The definition of bankruptcy is an individual that cannot repay their debts.

Usually the bankruptcy procedure begins with a petition being completed and served at the Court.

It can be from either party; the debtor (the party that owes money) or the creditor (the party that is owed money).

When the application goes to Court, all of the debtor’s assets are valued and scrutinised in fine detail.

If the bankruptcy application is successful, the debtor is relieved of his debts.

Please call us for a free no obligation chat on 0800 3 10 11 12

Debtor Application

This is the most common way in which an application for bankruptcy is served. The debtor may realise that making himself bankrupt is the easiest way to resolve his current financial situation. We advise that if a debtor is considering making themself bankrupt, that they have explored other avenues and that it should be used as a last resort. The debtor must owe at least £750 in order to make himself bankrupt. A Statement of Affairs and Petition must be served at a Court that deals with bankruptcy. Although we can complete these forms on the debtor’s behalf, the debtor will have to visit the Court in person in order to sign the documents. There are fees payable to petition bankruptcy.

What Does Being Bankrupt Mean?

If a debtor makes themselves bankrupt, they cannot:

  • Borrow more than £500 without informing the lender they are bankrupt
  • Act as a director of a company
  • Create, manage or promote a company without the Court’s permission
  • Manage a business under a different name without informing traders that you are bankrupt
  • Work as an insolvency practitioner.

If you do commit any of the above acts, it can be seen as a criminal offence. The likelihood is that the bankruptcy discharge can be extended further than the standard 1 year.

What Happens To My Assets?

If a debtor declares themselves bankrupt, or are made bankrupt by creditors then the debtor’s assets will be sold to pay the bankruptcy debts. There are certain items the debtor can keep which include tools of trade and household items such as bedding and clothing.

Within 2 weeks of the Court making your bankrupt, an Official Receiver will contact the debtor to arrange an interview. This interview will include going through all of the debtor’s assets in more detail to assess whether they can be sold to pay off the outstanding debt. Unfortunately the Court can demand that the debtor’s house is sold if this is the only way to pay the debt. This may not be the case if there is another person named on the title deeds.

However, this does not mean that the home won’t be sold, more that the selling of the home will be delayed. It may well be that you have to pay a certain amount per month from your wage. The Official Receiver will inform you if this is the case and an Income Payments Arrangement will be arranged. The amount you pay will depend on how much the debtor can afford after essential payments have been made.

When Does The Bankruptcy End?

The bankruptcy and restrictions generally end when the bankruptcy is discharged. This is usually 12 months from when the Court made the debtor bankrupt. However, the period can be extended depending on the behaviour of the debtor.

Creditor Application

A creditor that is owed money from an individual can make a petition for a bankruptcy order. This can be done when the debtor owes more than £750 and cannot realistically pay their debts.

Information Video About Bankruptcy

Adam Cresswell - Seatons Solicitors

Specialist advice about Bankruptcy matters

Hello, I am Adam Cresswell and I am the Head of Seatons Solicitors Civil Litigation Department.

We are specialists in Civil Litigation matters. Dealing with a dispute, whether it is small or large, can be a particularly stressful experience, especially if you are unsure about the costs and procedures involved. Our Litigation Team regularly handle a wide range of disputes and we can provide practical and specialist advice with the aim of resolving your dispute quickly and cost-effectively.

Contact us for a free no obligation initial chat. 

If you have a Civil Litigation matter and are thinking about pursuing it then please call us.

All you need do is simply pick up the phone and give us a call on 01536 276300 or use our online enquiry form and we can take things from there.

Latest Articles About Civil Litigation

4 Million iPhone Users Allowed To Sue Google for ‘Unlawful’ Data Aggregation

Anyone engaged in aggregating valuable personal data from the Internet will have to sit up and take notice after the Court of Appeal paved the way for a consumer rights campaigner to sue Google on behalf of more than four million Apple iPhone users.

Duties of Care Imposed on Public Service Providers Must Be Reasonable

Customer safety is a responsibility of any company that provide a public service. The Court of Appeal heard a case relating to an accident on a railway and deemed that safety standards should be reasonable and attainable.

Compensation Awarded For Flooded Business

If your neighbours actions cause your business to be disadvantaged as in the following case of a funeral directors whose business was flooded several times in the previous six years, due to water diversion on their neighbour's land next door, you may be entitled to compensation.

Compensation Paid Out For Filmed Eviction On Television

We live in a society where freedom of speech is important to the media which it believes enables it to report events that could be regarded as in the public interest, however should that override a person’s right to privacy?

Why Use Seatons?

  • Practical sensible help and information
  • Fixed, competitive and affordable prices
  • We care about you and fight for you
  • Regulated by the Solicitors Regulation Authority
  • We can help resolve your issue quickly & easily

COVID-19 Information

We would like to reassure our client’s that it is business as usual and as a firm we intend on supporting our clients through this difficult time. Our priority is to be able to progress client matters whilst protecting both staff and clients. As a precautionary measure to limit the risk to everyone our preferred communication is by telephone and/or email and/or post. Given the government announcement we may take a little longer to respond to enquiries and deal with matters. Please bear with us in these unprecedented times.