Bankruptcy court

Which bankruptcy court should you attend?

The bankruptcy court that you should attend will depend on your circumstances. If you are petitioning for your own bankruptcy then you will usually have to go to the county court where you have lived or carried on business for the longest period in the past six months. For example, if in the last six months you:

• Spent 2 months living in Liverpool
• Spent 4 months carrying on in business in Manchester

Then the Bankruptcy court that you should attend will be located in Manchester.

If you have lived or carried on in business in the London insolvency district for the greater part of the previous six months before you petition then you should attend the High court in London.

If you would like to check which court you should be attending you may find the HMCS court finder useful.

Before you attend court

You may wish to consider the following practical steps before you attend the bankruptcy court.

• Make an appointment during busy times
• Ensure that your forms are completed as accurately as they can be. They will be checked.
• Have the appropriate court fees. Petitioning for bankruptcy is not free.
• Make sure that you have received advice and you know what the consequences of bankruptcy will be for you. Once the bankruptcy order has been made by the court it may be too late to go back.
• Ensure you know what will happen to your bank account, you still need to pay your bills. See the bank accounts for bankrupts page for more information.

Bankruptcy Court Fees

As mentioned above there will be court fees to pay. Unfortunately the bankruptcy process can be very expensive though you will only be required to pay a small fee. For more information go to the filing bankruptcy page. It will explain what bankruptcy will cost in the UK in 2011.

What happens at the bankruptcy court hearing?

At the hearing the judge will want to know that you have sought advice. If you meet the grounds for bankruptcy (unable to repay your debts) then usually the bankruptcy order will be made. However, there are other outcomes to be aware of.

• Your petition may be dismissed if you do not meet the grounds
• The bankruptcy court may appoint an insolvency practitioner to investigate and report to the court on the feasibility of an IVA.

The court will not be able to make the bankruptcy order where all of the following conditions are met:

• Your debts are below the small bankruptcies level (currently £40,000),
• the value your estate would be greater than or equal to a specified minimum amount (currently £4,000),
• in the previous 5 years you have neither been adjudged bankrupt nor made a composition with your creditors in satisfaction of your debts or a scheme of arrangement of your affairs, and
• that it would be appropriate to appoint an insolvency practitioner to prepare a report presenting the feasibility of an individual voluntary arrangement to the court.

The report will take into account your willingness to enter an IVA and if the report does not favour the IVA proceeding then the court will make the bankruptcy order.

What happens after court?

If the bankruptcy order has been made then the court will send two sealed copies of the bankruptcy order to the Official Receiver. One copy will be forwarded to yourself, though you may be given it at court.

Further to this the Chief Land Registrar will be notified of the bankruptcy order made against you for registration in the register of writs and order affecting land. The effect of this is that anyone, for example a prospective buyer, conducting a land registry search will see than a bankruptcy order has been made against you.

The official Receiver will also advertise your bankruptcy. It will be advertised in the London Gazette and in such local paper as the Official receiver sees fit.

For more information visit the Official receiver page.

What is it like at the bankruptcy court?

Many people worry about going to court to file for bankruptcy. If you meet the grounds for bankruptcy and there is nothing out of the ordinary then you may not see the judge. It will usually turn out to be a simple paper stamping exercise.

Please treat bankruptcy with the seriousness it deserves though. It can have a long lasting impact on your life.