Begin Bankruptcy Application
Either the creditor or the debtor can file a bankruptcy. If the creditor (the person(s) or company that is owed money) is owed more than £750 and the person seems unable to pay, they may file. The debtor (the person who owes the money) petitions the local count court within the insolvency area in which she or she lives. There is a court fee of £140 that they must pay and also a deposit towards the cost of the administration of the Bankruptcy Order that costs £310. The court may waive some of the fee at its discretion.
The next step is for the debtor to fill in a large number of documents. It is best if you can get a qualified professional to help you with this as most of the documents presume that you have been in business. The petition, the collection of documents is presented to the local court. The debtor will need to fill in a form called Form 6.28 that is also known as "The Statement of Affairs". This will ask you for a LOT of information from mortgage details to property values, creditors, unsecured debts, savings etc. Again, much of this is confusing and needs the help of a professional advisor in most cases.
Next, the debtor takes the forms to be sworn as true. This is when the fees are also paid. The court will accept the forms and the entire case will be put before a judge and a hearing date will be arranged. At the hearing, if you have less than twenty thousand pounds in debt, the court may refer you to an insolvency expert to make a proposal for an IVA, an Individual Voluntary Arrangement. If this isn't possible, will make a ruling and order the bankruptcy. The court also has the power to dismiss the case.
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