A creditor can apply to make you bankrupt if you owe them at £5,000.
Before a creditor can apply to the court to make you bankrupt, they have to show they’ve tried certain legal methods to get you to pay your debt. These are normally one of two methods:
- Sending or giving you a statutory demand – this is a legal notice about the money you owe. If you don’t pay or come to an arrangement to pay within 21 days, or get the statutory demand cancelled, your creditors can ask the court to make a bankruptcy order
- Attempting to enforce a court judgment that’s been made against you using bailiffs or another enforcement process. The bailiffs must have made enough serious attempts to enter your home and take your property.
If the creditor can show they’ve tried one of these methods to get you to pay but failed, they can apply for your bankruptcy.
A debtor can petition for his own bankruptcy only on the grounds that he is unable to pay his debts. The petition must be accompanied by a statement of affairs in the prescribed form.
You will need to pay the court fee and deposit towards the administration of the order. In some circumstances the court fee can be waived, but not the deposit.
The form must be presented at your local county court with Bankruptcy Jurisdiction, unless you have lived/traded in the area of another county court for most of the past six months.
The court, on receipt of your forms, will arrange for the matter to go to the district judge. Most cases do not result in a hearing. However, should a hearing be arranged you, as the debtor should attend.
Form and content of the petition
The petition must contain the following information in relation to the debtor :
a. His/her name, address and occupation;
b. the name(s) in which he/she carries on business and whether he/she carries on that business alone or with others;
c. the nature of his/her business and the trading address(es);
d. the names or names in which he/she has carried on business during the period in which the bankruptcy debts were incurred and whether he/she carried on those businesses alone or with others; and
e. any address(es) at which he/she has resided or carried on business during that period, and the nature of that business.
If the debtor has used any other names than the one given, these must be included in the petition
Admission of insolvency
The petition must contain a statement that the debtor cannot pay his debts and a request that a bankruptcy order be made against him. Details of previous bankruptcies together with information regarding any composition scheme of arrangement or voluntary arrangement into which the bankrupt has entered or administration order to which he has been subject in the previous 5 years must be given and if there is a voluntary arrangement currently in force, the name and address of the supervisor must also be given
Statement of affairs
The petition must be accompanied by a statement of affairs verified by a statement of truth, prepared on the statutory forms. The statement of affairs should contain details of the debtors creditors and his assets and liabilities
Procedure on issue
Where the petition is not to be heard immediately, then a date will be fixed for a hearing as soon as possible. If the petition made reference to a voluntary arrangement being in force, then the court will fix a hearing date, giving 14 days notice to the supervisor of the voluntary arrangement. The supervisor has the right to attend and be heard at the hearing
At the hearing the court may make a bankruptcy order or it may appoint an insolvency practitioner to prepare a report as to the prospects of a voluntary arrangement.
Specific advice should be obtained before taking action, or refraining from taking action, on any of the issues covered above.
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