How does a creditor apply for bankruptcy?
In England, Wales or Northern Ireland
The people you owe can make you bankrupt if you owe them more than £5,000.
If you owe two or more people, they can 'club together' if the amounts you owe are under the £5,000 limit. This is rare.
Let's say you have two debts of £3,000. The people you owe can apply for your bankruptcy together, making your total debt over £5,000.
There are four ways the people you owe can petition for your bankruptcy:
The process varies depending on which country you live in.
- After you get a statutory demand (England, Wales and Northern Ireland)
This letter gives you 21 days to:
- Pay the debt or
- Come to a payment agreement
The people you owe can apply or ‘petition’ for your bankruptcy if you do not.
This is the most common way the people you owe apply for your bankruptcy. Contact us quickly if you get a statutory demand.
- Your individual voluntary arrangement (IVA) failed because you missed payments (England, Wales and Northern Ireland)
The insolvency practitioner dealing with your IVA can petition for your bankruptcy if the people you owe agree to it.
This is rare.
- After a County Court judgment (CCJ) (England and Wales only)
Enforcement agents come to your home after a CCJ.
They may apply for your bankruptcy if they find you do not have enough to sell to pay off the debt
This is rare.
- A certificate of unenforceability for the debt (Northern Ireland only)
The Enforcement of Judgments Office (EJO) grants a certificate of unenforceability.
The people you owe petition for your bankruptcy after this.
This is rare.