In many cases, bankruptcy occurs simply because funds cannot be raised quickly enough to settle debts before a bankruptcy order is made by the Court. Whilst the bankrupt was asset rich, he was also cash poor and unable to obtain the professional advice and assistance desperately needed to enable him to unlock the equity in his assets, pay the debts and avoid bankruptcy.
Even after a bankruptcy order has been made, application can still be made to the Court for an annulment of the order. The Court may annul a bankruptcy order if it at any time it appears to the Court:-
- that, on grounds existing at the time the order was made, the order ought not to have been made; (S282(1)(a) Insolvency Act 1986).
or
- that, to the extent required by the rules, the bankruptcy debts and the expenses of the bankruptcy have all, since the making of the order, been either paid or secured for to the satisfaction of the Court. (S282(1)(b) Insolvency Act 1986).
- It is also possible to obtain an annulment on the grounds that an Individual Voluntary Arrangement (IVA) has been approved by the required majority of unsecured creditors. (S261 Insolvency Act 1986)
The Court may also annul a bankruptcy order whether or not the bankrupt has been discharged from the bankruptcy.
(282(3) Insolvency Act 1986)
To succeed on the first ground, the Court will need to be satisfied that at the time the order was made there existed some reason why the order ought not to have been made. Usually, this is based upon some irregularity or defect in the bankruptcy proceedings such as the petition debt being less that the minimum amount, the order is against the wrong debtor, or there is some irregularity in the service of the Statutory Demand.
The more common ground for applying to annul is that the debts etc have all been paid or secured to the satisfaction of the Court. Third Party funds (from friends and/or family) will need to be raised but in many cases, a bankrupt has assets, which, although now vested in the Trustee, can still be used to raise the required funds with which to pay off the bankruptcy.
On the granting of an annulment, the bankruptcy is deemed never to have occurred and all assets are returned. This contrasts with a discharge where the bankruptcy remains on the record and the assets are not returned save where there is a surplus after paying all the debts, costs and expenses. There can therefore be significant benefits in obtaining an annulment rather than a discharge.
We have extensive experience is obtaining annulments and raising funds (through specialist Financial Advisors) in the above circumstances. We can also help reduce the total sums required by minimising and in some cases avoiding liability to pay the Secretary of State Fee and/or Statutory Interest.
An initial no obligation telephone discussion is free, so why not call or email David Cousen.
T: +44 (0)161 833 0578
E: david.cousen@fdl-law.co.uk
To enable us to make a preliminary assessment of your circumstances and advise whether you might be able to apply for an annulment, we will initially need the following information:-
- Total Amount Owed.
- Total Outstanding on your Mortgage.
- Total Outstanding on any other Debts Secured Against your Property.
- Approximate Value of your Property.
Our experienced staff are ready and waiting to help so contact us today and take the first step (along the road) to a new beginning.
