Bankruptcy (England)

Before being able to proceed with bankrupting an individual, the debt must exceed £5,000 and apparent insolvency established within the preceding four months. Apparent insolvency is established on the expiry of a statutory demand or an unsatisfied judgement in execution. In essence, you need to be able to show the court the debtor is unable to pay his debts or has no reasonable prospect of paying them as they fall due.

Once the bankruptcy order is made on the creditor’s petition, an Official Receiver is appointed as the receiver and manager of the bankrupt’s estate. The following then happens:

• Control of the debtor’s estate passes to the Official Receiver.
• Legal proceedings may only be commenced against the debtor with leave from the court. Any existing proceedings can be stayed.
• Enforcement/execution completed post-commencement (of the Petition) is now void.
• A landlord may only levy a distress post-bankruptcy order in relation to pre-bankruptcy order arrears. This is further restricted to 6 months rent accrued pre-bankruptcy.
• The debtor must not obtain credit in excess of £500 without disclosing bankruptcy status.
• The Debtor may only trade in his bankruptcy name or he must disclose the name in which he was adjudged bankrupt.
• The bankrupt may be precluded from certain professional appointments i.e. solicitor, accountant.
• partnerships are automatically dissolved.

There are a number of bankruptcy offences that can be committed by the bankrupt (some of them retrospective). These include:

• Non-disclosure of property and/or failure to inform of a disposal which could have be set aside
• Concealment of property (heritable, moveable or otherwise)
• Failure to deliver up books, papers and other records
• If bankrupt makes any false statement.

The content of this website is for general information only and should not be relied upon. It is not intended to be construed as legal advice and should not be treated as a substitute for specific advice.