Bankruptcy Petitions: Commercial Debt Recovery

A bankruptcy petition is a court application filed by a creditor after multiple unsuccessful attempts to recover their debt. If the court issues a bankruptcy order, the debtor’s assets are sold to repay the creditor as part of the bankruptcy process.

The decision to file and present a bankruptcy petition is often a difficult one, driven by frustrated creditors attempting to recover unpaid debts. A bankruptcy petition is usually filed by the creditor against a company who has failed to provide payment or failed to comply with a statutory demand within 21 days.

At Expert Commercial Law, we maintain a panel of commercial debt recovery solicitors. If you would like more information on how we can assist you with bankruptcy petitions, then please get in touch with us today.

Issuing a bankruptcy petition

If attempts to collect a debt from an individual have proven unsuccessful, initiating a bankruptcy petition against the debtor may be a recourse. To issue a bankruptcy petition against a debtor, the following steps must be undertaken:

• The bankruptcy petition must contain the requisite information as stipulated by rules 10.7, 10.8, and 10.9 of the Insolvency Rules 2016 concerning a creditor’s petition.
• A thorough search must be conducted to determine whether any other petitions have been filed against the debtor in the past 18 months, and a certificate verifying this must be endorsed on the petition. These searches can be conducted at the County Court or the Royal Courts of Justice if the petition is presented in London.
• The petition must be authenticated with a Statement of Truth.
• The petition must be submitted to the appropriate court with the correct number of copies, accompanied by the Official Receiver’s deposit of £990 and a court fee of £280.
• The court will affix its seal to the bankruptcy petition and assign it a hearing date.
• The court will notify the Land Charges Department of the issuance of the petition, and it will be recorded in the public register.
• The court will provide the necessary documents to serve a bankruptcy petition on the debtor.

A bankruptcy petition must be served personally on the debtor at least 14 days before the date of the hearing at court.

Can bankruptcy petitions be challenged?

Once a petition has been issued, it can be challenged. Both debtors and creditors have the right to object to a bankruptcy filing under certain circumstances. To challenge a bankruptcy petition, the business must file an application with the court.

Businesses may also enter an arrangement to pay their debts as an alternative to challenging the petition.

Seeking legal advice is crucial during this process to ensure the proper documentation is submitted, and the grounds for challenging the petition are effectively presented.

The business typically has a limited time, often within 18 days from the date of service or 7 days before the hearing, to apply to the court to set aside the bankruptcy petition before the scheduled hearing. Swift action to file with the court is essential to meet legal deadlines.

Why choose Expert Commercial Law?

Our team take the stress out of finding you a solicitor to assist on your bankruptcy matter. We have assisted many UK businesses and individuals in finding the right litigation team for their case.

All of our solicitor firms are authorised and regulated by the Solicitors Regulation Authority (SRA) and offer a range of funding options for your case. All solicitors are registered in England and Wales.

We are not a firm of solicitors; however, we have a panel of commercial law solicitors who are authorised and regulated by the SRA. If you contact us in relation to a commercial law case, we will pass your case onto a panel law firm.

If you contact us in relation to a commercial law case, we will pass your case on to a panel firm. Panel firms pay fees which contribute to the running of our website and marketing. We will never charge you for passing on your case.

Please contact us to speak to a member of our team using the form below or call us today.