Bankruptcy and Winding-Up

Bankruptcy proceedings can be commenced when an individual owes more than £5,000 and cannot repay their debts. Typically, a creditor initiates bankruptcy if all other debt recovery methods have failed.

A bankruptcy statutory demand is a formal request by a creditor to repay a debt. If the debtor does not pay the debt or reach an agreement within 21 days, the creditor can use the statutory demand as evidence to petition for the debtor’s bankruptcy.

Upon receiving a bankruptcy statutory demand, you should seek legal advice immediately to explore options such as negotiating with the creditor, disputing the demand, or arranging payment to avoid further legal action.

Your bankruptcy generally does not directly affect your partner or spouse’s financial interests unless they are jointly liable for your debts. However, if you own joint assets, your share may be included in the bankruptcy estate.

Yes, you can negotiate with your creditors to reach a settlement or repayment plan that allows you to apply for a bankruptcy annulment. You need to prove that the order should not have been made, you have paid your debts in full, or you have entered into an individual voluntary arrangement (IVA) with your creditors.

A winding-up petition can freeze the company’s assets, damage the company’s reputation, and potentially cost business. If the petition is successful, the company will be liquidated, its assets sold off, and the proceeds distributed to creditors. It can also lead to an investigation into the company’s directors’ conduct.