In broad terms, the purpose of bankruptcy is:
(1) To ensure that your assets are collected in, sold and the net proceeds shared amongst all your creditors (i.e. the people you owe money to) in proportion to what they are owed; and
(2) To give you a fresh start, freed from the burden of your debts.
If you want to have yourself declared bankrupt you must use the online application procedure, whereas a creditor that wants to have you declared bankrupt has to apply to court by way of a bankruptcy petition.
You can only apply online for a bankruptcy order if on the day of the application you are unable to pay your debts. An adjudicator will consider the online application and will make the bankruptcy order if they're satisfied that all the requirements are met. The court is not involved in this process.
In England and Wales, you can only apply online for a bankruptcy order if your centre of main interest (COMI) is in:
You can still apply online if neither of the above is true of you, and you:
Your COMI is in a particular place if it's clear to others that you regularly conduct the administration of your interest there. For a sole trader, this might be the place where they're seen to trade from; for a private individual it could be where they're seen to live or work. Under insolvency laws, it's further presumed, until proven otherwise, that your COMI is in:
In the online bankruptcy application, you must give extensive prescribed information, including your name, contact and employment details, debts, liabilities and creditors. You must also provide details of your accountant, solicitor and any legal and insolvency proceedings you've been involved in.
You must confirm in the application:
You must authenticate the application. You can do this by confirming your identity in a manner required by the adjudicator. If the adjudicator does not specify this, you can authenticate the application by including a statement of your identity that the adjudicator will not have any reason to doubt.
You will need to pay a fee and deposit to cover part of the costs of the Official Receiver for administering your bankrupt estate. The total cost is listed on the GOV.UK website. The payment can be made online either in a single payment or by instalments. The application will not be regarded as having been made unless payment has been made in full.
The bankruptcy application must be made online, unless you have made specific arrangements with the adjudicator. The date of the application will be the date that the application is submitted to the adjudicator and it will be 'made' when the adjudicator acknowledges receipt of the application either electronically or in another way. However, an application will not be regarded as having been made unless the deposit and fees (see above) have been paid in full.
You may not withdraw your bankruptcy application. If you become able to pay your debts or a bankruptcy petition against you is presented to court before the adjudicator decides the application, you must inform the adjudicator.
An adjudicator has no discretion whether or not to grant a bankruptcy order. If the prescribed conditions are met, they must grant it; if not, they must reject it. The bankruptcy order will be granted if:
The adjudicator must decide within 28 days from the date that the bankruptcy application is made. If the adjudicator asks for more information from you after 14 days from when the application was made, the 28 days will be extended by 14 days. If the adjudicator fails to decide within this period it will be regarded as a refusal to make the bankruptcy order.
The adjudicator will give you reasons if they refuse to make the bankruptcy order. You may request the adjudicator, within 14 days from delivery of the notice of refusal, to review the decision. The adjudicator can't consider any new information during the review process. If the adjudicator confirms the refusal you may appeal to court within 28 days from the date that the confirmation of the refusal was delivered to you.
If the adjudicator makes the bankruptcy order you will be given a sealed copy of it. You can also access the order via the online system. Once the order is made it will be passed to the Official Receiver (OR) who will contact you to advise the next steps.