Can Your Bankruptcy Application be Rejected?
- 28 Oct 2021
It is unlikely your bankruptcy application will be rejected. However there are some circumstances where this might happen.
Included in this article:
- How is a Bankruptcy Application reviewed?
- Will your application be rejected if your payments are up to date?
- What if you live outside the UK?
- Could Bankruptcy be refused if it is not your only option?
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The information given on this page relates to going bankrupt in England or Wales. The process in Northern Ireland and Scotland is different.
How is a Bankruptcy Application reviewed?
When you apply to go Bankruptcy in England and Wales you do not have to go to Court. The process is carried out on-line. After your application is submitted it is reviewed by an Adjudicator.
You will be made bankrupt as long as you meet certain criteria. You must be insolvent (unable to pay your debts), not currently subject to a Debt Relief Order and your centre of main interest must be in England or Wales (although there are certain situations where this does not have to be the case).
When making their decision the Adjudicator does not consider the reasons for your debt or whether a different solution might be better for you. If the above criteria are met your application is likely be granted.
The Adjudicator cannot advise you on whether Bankruptcy is right for you. Need to speak to someone? Give us a call (0800 044 3194).
Will your Application be Rejected if your Debt Payments are up to date?
You can go bankrupt even if your payments are up to date. The fact you have paid them on time up until now does not mean you can pay your debt. It is likely the only way you have managed to do so is by borrowing more each month.
When considering your application the Adjudicator will check to see if you are able to pay your debt without borrowing more (known as being solvent). Given it is clear you cannot maintain your payments without doing this they will accept your application.
Where you are aged 55 or over and have a private pension they will also look at the value of the fund. If it is more than the debt you owe they could reject your application on the basis that you could withdraw funds from your pension to pay your debts.
If you cannot afford to maintain your payments without borrowing more your bankruptcy application will not be rejected because your payments are up to date.
Will your Bankruptcy Application be Rejected if you live outside the UK?
If you want to go Bankrupt where you live is very important. In order to qualify your Centre of Main Interest (COMI) must be in England or Wales.
Generally speaking your COMI will be in England or Wales if you have lived here for the greater part of the last 6 months. In other words for at least the last three months and one day.
If you recently moved away from the UK and now live outside the EU you still qualify for Bankruptcy for 3 years from the date you left. However if you are living in another EU country your application will be rejected.
You do not have to be a British National to go Bankrupt in England and Wales. You can take advantage of our bankruptcy laws as long as you move and live here for 6 months.
Could your Application be Rejected if Bankruptcy is not your only Option?
The Adjudicator is not required to consider whether or not Bankruptcy is the best solution for you. They will accept your application and make you bankrupt regardless as long as the criteria mentioned above are met.
For example if your debt is less than £20,000, you have no assets and your surplus income is less than £50 a month a different solution such as Debt Relief Order might be better for you. However your bankruptcy application would still be accepted.
The Adjudicator is not required to take other possible solutions into account when making their decision. As such if you are unsure whether or not you should go bankrupt you MUST take expert advice before submitting your application.
If you are unsure as to whether Bankruptcy is right for you speak to us BEFORE you submit your application. The Adjudicator will grant your application even if a better solution could be available.
I am just about filling out a bankruptcy application form but it disturbs me due to the fact I sold my house 2yrs ago and got about 25ground which I have long used in settling some individual debt, if not able to give proper account will this not lead to my bankruptcy being rejected. I will appreciate your respond pls.
Hi Mike
Your application will not be rejected. However, you MUST ensure that you do not submit your application until at least 2 years have passed since you paid off the individuals you owed money to. If you go bankrupt within 2 years of the transactions, they will be treated as preferential payments. The OR can then write to the individuals and demand the repayment of the money. They can take legal action if necessary.
I would strongly advise you not to go bankrupt without taking further advice. If you want to discuss this please call me (0800 044 3194)
I have no way of paying for a bankruptcy unless I use a credit card, hence adding more debt. Would this be a disadvantage to my bankruptcy application?
Hi Daniel
This is a question that comes up a lot. The bottom line is that you can to borrow the money you need to pay your bankruptcy application fee. Your application will not be dealt with any differently based on where the money to pay the fee came from.
Whether you borrow the money from a friend, family member or use available credit on a credit card or overdraft it really does not make a lot of difference. Lets face it you could just have easily used this credit to help you cover your creditor payments for another month or payed your household bills thus freeing up cash from your income to pay the fee. It is as long as it is short.
Ultimately the official receiver will understand that you borrowed a little more to stop the overall problem becoming any worse.
Hi
I’m currently trying to get a debt relief order but I’m struggling to get them the information they want as my bank accounts have no been closed by the banks and they will not give me old bank statements.
I have started filling out the bankruptcy form online but now concerned my bankruptcy application will be rejected because of this
Hi Leanne
Getting a DRO can be frustrating. The bankruptcy application process is much easier. If you have no assets to lose and little or no surplus income then the outcome of the two solutions is basically the same. It is just that unfortunately bankruptcy costs more.
Once you have completed your bankruptcy application and paid the fee you can submit. As long as the form is completed correctly you will almost certainly be made bankrupt the next working day. You will not be asked to provide bank statements or any other documentation at this stage unless there is a problem identifying you from the address you have given.
The official receiver may ask you for bank statements after you are bankrupt. However if you can’t get them you simply explain why. The can get them direct from the bank themselves if they really need them so its no issue.