What is Bankruptcy Annulment?
Once a bankruptcy order has been made, you can apply to have it annulled (cancelled). This is usually because the bankruptcy order should not have been made in the first place, all of your debts and bankruptcy fees have been paid or secured by a third party, or if you have made an Individual Voluntary Arrangement with your creditors to pay part or all of your debts, and it has been approved.
To get your bankruptcy annulled you will need to complete an Annulment Application for the court. Two forms make up the Annulment Application; the first form is the Insolvency Act Application Notice and the second is the Witness Statement. It sounds like a complicated process, but don’t worry, we are here to assist you and to make sure both forms are completed accurately to avoid any delays in your annulment process.
You can apply for your bankruptcy to be annulled if:
- The bankruptcy order should not have been made.
- All your debts and the cost of the bankruptcy have been paid in full or secured by a third party to the satisfaction of the courts.
The best, lowest risk and the most cost-effective way to apply for an annulment is to secure third-party investment to repay your debt(s). It is possible to use your own funds if available, but you will be charged a 15% net realisation fee on top of your debt. For example, on a £20,000 debt, this would amount to an additional charge of £3000. That’s why we always recommend that you raise your funds through a third party, such as family, friends or associates. If you are finding it challenging to get third-party funding, we can step in to assist you, as there are options available to you through our firm. We work on a no win, no fee basis (with a conditional fee arrangement), guaranteeing that we won’t charge you if we fail to get your bankruptcy annulled.
Why it’s crucial for you to obtain an undertaking from a solicitor?
If you manage to secure investment from a third party, it will not be given to you until your bankruptcy has been annulled. It is for that reason why it is essential to get an undertaking from a solicitor, as they will hold the investment for you. This is critical as it forms part of the Insolvency Rules 10.138 and is one of the only ways in which the court will accept your investment. After securing an undertaking and third-party investment, the Official Receiver will submit a report to the court. A hearing will then take place to determine whether your annulment is granted, adjourned or dismissed.