How do I get rid of my bankruptcy?
If you have been bankrupted there is an application you can make to court called an annulment application. If the court orders the annulment (or cancellation) of your bankruptcy it will be as if the bankruptcy order was never made.
What is an annulment?
An annulment is effectively a cancellation of your bankruptcy. Once an individual’s bankruptcy has been annulled the restrictions placed upon that individual, such as restrictions on taking credit, will be lifted. An annulment can be made at any time after the bankruptcy.
What do I need I need to do to qualify for an annulment?
There are two main bases upon which the court is likely to make an order annulling or cancelling a bankruptcy:
- If, at the time the bankruptcy order was made, there was a valid reason why it ought not to have been made; or
- that the debts and expenses of the bankruptcy have either been paid in full or secured to the satisfaction of the court.
The court may also annul the bankruptcy where it has approved an IVA (Individual Voluntary Arrangement) which is an agreement with the bankrupt’s creditors.
Bankruptcy order ought not to have been made
An application for annulment on the grounds that the order ought not to have been made, is usually a dispute between the bankrupt and the creditor who initiated the bankruptcy petition.
Accordingly, it is necessary to inform the petitioning creditor of the application so that they can respond prior to the hearing.
Some examples of circumstances which might give rise to an application on this ground are:
- that the procedures involved in serving the bankruptcy petition, statutory demand triggering the petition or the court proceedings which gave rise to the debt were not followed; or
- if the debt was paid to the creditor in full prior to the bankruptcy order being made.
Debts paid in full or secured to the satisfaction of the court
Where a bankrupt applies on this ground, it is usually because the funds have been raised to pay off the debts, statutory interest on the debt, the trustee’s costs and legal fees.
Where the official receiver is trustee, a report must filed with the court setting out the circumstances of the bankruptcy, financial statements about the debtor at the time of the bankruptcy as compared with the time of the application, details of the debts paid, details of any creditors with claims which have not been proven, and crucially whether the trustee/official receiver supports the application.
How is an annulment application made?
Usually, you would provide the funds to us, and we would ensure all creditors have been paid.
We would also make the application to the court for you. This involves drafting an application document, and a supporting witness statement setting out the grounds, and sending that application and statement to all relevant parties. We would also issue the application at court. A hearing will be listed and we will attend on your behalf.
Our fees and other costs
Due to the variation in the size of the bankruptcy estate in each case it is difficult for us to estimate here how much time it will take to deal with your annulment. Once we have had an initial meeting and have a better idea of the creditors involved we will agree a fee estimate with you.
You will also be responsible for payment of the court fees, and the costs of the Official Receiver.