Bankruptcy from creditors

If you owe more than £750 to a creditor they may attempt to make you bankrupt to recover the money from any assets you have, such as your house or savings.

The effect of this is the same as declaring yourself bankrupt, but the creditor pays the fees. There are two ways bankruptcy proceedings can be started by the creditor.

Statutory demand

They must issue a document called a ‘statutory demand’. This is the most common way to start bankruptcy proceedings.

Enforcement action

They have tried to recover the amount owed using enforcement action after a county court judgment.

If you receive a statutory demand, you should call us immediately for further advice. You only have eighteen days to respond, so you must act quickly.

Creditors sometimes issue statutory demands as a threat and may have no intention of making you bankrupt, but you must not ignore it. The effects of bankruptcy are extremely serious, for example you could lose your home and other assets.

You can find out more about bankruptcy from The Insolvency Service.

If you need help with your debt problem, make sure you get free, professional debt advice. Our online service, CCCS Debt Remedy, will assess your financial situation and give you the tailored advice you need.

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FAQs

Does a creditor have to pay to make me bankrupt?

Yes, there is a bankruptcy fee of £700 for a creditor to issue bankruptcy proceedings. There may also be costs to pay for serving the statutory demand in person.

I’m not sure if I have a county court judgment (CCJ). How can I check?

The easiest way to check if you have a county court judgment (CCJ) is to contact the creditor and ask them.

If you have lost touch with the creditor or are unsure which creditor may have taken out a CCJ, you can request a copy of your credit file. This will show any judgments that were registered in the last six years. There is a charge of £2 to check your credit file. To check your credit file you should contact one of the credit reference agencies:

You can also check with the Registry Trust who store information about all judgments. This will cost £8.

Where can I find some legal advice?

There are several places you can go for free advice on legal matters.

Law centres are found in many larger towns and offer free advice from qualified solicitors or barristers. The Law Centres Federation can help you find your nearest centre.

Community Legal Advice can also assist you in finding free legal advice in your area.