The second stage of our insolvency law process for individuals and sole traders involves us issuing a bankruptcy petition.
WHAT IS A BANKRUPTCY PETITION?
A bankruptcy petition is a formal, written document that is filed at court in order to petition for an individual or a sole trader to be made bankrupt.
HOW IS A BANKRUPTCY PETITION DIFFERENT TO A WINDING UP PETITION?
A bankruptcy petition is different to a winding up petition in that it relates to an individual or sole trader that is insolvent, as opposed to a partnership or a limited company.
WHAT INFORMATION SHOULD BE INCLUDED IN A BANKRUPTCY PETITION?
A bankruptcy petition must be in a prescribed form. Pursuant to Rule 10.7(1) of The Insolvency (England and Wales) Rules 2016, a bankruptcy petition must include the following information:
- The name and postal address of the petitioning creditor.
- Where the petitioning creditor is represented by a solicitor, the name, postal address and telephone number of the solicitor.
- That the petitioning creditor requests that the court make a bankruptcy order against the debtor.
- Whether: (a) the debtor’s centre of main interests is within a member state, (b) the debtor’s centre of main interests is not within a member state or (c) the debtor carries on business as an Article 12 undertaking.
- Whether: (a) the debtor is resident in England and Wales or (b) the debtor is not resident in England and Wales.
- Whether the petition is presented to: (a) the High Court, (b) the County Court at Central London 0r (c) a specified hearing centre and (d) the reasons why the court or hearing centre to which the petition is presented is the correct court or hearing centre under Rule 10.11.
Under Rule 10.7(2), if the petition is based on a statutory demand and more than 4 months have elapsed between the service of the demand and the presentation of the petition, the petition must explain the reasons for the delay.
The petition must also contain a blank box for the court to complete with the details of the venue for the hearing of the petition.
A copy of the relevant form can be found at www.gov.uk/apply-to-bankrupt-someone.
Where appropriate, we will also add statutory late payment compensation to the debt you are owed, pursuant to the Late Payment of Commercial Debts Regulations 2002, as amended by the Late Payment of Commercial Debts Regulations 2013.
HOW DO YOU SERVE A BANKRUPTCY PETITION?
A bankruptcy petition must be served on a debtor. In practice, this means that it must be delivered by a process server, who is a professional engaged in the business of bringing legal documents to the attention of a litigant. Rule 10.14(1) of The Insolvency (England and Wales) Rules 2016 states “The petitioner must serve the petition on the debtor in accordance with Schedule 4 (Service of documents).
DO I NEED A SOLICITOR TO PRESENT A BANKRUPTCY PETITION?
No. However, a solicitor will be able to advise you if a bankruptcy petition is appropriate, draft it on your behalf and arrange for it to be served on the individual or sole trader that owes you money.
HOW MUCH DOES IT COST TO PRESENT A BANKRUPTCY PETITION?
For a fixed fee of £500.00 plus VAT, we will issue a bankruptcy petition against the individual or sole trader that owes you money. You will also have to pay a number of disbursements including a court fee of £280.00, the Official Receiver’s deposit of £990.00, a process server fee of £100.00 plus VAT and an advocate fee of £100.00 plus VAT.
HOW DO I INSTRUCT YOU TO PRESENT A BANKRUPTCY PETITION?
We do not require you to complete a form to instruct us to issue a bankruptcy petition. We will gather together all of the information we need at the statutory demand stage of the insolvency process.
WHAT WILL HAPPEN AFTER I INSTRUCT YOU TO PRESENT A BANKRUPTCY PETITION?
We will send you a copy of the bankruptcy petition and notify you of the time and date it has been listed for hearing. We will ensure that all formalities are complied with in the build up to the hearing and if your debtor contacts us, we will let you know immediately if:
- They admit the debt and have sent us payment.
- They admit the debt and have not sent us payment.
- They admit part of the debt and have sent us payment.
- They admit part of the debt and have not sent us payment.
- They admit the statutory late payment compensation and have sent us payment.
- They admit the statutory late payment compensation and have not sent us payment.
- They have requested copy documents.
- They dispute the debt and have filed a debtor’s notice of opposition to the petition.
- They dispute the debt but have not filed a debtor’s notice of opposition to the petition.
- They dispute the statutory late payment compensation.
If the individual or sole trader that owes you money fails to respond to our bankruptcy petition, we will ask the court to make a bankruptcy order.
Please note: to access our services, you will need to open an account. You can do this by completing the form on the open an account page of our website. On receipt of your application, we will set you up as a debt recovery client and then contact you to explain what will happen next. Alternatively, for general enquiries, please contact us. If you would like to speak to one of our advisors, please call: 0151 650 6908. We very much look forward to working with you.