How can I, as a creditor, petition for a debtor's bankruptcy?
Bankruptcy is an order which is petitioned for in court, and which declares an individual no longer responsible for the discharge of their personal debts. A bankruptcy petition can be filed by the debtor themselves if they no longer feel able to deal with their creditors. As a creditor, you can also file for a bankruptcy petition against a debtor, providing their debt to you exceeds £750. If the debt is smaller, you can only petition in combination with another creditor, who is owed a sufficient sum so that the total combined debt exceeds £750.
Bankruptcy is a serious matter. If a bankruptcy order is granted, the debtor ceases to retain control over their financial affairs, which are passed over to a trustee known as the Official Receiver. The Official Receiver is normally an experienced solicitor or insolvency practitioner who will administer the debtors affairs for the duration of the bankruptcy order. Bankruptcy orders usually last around 12 months.
The award of a bankruptcy order means that as a creditor you are no longer able to pursue the debtor directly for repayment. Any legal actions you have outstanding against the debtor must be dropped and any communications must be made with the Official Receiver. The Official Receiver is granted the power to realise any assets that the debtor possesses. This can include selling their home and car, luxury possessions and even closing down their business. Once all assets are realised, creditors are paid off in turn. At the end of the bankruptcy period, all outstanding debts are considered written off.
If you are owed more than £750 you should consult your solicitor for advice on making a creditors petition for bankruptcy. You must demonstrate that you have exhausted all normal routes to gaining repayment, including a final written or statutory demand. You may commence your petition 18 days following a statutory demand, or 21 days from a final written demand.
If you would like to obtain legal advice on petitioning for a debtor's bankruptcy, Caven can put you in touch with a local specialist solicitor free of charge. So, if you have any questions or would like our help in finding local solicitors please call us on 08001 221 2299 or complete the web-form above.
- Last Updated on 29/11/2012
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