How do I apply for bankruptcy?

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The decision to begin a petition for bankruptcy is certainly no easy one, with serious repercussions that must be considered. As such it’s good to know that if and when such steps are necessary there’s plenty of help available. So let’s answer the question “How do I apply for bankruptcy?” ..

In the initial stages it’s vital to seek independent advice on your application for bankruptcy. There are numerous organisations that can look at your individual circumstances, offer information on filing the correct paperwork or even suggest alternatives to relieving your debt crisis. The process is always easier with some prior knowledge, mind, and there are several steps that must be taken in any instance.

First of all it’s important to understand the criteria for bankruptcy. Currently, you must owe out a minimum of £750 to one or more individuals or companies. Further to this, the total assets available to you- including savings and property- must be less than the total amount of debt for your petition to be accepted.

If this is the case then the most important next step is to get organised, by making sure all financial documents are in order. This will make the procedure far quicker for everyone involved. Only when bank statements, tax notices and similar have been collated is it time to file papers, as you will need this information to complete the paperwork required.

In order to initiate an application you will need to download and return ‘the petition’; Insolvency Rules 1986 form 6.27. Herein include a request to the court to be made bankrupt, and explain the reasons why this situation has arisen. You will also be required to complete and return ‘the statement of affairs’, Insolvency Rules 1986 form 6.28, which can be accessed via the same website. This takes the form of a complete list of all creditors, along with their names and addresses, and a ‘Statement of Truth’ testifying all the details are honest and accurate.

Both have to be submitted to your nearest court, and there will be a fee to pay. In England & Wales this is currently set at £175 for the court, and £525 for the official receiver (who will be assigned to oversee the distribution of your estate). In Northern Ireland the costs are £115 for court, £345 to the official receiver, and £7 for solicitor’s charges. All payments must be received prior to a judgement being made on your application.

 This is non-refundable, so even in the event of an unsuccessful petition the costs will still be due, which means you really need to be sure the application will be accepted prior to initiating proceedings. In some circumstances an individual may be eligible for a discount, for example if they have been made redundant, have a low income or receive certain benefits, again highlighting the importance of seeking expert advice before even considering to file for bankruptcy.