Bankruptcy – Insolvency Action Against an Individual

Insolvency action can be taken against debtors who are individuals, self-employed, sole traders, or partnerships. The debt must be of a value of more than £5000 and be undisputed.

The cost of taking bankruptcy proceedings against your debtor is around £2000 and so we would always discuss options with you and give you our opinion on whether taking this action would be likely to lead to payment of the debt. Of course, it may be a matter of principle for you and we totally understand why you would decide to proceed.

If you did choose to go ahead then the following steps are taken:

  • Step One

    Searches are undertaken at the debtor’s local court and the Royal Courts of Justice to ensure that there are no prior Petitions pending against them.

  • Step Two

    If no Petitions are pending, then a Statutory Demand must be personally served on the debtor. This sets out the debt due and informs the debtor of the intention to begin Bankruptcy proceedings if the debt is not paid within 21 days.

    If the debtor wishes to dispute the amount claimed, they must file an application to set aside the Statutory Demand at court within 18 days of service.

  • Step Three

    If the debt is not paid, or disputed, a Bankruptcy Petition is personally served on the debtor and we would appoint a local agent to attend the court hearing on your behalf.

    If there is no response from the debtor to the Bankruptcy Petition, and no payment made, a Bankruptcy Order is usually made by the court at the hearing and a ‘Trustee In Bankruptcy’ is appointed to deal with the debtor’s affairs.

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