Bankruptcy

Altion Law can act for Directors, Sole Traders & Individuals.

We understand that the threat and consequences of bankruptcy can be serious and the situation can be very stressful.

Altion Laws commitment is to deliver clear and concise advice on the options available to you and will explain the rules and procedures of bankruptcy:

  • Challenge Statutory demands
  • When bankruptcy can be avoided
  • What happens to you during bankruptcy
  • How bankruptcy comes to an end
  • What happens after bankruptcy
  • Other legal issues that arise in connection with bankruptcy

Bankruptcy places serious restrictions on the property and activities on a bankrupt and failure to comply with the rules can lead to action being taken against you.

Click Here To Download Altion Law’s Frequently Asked Questions On Bankruptcy

I’ve Received A Statutory Demand, What Should I Do?

In order to issue a Bankruptcy Petition against you, a creditor could serve you personally with a Statutory Demand. If a Statutory Demand is threatened or brought against you, you are strongly advised to seek immediate legal advice.

It is crucial that you act quickly when you receive a Statutory Demand if you are to avoid the creditor bankrupting you. You have only 18 days to apply to the Court once you have received a Statutory Demand.

Altion Law can assist you if you believe you maybe considering Bankruptcy. If you would like to have a confidential discussion with a member of our team, or Make An Enquiry, we will call you back at a time that is suitable for you or you can contact us directly on 01908 414990.

Successfully Acting For A Client With Contested Bankruptcy Proceedings Issued By A Business Creditor

Altion Law was instructed and found upon investigation that statutory procedures had not been followed by the creditor, as well as there being contested material facts behind the cause of action.

The client was represented in court to oppose and contest the bankruptcy action on the basis that the creditor had made some errors and false allegations on which they had based the action. The action was resolved by way of settlement and the proceedings were dismissed against the client.

In today’s testing economic climate creditors are increasingly resorting to Statutory Demands more quickly than ever before.

Often the use of Statutory Demands are inappropriate and in many cases we can apply to the Court to set aside the Statutory Demand if you are able to show that there is a genuine dispute on substantial grounds and has a real prospect of a Defence.

Alternatively, if you can show that you have a counterclaim, cross-demand or set-off that is equal to or exceeds the debt, this will prevent a creditor from taking any formal insolvency process against you.

Top Tip: You should not ignore the Statutory Demand and seek legal advice about how bankruptcy would affect you immediately. Creditors may sometimes threaten you with bankruptcy where it’s clearly inappropriate, for example, where you owe less than £5,000 or where sums due are disputed. This might be harassment and you can challenge it.

Altion Law can assist you if you believe you maybe considering Bankruptcy. If you would like to have a confidential discussion with a member of our team, or Make An Enquiry, we will call you back at a time that is suitable for you or you can contact us directly on 01908 414990.

HMRC Or Local Authority Bankruptcy Petition

HMRC

If you have failed to pay your tax rates in full including interest to HM Revenue & Customs (“HMRC”), you can have a Statutory Demand served against you by HMRC if the debt which you owe at least £5000. If you have failed to pay the sum stated in the Statutory Demand, HMRC can proceed to present a Bankruptcy Petition against you.

Top Tip: Once a Bankruptcy Petition is presented against you, even if you have the funds to pay the debt in full or can prove that they do not have any tax liabilities, HMRC can also request that the Bankruptcy Petition continues unless you pay HMRC’s additional costs for preparing and presenting the Bankruptcy Petition. It is important to settle your debt before it reaches the Petition stage.

Local Authority (Council tax)

If you have failed to pay your Council tax liability, then the Council may action to apply to the Magistrates’ Court for a Liability Order. If the Liability Order is not paid in full and the debt due, (including any penalties and legal costs) is for £5000 or more, the Council will commence Bankruptcy proceedings against you.

Top Tip: Once a Bankruptcy Petition is presented against you, even if you have the funds to pay the debt in full, the Council can make a request that a Bankruptcy Order be made and in addition the Council will seek payment of their costs for preparing and presenting the Bankruptcy Petition. It is important to settle the debt before the Petition is presented.

When Altion Law Assisted And Stopped The Company Collapse

Preventing HMRC Winding Up A Company Over Unpaid Tax

Altion Law was instructed by a Ltd Company which had been placed into a potential liquidation following Insolvency proceedings issued by HMRC for unpaid tax. HMRC had alleged that the company had deliberately avoided tax and defaulted on payments. HMRC had issued a winding up petition based on these allegations, which had led to the company bank accounts being immediately frozen.

Previous lawyers and accountants had advised the client that there were no prospects of contesting the insolvency action and that the company should be liquidated. The Director wished to fight for his company and approached Altion Law for a specialist opinion. Altion Law considered the facts of the matter and advised the company on options and represented in court to oppose and contest the wind up action, on the basis that HMRC had made some errors and false allegations.

A successful interim application was also made to obtain an immediate Validation Order so that the company could continue trade, whilst the wind up petition was heavily contested, and then settled before the main court hearing.

Altion Laws involvement and action resulted in the petition being dismissed and permitted the company to continue operating successfully again.

Bankruptcy Orders – What Is It ? Can I Fight It, Annul or Cancel it?

Once the Court has ordered a bankruptcy order against you, the Official Receiver will be notified of the details immediately. The Official Receiver may send you with a questionnaire asking for full details of your financial situation. You will be given an appointment for an interview to take place over the telephone or to attend their office to discuss your financial situation. The Official Receiver will take control of your property and financial affairs. The purpose is to establish whether you are in a position to contribute towards the bankruptcy costs and the debts via your assets and income.

We can apply to the Court on your behalf to cancel your bankruptcy:

  1. Where the bankruptcy order should have not have been made in the first place
  2. Where all your debts and expenses of the bankruptcy have either been paid or secured to the satisfaction of the Court
  3. Where you have made an individual voluntary arrangement with your creditors to pay your debts which has been approved.

We can assist you in preparing an application to annul a Bankruptcy Order based on the above grounds and thereafter making representation at the hearing.

If you are considering Bankruptcy or have questions about the process and how this could affect your job, pension, home etc please do download our Frequently asked Questions relating to Bankruptcy.

Can I Defend A Bankruptcy Petition?

Altion Law can provide legal advice and assist you in defending Bankruptcy Petition by preparing evidence as to why you are opposing the making of a Bankruptcy Order and demonstrating why the debt is substantially disputed.

You may set out your reasons as to why you don’t owe the money or the creditor may be out of time for taking legal action or even that you’ve already made a reasonable offer of repayment or an offer to secure the debt to the creditor which was unreasonably refused.

Altion Law has experience in making representation at the hearing and entering into negotiations with creditors to achieve a settlement outside the Court.

However, once a Bankruptcy Petition is presented against you, even if you have the funds to pay the debt in full or can prove that they do not have any tax liabilities, HMRC can also request that the Bankruptcy Petition continues unless you pay HMRC’s additional costs for preparing and presenting the Bankruptcy Petition. It is therefore very important to settle your debt before it reaches the Petition stage.

Altion Law can assist you if you believe you maybe considering Bankruptcy. If you would like to have a confidential discussion with a member of our team, if you complete our Contact Us Form, we will call you back at a time that is suitable for you or you can contact us directly on 01908 414990.

We Can Assist Trustees In Bankruptcy With Our Expertise In All Aspects Concerning The Areas Of Personal Insolvency:

  • Possession and sale applications and recovery of assets.
  • If bankrupt does not co-operate with Trustee in Bankruptcy, we could make an application for suspension of discharge from bankruptcy.
  • Application to Court to obtain Income Payment Orders.
  • Transactions at an undervalue and Preference claims.
  • Applying to the Land Registry to place restrictions on title of bankrupt’s property and withdrawal of restriction at the conclusion of the matter.
  • Placing charges over bankrupt’s property by making application to Court.

These have been mentioned in the news recently.

A company voluntary arrangement is where the company and its creditors come to an agreement which is implemented and supervised by an insolvency practitioner. The CVA is often used to avoid other types of insolvency procedures, however it can also supplement other procedures and may also be used in conjunction with administration where a moratorium can provide the company with some space to agree proposals with its creditors.

Altion Law Can Act For Creditors/Insolvency Practitioners Seeking To Recover Money Due To Them

We understand that the failure of someone to pay their debts to you can be of great concern. There are steps that needs to be taken prior to moving towards Bankruptcy but to make an individual bankrupt you must be owed at least £5,000 (or owed by a company for an amount exceeding £750.00 in order to wind up a company) and the debtor appears either to be unable or to have no reasonable prospect of being able to pay the debt.

We can clearly explain the process and court procedure to recover money and other assets available to pay off the debts:

  • We can issue and defend statutory demands.
  • How to make someone bankrupt.
  • What happens to the money owed to you.
  • What steps a trustee in bankruptcy may be able to take.

Alternatives To Bankruptcy

If you are struggling with debt problems, it is important to be aware of all the different options that could help you. Altion Law will set out alternative solutions available and we are happy to provide advice which is the most suitable for your situation.

Before choosing the best solution for you, you should consider finding out more about other alternatives before considering bankruptcy route. You may need to consider the advantages and risks for each option before making the decision.

  1. Debtor’s Petition – you can apply online to make yourself bankrupt if you cannot pay your debts.
  2. Getting a Debt Management Plan – which is an informal agreement between you and your creditors whereby you agree to repay your debt in reduced payments that are affordable to you managed by a financial company.
  3. Debt Relief Order – granted by the Insolvency Service if you cannot pay your debts, total debts are less than £20,000; total assets are worth less then £1,000 with £50 or less spare income each month. Most debts are written off after 12 months.An Administration Order – legally binding administrative arrangement between you and your creditors approved by a county court that enables you to pay only what you can afford each month towards your debts which is not more than £5,000 in total.
  4. An Individual Voluntary Arrangement – is legally binding agreement between you and your creditors to pay back your debts over a period of time which is managed by an Insolvency Practitioner. This involves making a formal, legally binding payment arrangement with you and your creditors. It has to be approved by the court and the creditors have to adhere to the arrangement which is managed by the Insolvency Practitioner. It offers flexibility and allows you to pay towards your debt every month over a fixed period of time. You will not lose your home or job. You would need to seek legal advice to explore if this arrangement is right for you or consider other.

Altion Law can assist you if you believe you maybe considering Bankruptcy. If you would like to have a confidential discussion with a member of our team, if you complete our Contact Us Form, we will call you back at a time that is suitable for you or you can contact us directly on 01908 414990.

Make A Free Enquiry

For a free enquiry, call us today on 01908 414990, email us at hello@altion-law.co.uk or complete our free enquiry request for a free, confidential and no obligation discussion and let one of our expert team discuss your situation and the options available to you.