Can my bankruptcy be annulled?
In short, yes. Even if a bankruptcy order has been made, the court retains the power to annul (cancel) such an order. If your bankruptcy order is annulled you are no longer bankrupt and it releases you from the restrictions placed on you by insolvency law.
You can even apply to have your bankruptcy order annulled after you have been discharged from bankruptcy.
Here, we look at when you can apply for an annulment and at the effects of having your bankruptcy order annulled.
- When can I apply for my bankruptcy to be annulled?
You can apply for an annulment at any time for one of three reasons:
- The bankruptcy order should not have been made – for example if the proper procedures to obtain the order were not followed, or that the debt to the creditor issuing the petition had been paid in full prior to the bankruptcy order being made. For example, you may have moved home and had not received any notice of the bankruptcy hearing. Or, you may have been in hospital or abroad for an extended period and had no knowledge of the bankruptcy proceedings
- Your debts have been paid to the satisfaction of the court – you may have to prove to the court that you have paid the debts, particularly if the debt was settled through a third party such as a solicitor
- An Individual Voluntary Arrangement (IVA) has been arranged – if your creditors have agreed to an IVA you can then apply to the court to have your bankruptcy order annulled. A proposal for an IVA will normally provide that a bankruptcy order be annulled in these circumstances
- What happens on the annulment of my bankruptcy order?
Once your bankruptcy order is annulled, you will revert to your pre-bankruptcy status. While disposals of your property by the Official Receiver and the trustee will remain valid and will not be reversed, any other assets will be returned. However, you will remain liable for any other debts you have that were not repaid in the bankruptcy.
If your bankruptcy order is cancelled because the debts have been paid or a voluntary arrangement has been approved, the record of the order will be removed from the Insolvency Service’s Individual Insolvency Register two years after the date of cancellation. If your bankruptcy order has been annulled because it should never have been made, the record will be removed from the register immediately.
In addition, the court will ordinarily include provision for the cancellation of any registration of your bankruptcy petition at the Land Charges Department of HM Land Registry. You will normally have to write to the Land Registry to ensure this happens.
You may have to provide information to credit reference agencies in order that they can amend your record. This is because the Official Receiver does not send any form of notice to these agencies. The agencies pick up information from other sources such as advertisements of bankruptcies in newspapers and the Register of County Court Judgments. If no advertisement of the annulment of your bankruptcy order is made, they will only be able to correct your record if you write to them.