Declaring yourself bankrupt

It is becoming increasingly common for individuals to declare themselves bankrupt as a way of resolving debts that they are unable to pay.

In order to declare yourself bankrupt, you first need to complete an application form. You then need to presented your application to the court. If accepted, you will be declared bankrupt on the same day. 

Where to start

• Choose the solution – Use the “Which way should I turn” form to get your FREE DEBT REPORT
• Ask the experts – use the Beat My Debt Forum
• Call us now – speak to one of our advisors in confidence to see if bankruptcy is right for you.

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STEP BY STEP GUIDE TO DECLARING YOURSELF BANKRUPT

It is possible to declare yourself bankrupt with no additional help from a solicitor or other professional person. However, it is advisable to get help when filling in your bankruptcy application form as this is complex and must be completed accurately. 

Step 1: Identify your local court

To declare bankruptcy, you will have to present your bankruptcy application documents (petition documents) in person at the County Court local to where you live. The local Court can be identified by searching on the government's Court Finder web site. A link to this site is give in the "Useful Links" box below.

If you live in London, you may have to present your documents at the High Court Royal Courts of Justice) located in the Strand.

Step 2: Get an application form

Telephone your local County Court (the number is available on the court finder website) and confirm that you are considering bankruptcy. Check whether you are speaking to the correct Court location based on your home address. This is important as you must present your Petition for Bankruptcy at the County Court local to your place of residence.

You should then ask the Court to post you the necessary application forms for Bankruptcy and associated information. You will need two documents, a bankruptcy petition document (known as form 6.27) and  statement of affairs document (known as form 6.28).

The Court will post blank copies of these documents to you free of charge. Alternatively, these forms can also be downloaded from the internet. If you wish, you can download these documents using the links in the "Useful Links" box below.

Step 3: Understand the fees payable

When you declare bankruptcy, you will have to pay a fee. This fee was increased in April 2010 to £600 per person.  The £600 is made up of a Court Fee of c£240 and a fee towards the cost of the administration of your bankruptcy of £360.

If you claim certain benefits such as income support, you may be exempt from the £240 Court Fee. When you are speaking to the Court, you should confirm the exact charge with them and whether you are eligible to apply for a discount.

Step 4: Confirm whether you need to book an appointment at the court

When you speak to the Court, you should ask whether you will need to make an appointment or whether they can just turn up at any time. Different County Courts have different procedures. If you need to book an appointment you may have to do so quite far in advance.

If you live in London and are planning to attend the High Court in the Strand, you will not need a prior appointment. You can just turn up on the day.

Step 5: Complete the application documents 

The bankruptcy Statement of Affairs forms are 30 pages in length. They need to be completed fully and correctly. This will normally take between 2-3 hours. Once completed, you should make a photocopy of the forms for future reference. Normally there will not be any facilities at the Court for you to do this.

Note: The Court is unable to give advice on completing your Bankruptcy application forms. If you feel that you require additional help with completing this form, please contact Deat My Debt.

Step 6: Present your completed application at court

Once you have completed your forms, you must take them, together with your Bankruptcy fee, in person to your local County Court. You should ensure that you arrive promptly for your appointment. If you have not been asked to make an appointment, then plan to arrive no later than 10.00 to ensure the process can be completed the same day.

Once at court the following will happen:

A Clerk of the Court will take your fee, ensure that your application forms are correctly completed and witness your signature on the Petition Document.

You will then meet privately with a District Judge. The Judge will ensure that you eligible for Bankruptcy (i.e. you are insolvent) and will determine whether bankruptcy is appropriate. If the Judge agrees with the Petition, they will declare you bankrupt the same day.

You will be asked to visit the Official Receiver. This will either be arranged for the same day or you will have to make an appointment at a future date.

Step 7: Meeting the Official Receiver

Once you have been declared Bankrupt by the District Judge, you will then have to meet with the Official Receiver (OR). The Official Receiver will study your application forms in more detail. Based on this information, they are responsible for deciding decide how your Bankruptcy will be dealt with:

The Official Receiver will decide the following things:

How long the bankruptcy will last. This will normally be 12 months although the OR has discretion to shorten or lengthen this using a bankruptcy restriction order.

If you can afford to make a monthly payment towards your debt and if so how much (known as an Income Payment Order which will normally last 36 months).

If you have any assets or property, how these will be treated. I.e. if and when they will be sold to realise the asset value for the creditors.

Step 8: What if you have property?

If you declare bankruptcy and are a homeowner, the title and ownership to your property and your share of any equity in it will pass to the Official Receiver. If your share of the equity in your property is significant (generally £5000 or more), the OR will want to realise this either through the sale of the property or the receipt of equivalent funds from a third party.

If you have little or no equity in your property, you will normally be able to buy back your title for a nominal amount and the cost of the solicitor’s fees. It is vital that you discuss this immediately with your OR. If you do not, the title will remain with the OR for the next 3 years. If during this time, house prices rise and your equity increases, then the OR still has the right to sell the property.

CAN A CREDITOR DECLARE YOU BANKRUPT?

Anyone who is owed more than £750 by you can petition for your bankruptcy. If the Court believes that you have been given every reasonable opportunity to repay your debt but have not done so, they may grant the bankruptcy order.

This situation is unusual. It is for more normal for individuals to declare themselves bankrupt. This is known as a debtor petition.