By Hannah Vachre, Solicitor, Civil Litigation

Bankruptcy petitions are presented against people who are unable to repay a debt of over £750.00 when it is demanded from them.

Bankruptcy petitions can be, rightly or wrongly, issued against anyone and not everyone who is subject to a bankruptcy petition deserves to be threatened with them. Bankruptcy carries a stigma and can be devastating to a person’s career and also put their home at risk.

At Abacus, we regularly deal with clients who have had bankruptcy proceedings issued against them and we are able to provide help and assistance to those clients who find themselves in this position.

The Process

Prior to the presentation of a bankruptcy petition a petitioning creditor will send a Statutory Demand to you. This will give the Debtor notice of what the Creditor claims and is the first opportunity for you to negotiate with the Creditor and seek to resolve the situation. If you believe you have been wrongly served with the Statutory Demand you have 18 days in which to apply to Court to have the Demand set aside. If you genuinely dispute the debt it is important that you make this application to avoid a bankruptcy petition being brought. If no application is made, the Creditor is free to present a bankruptcy petition to the Court after 21 days.

Abacus Solicitors’ insolvency department are able to deal with an application to set aside a Statutory Demand on your behalf and ensure someone attends the Court hearing to represent you.

If you have missed this time limit don’t panic…

You can still defend a bankruptcy petition but it is extremely important that you act quickly.

The team at Abacus regularly deal with clients who do not dispute that the debt is owed and have assets and/or funds in which to repay the debt, however do not know the correct way in which to approach the Creditor.

Once you are declared bankrupt an Official Receiver or a Trustee in Bankruptcy is appointed and they have control over all your assets. They also have the power to reverse previous transactions concerning your property. This makes it very difficult for you to raise finance through the sale of your assets e.g. house/car, or obtain a loan to pay the debt as purchasers and lenders will be concerned that the Trustee may take back the asset or disregard their security for the loan.

Abacus Solicitors are specialised in these types of transactions and, as illustrated below in a recent case study, are able to secure the dismissal of your petition:


Abacus’ client was a criminal Barrister who owed over £146,000 to HMRC.

The Barrister was due to be paid a similar or higher sum by the Ministry of Justice’s Legal Aid Agency in respect of his Legal Aid work and had plenty of equity in his property. Therefore, had it not been for the complicated matter of the bankruptcy petition he would have been able to repay HMRC relatively easily. The bankruptcy would have had a devastating affect on the Barrister’s career and would have most likely prevented him from practising law again.

The Barrister attempted to negotiate with HMRC and requested that the amount which the Ministry of Justice owed him be transferred from one Government Department to another (HMRC) to clear his debt. The Barrister asserted that the Government owed him money so could not understand how could they pursue him for a lesser debt.

HMRC did not accept this and therefore issued a bankruptcy petition against the Barrister in the Royal Courts of Justice. The Barrister could not get the funds which he was owed from the Legal Aid Agency quickly enough to discharge his debt prior to his bankruptcy hearing.

The Barrister contacted Abacus the day before his bankruptcy hearing seeking assistance. As our lawyers have a strong knowledge of both insolvency law and have connections to a wide range of professionals, including bridging lenders, we were able to assist the Barrister in finding a lender who could provide him with a short term secured loan in order to repay HMRC.

Very few lenders lend to someone subject to a pending bankruptcy petition and the bridging lender required the petition to be dismissed prior to the funds being handed to HMRC. By way of undertakings and a trip to London to the Royal Courts of Justice, the Litigation team successfully ensured that our client’s bankruptcy petition was dismissed immediately before the funds were provided to HMRC,  protecting both our client and the lender.

The Barrister left Court with his career intact and free to pursue further finance in order to repay the bridging loan.

If you are subject to a bankruptcy petition or need assistance in bringing or defending proceedings concerning a debt, please contact our litigation team at or call 0161 833 0044.