Being made bankrupt
The majority of individual bankrupts are under the age of 30. But how exactly are you made bankrupt and who decides that it will happen?
Bankruptcy orders
A court makes a bankruptcy order only after a bankruptcy petition has been presented. You can present the petition yourself (known as a debtor's petition) or it can be presented by one or more creditors who are owed an unsecured amount of £750 or more by you (known as creditor's petition).
A bankruptcy order can still be made even if you refuse to acknowledge the proceedings or refuse to agree to them. This makes it wise to co-operate fully once the bankruptcy proceedings have begun. If you dispute the creditor's claim, you should try and reach a settlement before the bankruptcy petition is due to be heard. Trying to do so after the bankruptcy order is made is difficult and expensive.
Where is the bankruptcy order made?
Bankruptcy petitions are usually presented at the High Court in London or a county court near to where you live. A petition can be presented against you even if you are not present in England or Wales at that time. This happens when:
- You normally live in, or within the previous three years have had residential or business connections with, England and Wales
- You owe money or income tax for any business you carried on in England and Wales before you left the country
If you want to make yourself bankrupt, you should contact a county court. Staff at the county court will tell you the name, address and telephone number of the county court where you should present your petition.
You will have to pay £150 as a court fee, together with £360 towards the cost of the administration of your bankruptcy by the Official Receiver (although these fees can be waived if you meet certain conditions).
Most government departments start bankruptcy proceedings in the High Court in London. If you did not trade or do not live in the London area, your case will usually be transferred to the appropriate local county court and dealt with by the local Official Receiver.
Once the bankruptcy order has been made, it is advertised in The London Gazette (an official publication which contains legal notices) and possibly in a local or national newspaper.
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