How to Make a Person Bankrupt
Call 0207 504 1300 now
Call 0207 504 1300 now for advice on how to make an individual Bankrupt
Traditionally, there's a stigma attached to Bankruptcy. Consequently, forcing a debtor into Bankruptcy may be a viable option if you're having trouble collecting an outstanding debt. A Creditor's Bankruptcy Petition is an application to the court to seize and sell the assets of a person with debts of £5,000 or more.
Before presenting a debtor with a Bankruptcy Petition, you (the creditor) must 1st serve a Statutory Demand. This is a formal document demanding payment of an outstanding debt within 21 days. If the debtor neither pays nor reaches an agreement to pay, you can present a Bankruptcy Petition, costing £1,270 including the court fee.
The petition should be filed in the county court nearest to where the debtor resides. A court may make a Bankruptcy Order if they decide the debtor is insolvent. The procedure is almost identical to a Debtor's Bankruptcy Petition. The debtor is summoned by the Official Receiver for an examination, and an insolvency practitioner (trustee) may be appointed.
Bankruptcy can affect a person's credit rating for up to 6 years, and they'll be unable to obtain credit of more than £250 without disclosing their Bankruptcy. Bankrupts still have to pay court fines, student loans and child maintenance, and the trustee may sell some of their most valuable assets to pay creditors.
Furthermore, after the respondent (debtor) has been Bankrupt for 1 year, the trustee can try to seize and sell their home if there's significant equity in the property.
In Bankruptcy, the function of a trustee (insolvency practitioner) is comparable to that of an administrator or liquidator in the insolvency of a limited company. Irrespective of the procedure, the insolvency practitioner's main task is to realise assets to pay creditors. Aside from the tools of the debtor's trade, absolutely everything else is up for grabs. Creditors are free to remove and replace the trustee with a licensed insolvency practitioner of their choice.
IPOs and IPAs
If a trustee believes the debtor has surplus income, they can ask the court to make the debtor pay up to 36 monthly payments into the Bankruptcy Estate via an Income Payments Order (IPO). Alternatively, you can make these payments voluntarily through an Income Payment Agreement (IPA). The fee for both is approximately £150, which will be taken out of your 1st payment.
BRUs and BROs
Additionally, Bankrupts who accept accusations of misconduct usually agree to sign a Bankruptcy Restriction Undertaking (BRU), which extends the Bankruptcy conditions for an additional 3 or 4 years. But if a Bankrupt challenges allegations of misconduct, their trustee and creditors may apply for a Bankruptcy Restriction Order (BRO), which can extend Bankruptcy conditions for up to 15 years.
I&L can help you recover payments from overdue debts, and advise how and when to make a creditor Bankrupt. Call 020 7504 1300 now for free and confidential advice…