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 become very stressful.

Our experts can offer the commitment to deliver clear advice on the options available to you. They will explain the rules and procedures of Bankruptcy. These include:

  • Challenging a Statutory demand.
  • Avoiding the Bankruptcy altogether.
  • The process, and what to expect.
  • What brings Bankruptcy proceedings to an end.
  • After the Bankruptcy process, what happens next.
  • Discussion of legal issues that arise in connection with Bankruptcy.

Bankruptcy can place serious restrictions on the property, and activities of the order. Failure to comply with the rules, can lead to further 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, we strongly advise you seek immediate legal advice.

It is crucial that in the event of this happening you act quickly on receipt, to avoid the creditor bankrupting you. You also 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. This can be 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. There had been contested material, and facts behind the cause of action.

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

Todays Economic Climate Effect

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

Often the use of a Demand in these cases are inappropriate. Therefore in many cases we can apply to the Court to set aside. This can be done 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 then prevent a creditor from taking any formal insolvency process against you.

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

HMRC Or Local Authority Bankruptcy Petition

HMRC

This applies to those who failed to pay your tax rates in full. This also including interest to HM Revenue & Customs (“HMRC”), or have a Statutory Demand served against you. This is if the debt which you owe, is at least £5000.

Also this can apply if you failed to pay the sum stated in the Statutory Demand. HMRC can proceed to present a Bankruptcy Petition against you.

Local Authority (Council tax)

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

When Altion Law Assisted And Stopped The Company Collapse

Preventing HMRC Winding Up A Company Over Unpaid Tax

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

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

A successful application was made to obtain an immediate Validation Order. This meant the company could continue trade. The wind up petition was heavily contested, this was settled before the main court hearing.

Altion Laws involvement and work, resulted in the petition being dismissed. 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.

Following the questionnaire, an appointment will be given for an interview to take place over the telephone, or you will be asked 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. If the order was made in error.
  2. All your debts and expenses of the bankruptcy order, have been paid, or secured by the Court.
  3. Or, if you made an voluntary arrangement with your creditors, which has been approved.

Assisting you in Preparing an Application, to Annul a Bankruptcy Order

This is based on the above grounds, making representation at the hearing.

If you are considering Bankruptcy we can help. If you have questions about the process, and how this could affect your job, pension, home, then download our Frequently asked Questions.

Can I Defend A Bankruptcy Petition?

Altion Law can provide you with legal advice and assist you in defending Bankruptcy Petition. From this evidence will then be prepared including explanation to why the debt is being 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. This would be even if you’ve already made a reasonable offer of repayment. This can also be can happen if an offer to the creditor, is refused.

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

When Presented Bankruptcy Petition

If you have the funds to pay in full, or can prove that they do not have any tax liabilities, HMRC can request that the Bankruptcy Petition continues. This will be unless you pay HMRC’s additional costs for the preparing, and presenting the Bankruptcy Petition. It is therefore very important to settle your debt, before it reaches the Petition stage.

Are You A Trustee In Bankruptcy?

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.
Company Voluntary Arrangements

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, and the Insolvency Practitioners Seeking To Recover Money Due To Them

We understand that someone not paying their debts to you can be of great concern. You will need to take further steps to investigate a reason. This is needed before moving towards initiating a Bankruptcy order.

In order to make an individual bankrupt, they must owe you at least £5,000, or owe a company for an amount exceeding £750.00. This would be if you are wanting to issue the wind up of a company. Alternatively the individual has to appear either to be unable to pay this debt to you, or to have no reasonable prospect of being able to pay it in the future.

Our Experts 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.
  • Give detailed instruction on, how to make someone bankrupt.
  • Can explain what happens to the money owed to you.
  • Explain to you the 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.

Our experts will set out alternative solutions available to you. We are happy always to provide advice which is the most suitable for your situation. You may need to consider the advantages, and risks for each option, before making the decision.

These are the Options to Consider:

  1. Debtor’s Petition – you can apply online to make yourself Bankrupt if you cannot pay your debts.
  2. Getting a Debt Management Plan – an informal agreement between you and your creditors. This is whereby you agree to repay your debt in reduced payments. They should be affordable to you, managed by a financial company.
  3. Debt Relief Order – granted by the Insolvency Service if you cannot pay your debts. This is if the total debts are less than £20,000 or the total assets are worth less then £1,000. This is with £50 or less spare income each month. As a  results in most debts being written off after 12 months.
  4. An Administration Order – a legally binding administrative arrangement between you and your creditors. This order will be approved by a County Court. The Court will only ask you to pay what you can afford. The payments required will be expected each month towards your debt, and will not be more than £5,000.
  5. An Individual Voluntary Arrangement – This is a legally binding agreement between you and your creditors. This agreement is put in place to pay back your debts over a period of time, and will be managed by an Insolvency Practitioner. It will involve making a formal, legally binding payment arrangement with you and your creditors. This will be approved by the court and the creditors. The debtor at this stage will have to adhere to the arrangement managed by the Insolvency Practitioner. The offer will enable you to pay towards your debt every month, over a fixed period of time. You will not lose your home, or job in a voluntary arrangement.

 

Further information

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.