Annulling the Bankruptcy

Procedures for annulling a bankruptcy

We receive a lot of calls and emails from the public asking about; “How do I go about annulling the bankruptcy?” and also, "What does annulling bankruptcy mean?"

Please note that annulling a bankruptcy order is the court procedure where a bankruptcy order is cancelled.

There are three instances where a person can go about annulling a bankruptcy:

• the bankruptcy order should not have been made, for example because the proper steps were not taken when obtaining the order; or
• all your bankruptcy debts and the fees and expenses of the bankruptcy proceedings have been either paid in full or secured (guaranteed) to the satisfaction of the court; or
• you have reached an agreement called an “IVA” with your creditors to repay all or part of your debts.

The procedure for annulling a bankruptcy if the bankruptcy order should not have been made is as follows:-

• Get an application form from the court dealing with your bankruptcy.
• Make an affidavit (a written statement of the relevant facts that is sworn on oath or affirmed, usually before a solicitor) or a witness statement verified by a statement of truth saying why the bankruptcy order should not have been made.
• Send or take to the court the completed form and affidavit or the witness statement verified by a statement of truth. The court will then set a date to hear your application, and you should attend the hearing.
• Before the hearing: you must notify the official receiver, the person who petitioned for your bankruptcy and the trustee (if an insolvency practitioner has been appointed as trustee in place of the official receiver) of the date, time and place of the hearing. You should do this in enough time for them to attend the hearing. At the same time, you should send each of them copies of your application form and affidavit or a witness statement verified by a statement of truth.
• Soon after the hearing: the fees and expenses of bankruptcy will have to be paid. The court will decide who should pay them when it considers your application.

The procedure for annulling a bankruptcy if the bankruptcy debt have been paid off is as follows:-

• Get an application form from the court dealing with your bankruptcy.
• Make an affidavit or a witness statement verified by a statement of truth setting out details of your assets and debts at the date of the bankruptcy order and details of your payments made or how you have secured payment of the debts.
• Send or take the form and affidavit or the witness statement verified by a statement of truth to the court. The court will then set a date to hear your application, which you should attend.
• You must notify the official receiver and the trustee of the date, time and place of the hearing. You should do this at least 28 days before the hearing. You should also send copies of your application form and affidavit or the witness statement verified by a statement of truth to the official receiver and the trustee.
• The official receiver or the trustee will send a report to the court to confirm that your debts have been paid or secured. The report may also comment on your conduct in the bankruptcy.

The procedure for annulling a bankruptcy if the bankruptcy debts are now to be placed in an IVA is as follows:-

• The insolvency practitioner nominated to deal with your case will call a meeting of your creditors.
• If your creditors agree to your offer to pay them, you can apply to the court for an annulment. This application can be made 28 days after the chairman of the meeting of creditors has reported the results of the meeting to the court.
• The application should be made using the same procedure as applications where the bankruptcy order should not have been made. The only difference is that your affidavit or the witness statement verified by a statement of truth accompanying the application form should state that your creditors have approved a voluntary arrangement as the grounds on which you are making your application.

What is the effect of the annulling a bankruptcy order?

An annulment has the effect in law that the bankruptcy order was never made. You will revert to your pre-bankruptcy status. Disposals of your property by the Official Receiver and the trustee will remain valid and will not be reversed. Any other assets will be returned. You will be liable for any of your debts that have not been paid in the bankruptcy.

If you wish to discuss annulling a bankruptcy order please call freephone 0800 074 6918. Money Advice Direct is able to offer help via telephone or online. The service offers help & advice online from leading debt experts.

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