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Bankruptcy and debt recovery

Someone who owes you money is known as a ‘debtor’. Making them bankrupt means that any assets (property, shares etc) they own are sold or used to repay their creditors (people they owe money to). However, you might not get all or any of the money you are owed. For example, if there aren’t enough assets to sell.

To make someone bankrupt you need to petition (apply to) the court. Not all courts deal with bankruptcy cases and you should get a solicitor to act for you when you go to court.

Get advice on recovering a debt

You should get advice about making someone bankrupt as there might be other ways to recover the debt. For example, agreeing a monthly repayment plan with the debtor.

Get free advice about how best to recover a debt from your local Citizens Advice Bureau. A solicitor or financial adviser can also help you, but they may charge a fee.

• Recover debts owed to you - a guide

• Find your local Citizens Advice Bureau

• Find a solicitor or advice agency

What you have to prove to make someone bankrupt

To make someone bankrupt you have to prove that they owe you, or one or more other creditors, £750 or more. You can prove this in two ways.

Option one: an unsatisfied statutory demand. This is a written request for payment that has been formally given to the debtor. It is unsatisfied if the debtor hasn’t paid or agreed to pay the debt listed in the demand.

Option two: an unsatisfied execution of judgment. This is where the court gives permission for you to recover the debts. It is unsatisfied if the you were not able to recover the debt in full. For example, bailiffs couldn’t take enough assets to cover the debt.

• Use a statutory demand to recover a debt

• Bailiffs and debt collectors

Bankruptcy forms you need to complete

Depending how you prove the debt, you will need to complete the following forms:

• Creditor’s petition, form 6.7 – use this form if you have issued a statutory demand and it has not been paid
  
• Creditor’s petition, form 6.9 – use this form if you have an unsatisfied execution of judgment
  
• Petition statement of truth, form 6.13A – confirms the details in your petition are true and correct
  
• Statutory demand statement of truth, form 6.11 – confirms that a statutory demand was sent

You can get the forms from The Insolvency Service website or buy them from a legal stationers. For help filling in the forms, contact your local Citizens Advice Bureau. A solicitor can help you, but they might charge a fee.

• Get the bankruptcy forms from The Insolvency Service website Opens new window

• Find your local Citizens Advice Bureau

• Find a solicitor or advice agency

Fees you need to pay to make someone bankrupt

When your petition is filed (presented) at the court you will have to pay:

• £220 to cover court costs
  
• £700 to cover the costs of administering the bankruptcy, known as the ‘petition deposit’

The petition deposit might be repaid to you if enough money is raised from the sale of the debtor’s assets.

You should get a solicitor for when your case goes to court. Your solicitor can advise you about their fees. They can also advise you about what you may have to pay if you lose your case, for example, the debtor’s legal costs.

Find your nearest bankruptcy court

You will need to file (present) your bankruptcy forms at the court. Not all courts deal with bankruptcy cases. Your solicitor or county court can advise you which bankruptcy court you need to use.

• Find your nearest bankruptcy court

Steps to make someone bankrupt

You should get a professional to help you with the following five steps. You can get the forms yo need from any legal stationer or speak to a legal advisor.

Step one: a copy of your petition must be ‘served’ on the debtor. This is a formal way of bringing the petition to the attention of the debtor. Your solicitor or local Citizens Advice Bureau can advise you on how to serve a petition.

Step two: you need to confirm that the debtor has a copy of the petition by completing one of the following forms:

• Statement of truth, form 6.17A - petition served on debtor
  
• Statement of truth, form 6.18A - petition sent to debtor (not ‘served’) – for example, if the court gave you permission to send it to the debtor some other way

Step three: the court will set a date to hear your case at least 14 days after you served the petition. The debtor has up to five working days before the hearing date to oppose the petition. You should get legal advice if your petition is opposed by the debtor.

Step four: prepare a list of any creditors who are also owed money by the debtor as they may have to appear before the court. You should use form 6.21 to list these people.

Step five: at your hearing the court can:

• make a bankruptcy order, this means that the debtor is now bankrupt
  
• stay (delay or stop) the proceedings – for example, ask for more information
  
• dismiss (reject) your petition
  
• adjourn (postpone) the hearing

• Find your local Citizens Advice Bureau

• Find a solicitor or advice agency

What happens after someone is made bankrupt

A trustee will be appointed to collect and sell the debtor’s assets and make any payments to their creditors. You should get advice about if and when your money will be repaid.

Bankruptcy usually lasts 12 months and in that time the bankrupt must follow a set of rules called the bankruptcy restrictions. The Official Receiver will investigate the affairs of the bankrupt to see if these restrictions should continue beyond the period of their bankruptcy.

If a bankruptcy order is not made

You should get legal advice if the person you were trying to make bankrupt or someone else:

• applies to the court for the bankruptcy order to be withdrawn
  
• applies to the court for the bankruptcy order to be annulled (cancelled)
  
• appeals against the bankruptcy order

Useful contacts

• Money, tax and benefits contacts