A Court makes an order of bankruptcy after a bankruptcy petition has been presented. A petition is usually presented to the court in one of two ways:

• By yourself. This is known as a debtor’s Petition or Voluntary Petition for Bankruptcy.
• By a creditor who you owe at least £750. This is known as a creditors’ Petition for Bankruptcy.

How do I make myself bankrupt?

If you want to make yourself bankrupt you will need to complete the application for a bankruptcy order and petition for presentation to the court. The fees required to do this are approximately £600 and need to be paid on the day you present the petition. Conversely, should a creditor make the petition for your bankruptcy the fees will be paid by the petitioning creditor and not by you.

The petition is usually heard the same day and is granted unless the judge considers the application inappropriate and may send you away to seek professional advice. Once granted you will be required to present yourself to the official receiver who will investigate your affairs.

What happens next?

Your income and expenditure will be assessed by the official receiver using the consumer credit guidelines and if appropriate an income payments order may be enforced upon you if your circumstances allow. Should the official receiver identify undisclosed assets or believe there are assets which you have previously placed beyond the reach of creditors he may instruct recovery proceeding himself or instruct a licensed insolvency practitioner to recover the asset/s on behalf of creditors of your bankrupt estate. Going bankrupt is not an option for everyone, if you are able to afford to repay your debt, a creditor or court will recognise this and it is not advisable to lie in court as the consequences can be very serious.

How long does bankruptcy last?

A discharge from bankruptcy is the process that ends the restrictions of going bankrupt and releases you from the majority of the debts you owed at the date the bankruptcy order was made. This usually occurs after 12 months, on the first anniversary of the bankruptcy order, but there may be different dates which might apply to you.

What are the effects of Bankruptcy?

• You will have to report to the Official Receiver and provide him with details of your financial affairs.
• Your Trustee in Bankruptcy will effectively own all your assets and look to realise their value for the benefit of creditors.
• You will usually have to close your bank account and move to an alternative bank
• You are unable to obtain credit exceeding £500 without disclosing your Bankruptcy.
• The Bankruptcy Order is registered with credit reference agencies for at least six years.
• Your employment may be affected depending upon what job you do.
• You cannot be a company director or hold public office.
• A bankruptcy order can still be made even if you refuse to acknowledge or agree to the order presented by a creditor.
• You should try and co-operate if bankruptcy proceedings have commenced against you.
• If you dispute the creditors’ claims you should try and reach a settlement with them before the bankruptcy order is made. Trying to seek an annulment afterwards can be difficult and expensive
• A limit of three years may be placed on the Trustee’s rights to realise equity in your home. (Previously this was unlimited).

Although much of the stigma associated with bankruptcy has been diluted all Bankruptcies are a matter of public record and will be advertised in London Gazette and possibly a further local newspaper.

More serious penalties can be imposed on those who are considered to have brought about “going bankrupt” through reckless or irresponsible behaviour. Restrictions after bankruptcy could last for up to fifteen years.

What if I don’t agree with the bankruptcy petition?

Take professional advice from an Insolvency Practitioner. We provide advice about bankruptcy free of charge so if you think you need advice about any aspect of bankruptcy call us