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When Can You be Made Bankrupt?

Even though creditors can start the bankruptcy process for several different reasons, the most likely occurs when individuals are unable to pay off debts.

This help guide explains what happens if you are being made bankrupt and the basic steps needed for opposing a bankruptcy petition.

What to Do if You’re Being Made Bankrupt?

Creditors can file for bankruptcy to deal with debts that their debtors cannot pay (if the amount is greater than the threshold).

As a result, you could find yourself being made bankrupt, if you (any):

  • Break the terms in an Individual Voluntary Arrangement (IVA).
  • Fail to pay a debt and the amount owing is £5,000 (or more).
  • Give false information for an Individual Voluntary Arrangement.

Note: Another guide explains more about applying to become bankrupt, such as when you choose ‘voluntarily’ to declare yourself as a bankrupt individual.

Before You Can Be Made Bankrupt

UK law forces creditors (people owed money) to try other legal methods of recovering a debt, before they apply to make someone bankrupt. In most cases, this means they will make and serve a statutory demand or a court judgement.

You can get free guidance from the Citizen’s Advice helpline or National Debtline about when you can be made bankrupt and what to do if you disagree with it (e.g. how to challenge a statutory demand).

National Debtline
Telephone: 0808 808 4000
Fax: 0121 410 6230
Monday to Friday: 9am to 8pm
Saturday: 9:30am to 1pm

As a rule, being made bankrupt means an official receiver (or insolvency practitioner) can sell certain assets that you own to off pay your debts, and:

Important: The main section contains more advice and information about making a court claim, debt recovery, and registering for insolvency or bankruptcy.

Opposing a Bankruptcy Petition

You can dispute a bankruptcy petition (e.g. oppose it) if you disagree with the information or accusations stated in the document. Even though it is free to apply, you must start the process at least five (5) days before the date of your bankruptcy hearing.

Debtors should use Form Bank 6 to give notice of opposition to a bankruptcy order. Fill in the form and send it to the court that sent you the petition.

You may need to submit the form using the usual postal methods unless you can submit it online to one of these courts:

  • Admiralty and Commercial Court
  • Chancery Division
  • Companies Court
  • High Court (including Bankruptcy Court)
  • London Mercantile Court
  • Rolls Building

Note: Another section explains how to cancel a bankruptcy and stop it from being advertised ‘publicly’. In some cases, it may be best to hire a solicitor, but you might also be eligible for legal aid.

Filing for Bankruptcy in Scotland or Northern Ireland

The Accountant in Bankruptcy handles bankruptcy and insolvency cases in Scotland. But, you would need to get in touch with the Insolvency Service if you are living in Northern Ireland.

Bankruptcy Help Guides

Being Made Bankrupt: Help Guide for United Kingdom