Being made bankrupt by your creditors is rare, as it normally means they won’t get any of their money back.
If they do petition for your bankruptcy it works in the same way as if you made yourself bankrupt apart from the creditor pays the fees.
If you owe more than £750 to a creditor they can apply for your bankruptcy. If you live in Scotland you need to owe more than £3,000 to a creditor (or two creditors can petition together if their combined debt is more than £3,000).
There are two ways that a creditor can petition for your bankruptcy in England, Wales or Northern Ireland.
- Send you a statutory demand – this is a legal document that gives you 21 days to pay the debt or the creditor can start bankruptcy proceedings. This is the most common way that creditors will petition for your bankruptcy. Creditors will sometimes send this as a threat, and have no intention of actually making you bankrupt, but if you receive one you need to contact us as soon as possible.
- They have started enforcement action after a CCJ or money judgment but haven’t been able to recover any money.
If you live in Scotland a creditor can only petition for your bankruptcy if they can prove your ‘apparent insolvency’. To do this they will send you one of the following documents:
- A charge of payment giving you 14 days to pay the debt, or
- A statutory demand giving you 21 days to pay the debt
If you don’t pay the debt in this time you’ll receive a ‘warrant to cite’ which gives you a date for a court hearing. At this hearing you can explain why you don’t think the Sheriff should allow the bankruptcy to go ahead.
Help and advice
If you’ve received any documents relating to bankruptcy you need to contact us as soon as possible so we can advise you on the next steps you need to take. Call our free helpline on 0800 138 1111 and speak to one of our expert advisors, or use our online Debt Remedy tool.