A look at the court process for those declaring bankruptcy.
Many people have understandable reasons for not wanting to apply for bankruptcy – a perceived social stigma, a feeling that they have failed – but for many, there is also the fear of having to go to court, and what that entails. They may be surprised at the answers.
You have to ask (petition) a court if you want to be declared bankrupt. This is the starting block of the bankruptcy process, and from that request, they will then decide whether or not to allow it.
So first of all, find the court nearest you: https://courttribunalfinder.service.gov.uk/search/
If you live in London, it will most likely be the High Court. Elsewhere, you would normally have to go to the county court in the area you have lived in for the past 6 months, but under some circumstances it may be the area where you have worked.
After that, once you have applied for bankruptcy, should it be accepted, you’ll receive a ‘bankruptcy order’.
Bankruptcy Court Fees
There is another stumbling block about going bankrupt in regards to the courts. By definition, people applying for bankruptcy in the UK do not have much money. However, applying for bankruptcy is not free – there are costs.
There is a court fee to pay and a bigger amount to be paid to the official receiver. In England and Wales, petitioning for personal bankruptcy costs a total of £705 in fees: £180 to the court and £525 bankruptcy deposit.
In Northern Ireland a total fee of £647 is payable: £155 to the court, a £7 solicitor's fee and £525 bankruptcy deposit.
However: in certain cases you could be exempt from paying the court fee, for example if you’re on a low income or receiving benefits, but you would still have to pay the bankruptcy deposit. Sequestration (Scottish bankruptcy) costs a total of £200. There are no exemptions or restrictions to this, so the total fee amount needs to be paid in full.
Bankruptcy Court Appearance
As for appearing in court itself, do not be concerned – there is no trial or public appearance necessary. The whole bankruptcy court process is quick and private. Some bankruptcy courts will allow you to arrive on the day while others will set an appointment – make sure you know which stance your court takes.
Nevertheless, you should dress appropriately. You should not dress overly-casual, but respectfully and smartly. I would advise against jeans or trainers.
On arrival, go to reception to inform them of your presence, and so your paperwork can be handed over. You need three copies of all the relevant forms. You will not be in the public eye, and will be treated with respect. You will however then have to wait whilst your forms are assessed.
There may well be nothing else for you to do. You may be called in, which might only be for a minute or two to confirm you completed the form, or to clear up any ambiguity. For most people however, you may not even have to meet the registrar, but will simply be handed a piece of paper with your bankruptcy reference on it. You will need to take a call from the bankruptcy official receiver at a date in the future, and you are free to go.