Bankruptcy petitions

Duncan Lewis Litigation Solicitors – Bankruptcy petitions

 

Bankruptcy petitions can be used by a creditor in cases where a debtor owes more than £5,000 and cannot repay the debt.

 

In cases where a debtor has breached the terms of an IVA (Individual Voluntary Arrangement) by not paying the agreed monthly amount under the IVA, the IVA supervisor may also apply to the court for a bankruptcy petition.

 

It is usual to apply to the court for a bankruptcy petition at a later stage of the debt recovery process, if a debtor has not responded to correspondence or a statutory demand for payment of the debt – or has failed to negotiate over repaying the debt, perhaps in instalments or as a full and final settlement.

 

Because bankruptcy can have a serious effect on a debtor – including their future chances of employment and their family – a bankruptcy petition should not be used lightly as a debt recovery solution and negotiation can often be the best way of dealing with a debtor who persistently fails to repay monies owed.

 

A bankruptcy petition involves proving to the court that a debtor owes the creditor more than £5,000 and is unable to pay.

 

If the bankruptcy petition is granted, a debtor’s assets can be seized and sold to repay the monies owed.

 

A bankruptcy petition can only be use in cases where the debtor has an unsecured debt and the debt is undisputed. It is advisable to obtain a court judgment against a debtor before filing a bankruptcy petition, otherwise costly court action may ensue if the debtor challenges the bankruptcy petition and wins, leaving the creditor liable for the opponent’s legal costs.

 

Taking legal advice on the debtor’s financial position is also essential to the success of any bankruptcy petition, including searches for any other bankruptcy petitions filed at court against a debtor within the previous 18 months, which is an essential process in filing for a bankruptcy petition against a debtor.

 

Any legal costs are usually recoverable if the creditor is successful in applying for a bankruptcy petition.

 

Duncan Lewis civil litigation solicitors can advise at any stage of a debt recovery matter – and have considerable expertise in creditors’ bankruptcy petitions and defending bankruptcy petitions for debtors, including advising on mediation services as an alternative to bankruptcy petitions.

 

For expert legal advice on debt recovery and Bankruptcy Petitions, call Duncan Lewis Civil Litigation Solicitors on 0333 772 0409.

 


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