after a bankruptcy petition has been presented either by:

  • the debtor themselves (debtor's petition); or
  • by one or more unsecured creditors who are owed at least £750 (creditor's petition).
  • a supervisor of an individual voluntary arrangement may also present a petition if they believe they have grounds.

A bankruptcy order can still be made, even if the debtor refuses to acknowledge the proceedings or refuses to agree to them.

Once the bankruptcy order has been made the process involved is the same whoever issued the petition.

Advice on issuing a petition for your own bankruptcy

To petition for your own bankruptcy you must be able to show that you are unable to pay your debts.

However before making any decision about making yourself bankrupt it is essential that you seek independent advice. For this you may approach an insolvency practitioner or one of many free debt advice providers such as your local Citizens Advice Bureau. If you have carefully considered your circumstances and still wish to proceed, you should complete the following forms which can be obtained from the Insolvency Service website at the following links:

  • The Petition (MS Word) - This form is your request to the Court for you to be made bankrupt.
  • The Statement of Affairs - This form shows details of all of your assets, your debts, your income and expenditure and a brief statement explaining cause of bankruptcy. The form contains a Statement of Truth that will need completing.
  • Guidance notes for completing Form 6.28 - This provides you with additional information to help you complete the Statement of Affairs

The forms must be completed in capital letters using black ink and you will also require two copies of the forms before the Court will accept your petition.

Court staff can only advise you on the court procedure. They cannot give you the forms or provide legal advice.

You will have to pay two fees when you present your petition and Statement of Affairs to Court:

  • A deposit of £525 towards the costs of administering your bankruptcy. This deposit is payable on all cases.

If you are married and are both applying for bankruptcy you will each have to pay separate fees.

The fees should be paid in cash or by cheque made payable to HMCTS or HM Courts and Tribunal Service.

The court may hear your petition on the same day that you present it, or it may arrange a later date when it will be considered.

Bankruptcy Advice: How a bankruptcy petition may be made against you

If one or more of your creditors are owed £750 or more they may issue a bankruptcy petition against you.

Usually a formal demand for payment will be made by your creditors prior to issuing a bankruptcy petition. This may take the form of a final written demand or a statutory demand. If a statutory demand is made you must respond within 18 days. Once 21 days has elapsed from the date of the statutory demand being issued the creditor may issue a petition without additional warning.

The bankruptcy petition would then be served upon you in person at least 14 days prior to the bankruptcy hearing.

Advice on what happens once a bankruptcy order is made

Usually the Official Receiver will deal with your affairs once a bankruptcy order has been made against you.

The Official Receiver will contact you within two days of becoming aware of the bankruptcy order.

Within 21 days, you must provide the Official Receiver with all information they require regarding your financial affairs - including a list of all of your assets and the amount and details of all your debts.

An interview will be arranged to discuss your affairs with an examiner either at the office of the Official Receiver or by telephone.

The Official Receiver is a civil servant who is required to investigate the financial affairs of all individuals who are made bankrupt.

A licensed insolvency practitioner may be appointed trustee in place of the Official Receiver. Like the Official Receiver, they are required to deal with the disposal of your assets and the making of payments to creditors.

If you need further advice on bankruptcy and whether it's the right option for you, complete our online contact form now:

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