Bankruptcy relates to the insolvency of individuals and is only available if your debt is over £5,000.
The first step towards obtaining a bankruptcy order against a debtor is usually to serve a statutory demand on the debtor although service of a statutory demand is not necessary if execution of a judgment debt is returned unsatisfied.
Bankruptcy proceedings may be commenced if payment is not received within 21 days of service of the statutory demand or a satisfactory offer to settle has not been received. Service of the statutory demand must usually be by hand. The debtor has 18 days from service of the statutory demand to lodge an application to set it aside if he or she disputes the statutory demand.
In the absence of an application to set aside being made a bankruptcy petition may be issued. The bankruptcy petition will be issued by the court and be stamped with a hearing date which is usually about 6 weeks from the date of issue of the petition. The court sealed bankruptcy petition is then served personally on the debtor.
At the hearing of the bankruptcy petition the court will decide whether to make a bankruptcy order.
Bankruptcy should not normally be considered where there is any hint of a dispute. If there is a dispute, it is advisable to obtain a judgment first (please see the issue a claim and judgment sections).
For further details on costs please contact our debt recovery team on 01616 966 229.