MAKING YOURSELF BANKRUPT
Is bankruptcy the right option for me?
When trying to decide if bankruptcy is the best option for you, you may wish to make use of the diagnostic tool at the following link: Alternatives to Bankruptcy
How do I petition for my own bankruptcy?
If you decide that bankruptcy is the best option available to you there are a number of forms that you need to complete:-
- The petition (Insolvency Rules (NI) 1991 form 6.30) - this form is your request to the Court for you to be made bankrupt and includes the reasons for your request.
- The statement of affairs (Insolvency Rules (NI) 1991 form 6.31) - this form asks you to list all your assets (anything that belongs to you that may be used to pay your debts) and all your debts, including the names and addresses of the creditors and the amount you owe each one. When you have completed this form you will be asked to make a sworn statement as to its accuracy and completeness before an officer of the court or a solicitor. It is therefore vital that you make a full disclosure of your assets and debts. You can get these forms, free of charge, from the Bankruptcy and Chancery Division of the High Court in Belfast.
You can now complete the statement of affairs (form 6.31) online. To access please click here
If you are, or were, running a business in partnership (even if there is no formal partnership agreement) and all the partners want to be made bankrupt, you will need different petition and statement of affairs forms. These are available from the High Court. You may find it useful to access our guidance leaflet How to wind-up a partnership
You should complete the petition and statement of affairs forms in capital letters using black ink. While Court Officials can advise you on procedures, give you the forms you need and help you fill them in, they cannot give you legal advice.
How much will it cost to make myself bankrupt
There are three fees that you will have to pay when you take your petition and statement of affairs to the Court:
- The deposit of £345 towards the costs of administering your bankruptcy and is paid to the Department of Enterprise, Trade and Investment. The deposit is payable in all cases and payment may be made in cash or postal orders, or by a cheque from a building society, bank or solicitor. Cheques should be made payable to the "Official Receiver". Personal cheques will not be accepted. To pay your deposit on line, please click ·here.
- The court fee of £115. This fee may be paid in cash or by cheque or postal order made payable to "Supreme Court Fees Account" In some circumstances the court may waive this fee; for example, if you are on Income Support. If you are not sure whether you qualify for a reduction in the fee or whether you are exempt from paying the fee, court staff will be able to advise you.
- The fee payable to a solicitor before whom you swear the contents of your statement of affairs. You should expect to pay around £7 for this service.
If you are a married couple and you are both applying for bankruptcy, you will each have to pay separate fees. If you were in business as a partnership, each partner will have to pay separate fees, unless all the partners apply for a joint bankruptcy petition under the Insolvent Partnerships Order (Northern Ireland) 1995 (Form 16). Form 16 is available from the court. You may find it useful to access our guidance leaflet How to wind-up a partnership
To access our guidance leaflet "How to petition for my own bankruptcy" please click here
What will happen at Court?
The High Court will either hear your petition straight away or arrange a time for the court to consider it.
At the hearing the Court can do one of 4 things:
- Stay (delay) the proceedings - often because the court needs further information before it can decide whether to make a bankruptcy order.
- Dismiss the petition - perhaps because an administration order would be more appropriate.
- Appoint an insolvency practitioner - if the Court thinks an individual voluntary arrangement would be appropriate. This will only be possible if your assets are more than £4,000; your unsecured debts are less than £40,000; and you have not been bankrupt and have not made an individual voluntary arrangement in the previous 5 years. If you do not wish to enter into such an arrangement, you should inform the Court.
- Make a bankruptcy order.
Who will deal with my bankruptcy?
The Official Receiver, who is a civil servant in The Insolvency Service and an officer of the Court, will be responsible for administering your bankruptcy and protecting your assets from the date of the bankruptcy order.
He will act as your trustee in bankruptcy unless the Court appoints an insolvency practitioner to take this role. The trustee in bankruptcy is responsible for dealing with your debts incurred before the date of your bankruptcy. The Official Receiver must also report to the Court any matters which indicate that you may have committed criminal offences in connection with your bankruptcy.
Further information is available in the Insolvency Service guidance leaflet - 'What happens when you are interviewed by the OR?' (click here)
What are my duties as a bankrupt?
When a bankruptcy order has been made against you, you must do all the following things:
- Provide information about your financial affairs to the Official Receiver. This will usually be done by telephone or at an interview at the Official Receiver's Office. Do not wait for the Official Receiver to contact you - you should contact him as soon as possible once the bankruptcy order has been made.
- Collect and hand over your assets to the Official Receiver, with all your account books, records, bank statements, insurance policies and other papers relating to your assets and debts.
- Notify your trustee or the Official Receiver about any assets and increases in income you receive during your bankruptcy.
- Stop using your bank and building society accounts, credit cards and similar accounts straight away.
- Not get credit of £500 or more from any person without first telling them that you are a bankrupt.
- Not make payments direct to your creditors for money that you owed before the bankruptcy order was made (you should however continue to pay such things as rent or mortgage on your home or for current supplies of electricity or gas).
- If you do not co-operate with your trustee in bankruptcy, you could be arrested.
For more information, please click here
