If you receive a liability order for an outstanding debt over £5000, this allows us to enforce either:
- bankruptcy proceedings against you,
- or, insolvency proceedings in the case of a company.
The council will refer cases to a suitable solicitor. They have authority to deal with all bankruptcy and insolvency matters on behalf of the council.
What happens if a bankruptcy order issued
If you receive a bankruptcy order, you are subject to the following action;
- a freeze on your bank accounts so you are unable to withdraw or transfer funds
- the bankruptcy order may force you to sell your home
- you will lose your credit rating and be unable to apply for credit for up to 6 years
- you will lose any assets acquired during the term of your bankruptcy. This can include inheritances, other financial investments, land and property
- you will lose anything you are leasing or bought on hire purchase, such as your car
- you will lose professional and business status
- are no longer allowed membership to many associations and societies
- you are not allowed to be a company director
What happens if you receive an insolvency order against your company
If you have received an order against your company, you are subject to the following action:
- your company is declared insolvent
- you are not allowed to be a company director
- a freeze on your bank accounts so you are unable to withdraw or transfer funds
- the bankruptcy order may force you to sell your home
- you will lose professional and business status
- are no longer allowed membership to many associations and societies
How to prevent us from obtaining a bankruptcy or insolvency
You will receive a statutory demand, which gives you 21 days to pay the full amount owed. You must pay the debt in full within the 21 days to stop the bankruptcy or insolvency proceedings. You must direct payment to the solicitors and include any court fees and costs added.
Even if you pay the debt in full, the bankruptcy or insolvency order will stay on your credit file for 6 years.
If you cannot pay the debt in full
You must direct all payments and offers of payment to the solicitor, do not contact the council. If you are unable to clear the balance, you must contact the solicitors immediately. They will consider any proposals for you to make a payment arrangement.
It is important not to ignore the statutory demand, bankruptcy or insolvency letters. You could prevent further proceedings by acting straight away.
