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What is a Bankruptcy Order?
The High Court can declare you bankrupt by issuing a ‘bankruptcy order’. This can only be performed when the court has been presented with a ‘bankruptcy petition’. Bankruptcy petitions are usually submitted by those you owe money to and done so only after your creditors feel they have exhausted all other options. Before approving bankruptcy orders, the court will take into account various factors, including:
- Your unsecured debts total less than £20,000
- You have not been made bankrupt or subject to a IVA in the previous 5 years
- The bankruptcy order is only a result of a debtor’s request
Certificate of Summary Administration
If the petition is approved, a Certificate of Summary Administration is awarded. This certificate is a positive thing as not only does it simplify the entire bankruptcy procedure but it also helps to reduce costs. When a Certificate of Summary Administration is approved, it means that an Official Receiver will be in charge of all the affairs and that an expensive and lengthy investigation is unlikely to be conducted. Furthermore, if you are the person owing money it also has one more very important aspect; that of reducing the time it takes for your debts to be discharged; speeding up the entire bankruptcy process.
Is Bankruptcy my best option?
Bankruptcy is the best route for many with extreme debt, however it isn’t the only option. Depending on your level of debt, your future financial outlook and other factors such as your profession, and your assets, there may be other better options. These options include debt consolidation, Individual Voluntary Arrangements (IVAs) and Debt Relief Orders (DROs). Complete our quick online assessment to see which is best for you.Take our quick online test
What Happens Next?
Once the application has been approved and the bankruptcy order is official, your bank accounts in the UK will be frozen and control of your cash given to the Official Receiver. This person will then arrange a meeting with you to catalogue your assets and determine whether any of them can be sold off to repay some of your debts.
What is form B40.01?
One of the many things you may be requested to do is complete a B40.01, which is a short bankruptcy questionnaire. Similar to the information requested in your Statement of Affairs form, this form will help the person in charge of your bankruptcy identify what assets you have and whether these can be used to help pay your debts. This form can often be completed via the telephone as well as in person.