Creditor's bankruptcy petition

Creditor's bankruptcy petition



Consider whether the EC Regulation on insolvency is applicable as that will take precedence in determining whether the court has jurisdiction to consider the bankruptcy petition. The EC Regulation on insolvency aims to improve the efficiency of insolvency proceedings where there is a cross-border element. Under these regulations the court in England or Wales will have jurisdiction if the debtor has their centre of main interest (COMI) in England or Wales, even if they don't live there.

Therefore, a bankruptcy petition may be presented by the creditor to court only if the centre of the debtor's main interests is in England or Wales. If that is not the case and the debtor's COMI is also not in a member state of the European Union which has adopted the EC Regulation, then the court will still be able to hear the petition if:

  • the debtor is domiciled in England and Wales, or
  • at any time in the period of 3 years ending with the day on which the petition is presented, the debtor:
    • has been ordinarily resident, or has had a place of residence, in England or Wales, or
    • has carried on business in England or Wales.

Carrying on business includes:

  • the carrying on of business by a firm or partnership of which the debtor is a member; and,
  • the carrying on of business by an agent or manager for the debtor or for such a firm or partnership

The debt

If a creditor (or a group of creditors together) wants to apply for a bankruptcy order their petition must show, amongst other things that the debtor owes them £5,000 or more in total and that for each debt specified in the petition:

  • it is an unsecured and liquidated (i.e. fixed) amount;
  • it is due and payable immediately or payable at some certain future time;
  • the debtor appears either to be unable to pay the debt or to have no reasonable prospect of being able to pay the debt; and
  • there is no outstanding application to set aside a statutory demand served in respect of the debt.

Proving the debtor's inability to pay

To prove to court that the debtor is unable to pay their debts a creditor usually relies upon one of the following:

The debtor's failure to comply with a statutory demand for payment of a debt

The form of statutory demand used will depend on whether:

  • the debt is a specific amount payable now Form 6.1;
  • a specific amount is payable now following a judgment or court order Form 6.2; or
  • a debt is payable at a future date Form 6.3.

The creditor has to show that the statutory demand was served on the debtor. This is done by completing either:

  • a Certificate of personal service of statutory demand Form 6.11; or
  • a Certificate of substituted service of statutory demand, where personal service was not possible and it was posted to the debtor Form 6.12.

A creditor should take all possible steps to serve the statutory demand personally on the debtor. This means that personal calls should be made at all known residences and places of business of the debtor in an attempt to serve the demand personally. If those attempts fail, the creditor must take every further reasonable step to make sure that the statutory demand does come to the attention of the debtor. These steps could include writing a letter to the debtor to advise of the failed attempts to serve the demand and giving at least 2 business days' notice when a further attempt will be made. It should give the debtor the opportunity to suggest a different time or place if the proposed appointment is not convenient. The letter should also advise that if the further attempt is also unsuccessful the demand will be served by advertisement in the media or by post and the court will be asked to accept that as proper service of the demand. The letter should specify which method will be used.

When attending any appointment made by letter, inquiry should be made as to whether the debtor has received all letters left for them. If the debtor is away, inquiry should also be made as to whether or not letters are being forwarded to an address within the jurisdiction (England and Wales) or elsewhere.

If personal service remains unsuccessful and the debtor is represented by a solicitor, the creditor should also attempt to obtain personal service through that solicitor or for the solicitor to accept service on behalf of the debtor.

A note of the way in which the statutory demand was served must be kept. This note should record the steps taken in order to serve it, the times and dates of service and the details of any people involved. The reason for this is that the Certificate of service of the statutory demand will require these details to be supplied.

However, where the statutory demand is for payment of a sum due under a judgment or order of any court and the creditor knows, or believes with reasonable cause that the debtor has absconded or is keeping out of the way in order to avoiding service, and there is no real prospect of the sum due being recovered by execution or other process, then the creditor may, without taking the steps discussed above, advertise the demand in such manner as they think fit. The time limited for compliance with the demand runs from the date of the advertisement's first appearance.

A formal process issued to enforce a judgment debt being unsuccessful

To show the court that the judgment debt has not been satisfied an enforcement officer's 'return' (a statement showing how much was recovered (if any) and how much has been paid towards the judgment debt (if any), costs, interest and the enforcement officer's charges) can be used as it would set out the value of the court judgment and the fact that it could not be satisfied as enough assets couldn't be recovered from the debtor.

The petition

The petition form used by the creditor will depend on which of the above 2 reasons the creditor is relying upon to prove that the debtor is unable to pay their debts.

If it is the failure of the debtor to comply with a statutory demand then Form 6.7 will be used.

If it is that enforcement of a judgment debt has been unsuccessful then Form 6.9 will be used.

The statement of truth

The petition must be accompanied by a statement of truth Form 6.13A in which the truth of the petition is confirmed.

The searches

Before the creditor can present the petition to court a check needs to be done to make sure that the debtor is not already subject to a bankruptcy order or that there hasn't been any other bankruptcy petitions against the debtor in the past 18 months.

This check is done by completing Form K16, to do a bankruptcy official search. This must be done within 7 days of the date that the petition is being presented to court. By completing form K16 a search is effected with the Chief Land Registrar in the register of pending actions for pending bankruptcy petitions presented against the debtor.

If a bankruptcy order is already in place a petition can't be proceeded with. However, the creditor can register as a creditor in the existing bankruptcy. If there is an ongoing application for bankruptcy it would be cheaper to support that petition instead of continuing with a new petition.

A creditor presenting a petition must confirm to the court that these searches have been done and that if an existing application was found that the creditor is proceeding with a new petition accepting the risk of incurring costs.

Cost of the creditor's bankruptcy application

When presenting the bankruptcy petition to court both a deposit to cover part of the costs of administering the bankrupt estate and a court fee must be included. The amount of these costs and fees are available online.

Which court to apply to

If the application falls outside the London insolvency district

Bankruptcy petitions must be presented to the county court hearing centre, dealing with insolvency applications, that is closest to the place where the debtor resides or has a place of business. If the debtor resided at more than one address or had a place of business in more than one location then the relevant address to determine the correct county court hearing centre is the one where they were for the longest during the preceding 6 months. For some county court hearing centres insolvency petitions have to be presented at alternative courts, so it would be best to use the Court and Tribunal Finder to make sure the correct court is used.

Where the debtor no longer resides or carries on business in England or Wales but did so at some time during the preceding 6 months the petition can be presented either to the relevant County Court (see above) or the High Court.

If the application falls within the London insolvency district

If the application is made by a creditor the petition must be presented to the County Court at Central London if the unsecured liabilities are less than £50,000 otherwise to the High Court.

A debtor's affairs fall (or are deemed to fall) within the London insolvency district only if one of more of the following conditions apply:

  • Where the debtor is an English resident with a residence or business in London. This means that they live in England and Wales, and has lived or carried on business within the London insolvency district, either:
    • for the greater part of the 6 months before the issue of the bankruptcy petition; or,
    • for more time in the 6 months before the issue of the bankruptcy petition than they have lived or carried on business anywhere else.
  • Where the debtor is an overseas resident with a residence or business in London or centre of main interests in England and Wales. This means that, either:
    • they have, in the 6 months before the issue of the bankruptcy petition against them, lived or carried on business in the London insolvency district; or,
    • their centre of main interests (COMI) is within England or Wales.
  • Where the debtor's residence or place of business is unknown the debtor's affairs are deemed to fall within the London insolvency district.
  • Where the debtor is a member of an insolvent partnership. This means that they are a member of a partnership that is being wound up by the High Court in London or is the subject of a winding-up petition presented in the High Court in London.
  • Where petitions are presented by government bodies a debtor's affairs fall within the London insolvency district if a government department presents the bankruptcy petition after either:
    • an unsatisfied statutory demand, which stated that the government department would present a bankruptcy petition to a court within the London insolvency district if the debtor failed to pay the sum demanded; or,
    • the unsatisfied execution or other process to enforce a judgment or court order in favour of the government department.

The London insolvency district




The County Court at Central London

Clerkenwell and Shoreditch



Mayor's and City of London Court


West London