Where is the Bankruptcy order made?

Bankruptcy petitions are usually presented at a County Court in the area in which you live. A petition can be made against you even if you are not present in the area at the time, provided you normally live in or have recent residential or business connection in the area of the petition. Anyone can apply to the court to and become bankrupt. Only the Court can make you bankrupt and not all Courts handle bankruptcies. There are fees and procedures to follow to apply for bankruptcy. You have to hand over any assets or value in financial interests to a “trustee” or appointed person of the Court to manage during the process of bankruptcy. The bankruptcy order determines the level, the length and the proceedings of the bankruptcy. A supervising agent bound by an IVA (Individual Voluntary Arrangement) can recommend that a bankruptcy order be made. Creditors can also apply directly to the Court for a bankruptcy order against you.

If you want to make yourself bankrupt then you must contact the local County Court that deals with bankruptcy. Things tend to run more smoothly if you seek advice from a professional in this area. The bankruptcy order is actually made at your local County Court in an area in which you have lived for the greater part of 6 months. You may find the address and phone number for your local County Court listed under “courts”, in the phone book where you will look for “Civil Courts – County Courts” and not “Magistrate Courts. You may also find the information on the internet. The Court services website is http://www.courtservice.gov.uk they have listed an index of County Courts that will show you the area each County Court has jurisdiction to hear a bankruptcy case.
When you are in an Individual Voluntary Arrangement and you are unable to uphold your agreement then you may still apply for bankruptcy. The supervising agent in the IVA may also require you to apply for bankruptcy if the agreement is not being met. You are entitled by law to cancel your Individual Voluntary Arrangement.
The other possibility for bankruptcy is if a creditor chooses to have you placed in bankruptcy. They can apply to the Court and the Court can make a bankruptcy order. You are expected to fully co-operate in this and any of the decisions of the Court. This is not typical of a creditor. They normally try to collect the debts and are sometimes willing to work out an agreement with the borrower outside of Court. If an agreement cannot be made this might be the final resort for a creditor to collect the money owed to them.

If you would need an interpreter, the Court will not be able to help you find one. You will have to provide your own interpreter at your own expense.
There are four possible outcomes of the Court at your initial hearing to file a bankruptcy order. If the Court feels they need more time to review your petition, or they need additional information before they can decide, they will delay the proceedings. This is considered a “stay” in proceedings. Perhaps an Administration Order would be more appropriate they might “dismiss” the petition altogether. This would be the decision of the Court if the debts are under a certain amount and can be settled. If this is the decision the creditors are not allowed to take action against you. All of your debts will be made into one payment that is made to the Court. The Court will then disburse the payments accordingly. Sometimes the Court thinks an Individual Voluntary Arrangement would be more appropriate; then they would appoint an Insolvency Practitioner.

This would only be the decision if your assets are more than the Court’s set amount, your unsecured debts are less than the Court’s set amount; and you have not been bankrupt or made an Individual Voluntary Arrangement in the previous five years. You can inform the Court if you do not wish to enter into such an arrangement. And the last possible outcome would be for the Court to make a bankruptcy order. You will be bankrupt the moment the order is made by the Court.

The fee paid for application to the Court for filing bankruptcy can sometimes be reimbursed if the bankruptcy order is not made. There are other fees and charges involved with filing bankruptcy. There are also fees applied to the other orders mentioned above. They vary according to the decision the Court makes in your situation. These are sometimes altered based on your income and possibility of causing more financial damage. It is best to seek advice from a professional for more information in your particular financial situation and what your outcome might be.

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