We specialise in defending bankruptcy petitions, most of which are brought by the HMRC.
If you do not respond to a statutory demand then a creditor may petition the Court for your bankruptcy. This involves sending a completed petition to Court for a hearing date. Most petitions will be presented in your local County Court although HMRC will typically present in the Royal Courts of Justice. The creditor has to pay a Court fee of £1,270 to petition for your bankruptcy.
We regularly represent clients at bankruptcy hearings and frequently defend bankruptcy petitions presented by the HM Revenue & Customs for unpaid tax.
We are often instructed at short notice to make an application to request an adjournment of the bankruptcy hearing to enable our clients to properly prepare their case.
A creditor must be owed £5,000 or more to present a petition although several of your creditors can come together to present a joint bankruptcy petition. A petition can only be presented in respect of unsecured debts. Unsecured debts are those debts which have not been charged against a property or other assets.
If you receive a bankruptcy petition, there is still time to prevent a bankruptcy order being made against you. As with a statutory demand, a bankruptcy petition must be served on you by hand, i.e. personal service and you must be given 14 days' notice of the bankruptcy hearing.
If you dispute the debt but failed to set aside the statutory demand, we can assist you in defending the petition. The grounds for defending a petition can include:
- That there is a substantial dispute as to whether the money is owed;
- That you have a potential counterclaim;
- That the creditor already holds security for the debt;
- That the debtor has failed to properly complete the statutory demand;
- That you have reduced the debt to below £5,000;
- That the sum claimed is not a liquidated sum, i.e. that it is not yet clear as to the precise amount owed;
If you intend to defend a bankruptcy petition then you are required to file and serve a document, setting out your reasons as to why you should not be made bankrupt, at least 7 days before the first hearing. We can help you with this and file documents on your behalf.
Even if you accept the debt is owed, we can still help you avoid bankruptcy by seeking to negotiate a reasonable repayment plan with your creditor. It will be more difficult for a creditor to make you bankrupt if they have unreasonably refused your offer. We can advise you on making technical offers and defending your bankruptcy petition.