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Can A Creditor Apply for My Bankruptcy?

If you ignore your debts, either you won’t pay, or you can’t pay what you owe, your credit can apply for your bankruptcy.

When creditor applies to make you bankrupt, the impact is the same if you file bankruptcy yourself. However, instead of you paying for bankruptcy costs and fees, the creditor will be the one to pay for the expenses.

Individuals who have struggled to pay their debt prefer applying for bankruptcy to make themselves bankrupt. Creditors are less likely to consider applying for bankruptcy to make the debtors bankrupt because of the costs and fees upon application. This means that your creditor will only entertain this idea if they are certain to get back the costs and fees paid to make you bankrupt. This happens when you possess adequate assets or income to guarantee that bankruptcy allows the creditor to recover debt and costs.

So, if you own a home, vehicle, or assets that cost a fortune to cover your debt. Your creditor will take bankruptcy as the last resort and will file it themselves.

How Creditor Apply for Bankruptcy?

Creditor Bankruptcy in England, Wales, or Northern Ireland

If you live in England, Wales, or Northern Ireland with debt over £5,000, your creditor can apply for your bankruptcy.

If you owe money to several creditors, your creditors can club together to put the amount together. This happens if your debt to each of your creditors is lesser than £5,000, and combining your debts will make it eligible to apply for bankruptcy. This means your creditors can apply for your bankruptcy together to exceed the £5,000 minimum.

Ways for Creditors to Petition Your Bankruptcy (this process varies depending on the country you reside):

  • A letter in the form of a statutory giving you 21 days to clear the debt or proceed to an arrangement on how you can pay it. If you ignore this notice, your creditor can petition for your bankruptcy. This is the usual way that creditors will appeal for your bankruptcy. If you get a statutory demand you must contact us right away.
  • If you failed on an individual voluntary arrangement because you didn’t make the payments that your creditors agreed to, the insolvency practitioner or IP supervising your IVA can petition for your bankruptcy. Though this process is seldom practiced.
  • Enforcement agents have visited your home after a County Court Judgment or CCJ (applies for residents of England and Wales) but determined that there are no valuable goods that can be taken from you.

Creditor Bankruptcy in Scotland

If you live in Scotland with debt more than £3,000, your creditor can apply for your bankruptcy.

If you owe money to many creditors, your creditors can club together to put the amount collectively. This happens if your debt to each of your creditors is lesser than £3,000, and combining your debts will make it eligible to apply for bankruptcy. This means your creditors can apply for your bankruptcy together to exceed the £3,000 minimum.

If you reside in Scotland a creditor can only apply for your Scotland bankruptcy if they can determine your ‘apparent insolvency’. To achieve this they’ll relay one of the latter documents to you:

  • A payment charge giving you 14 days to settle your debt
  • A statutory demand giving you 21 days to settle your debt

Your creditor can also petition for bankruptcy if you set up a protected trust deed to repay your debts, but did not follow the agreement to pay. If you failed to settle your debt in this period, you’ll get a ‘warrant to cite’ which contains the date of the court hearing.

What to do if I receive a date for bankruptcy hearing?

During the court hearing, you can justify why you should not be declared bankrupt. In contrast, if the bankruptcy is favorable for you, you are still obliged to attend the hearing. The court can regard considering the records of the debt. This includes what you’re responsible to pay, and if the creditor has appeared justly when granting any proposals of payment you’ve made. If you receive a date for a court hearing, contact us: 0800 193 1024

What happens after bankruptcy hearing?

When you’re declared bankrupt your case will be relinquished to a ‘trustee’. If you reside in England, Wales, or Northern Ireland, it will be pass to an official receiver, and if you reside in Scotland, it will through an Accountant in Bankruptcy.

The trustee’s staff will call or notify you to obtain details of your income, assets, essential living costs, and debts. You’ll be required to complete court forms when providing this information.

The trustee will give you details on what will transpire for the rest of your bankruptcy. You have to follow what the trustee told you; otherwise, further court action can be taken against you.

Financial Help

Our online debt advice is accessible to everyone. You can use it for free and it’s a guarantee to keep everything confidential. Should you wish to speak via phone, call us on   0800 193 1024