This week, our restructuring team have assisted a client in obtaining an annulment of his bankruptcy.
As we all know there is rising concern about the cost of living with some people struggling under a large amount of personal debt that they cannot repay. For some people, bankruptcy is the best option, however for others there are good reasons why bankruptcy is not the correct route.
We often assist clients who have been made bankrupt despite their best efforts to avoid it. In this case, we advised our client to apply to annul their bankruptcy on the basis that third party monies would be used to pay off the bankruptcy in full. This gave our client a clear route to exit their bankruptcy.
We were provided with details of the bankrupt’s creditors, however after the Court application was made, the Official Receiver was informed of an additional significant creditor claim. Our client had been unaware of the claim as it was a historic debt. After we made further enquiries, the creditor accepted that their claim was statute barred and therefore could not form part of the bankruptcy. This allowed the annulment application to proceed as intended.
There are important lessons to be learnt:
- It is important that you are aware of the consequences of being made Bankrupt;
- If you are issued with a statutory demand it is important that you seek legal advice at that stage rather than waiting for a bankruptcy petition to be issued;
- If you are made Bankrupt you should seek advice quickly as there may be options such as an annulment or an Individual Voluntary Arrangement which would allow you to exit bankruptcy.
The correct route will depend on your own circumstances, but it is important to obtain advice as soon as possible to ensure that all available options are discussed.