Why were you denied from declaring bankruptcy?

denied bankruptcy

Once you have decided that bankruptcy is your best course of action, you might be surprised to find that you’ve been denied the application. You are likely to be confused as to why you’ve been refused bankruptcy. Let our experts explain why this might have happened.  

Why would someone be restricted from filing for bankruptcy?

There are a few reasons why you could be restricted from filing for bankruptcy. Overall it comes down to the decision of your adjudicator. Your adjudicator officer’s role is to provide impartial advice to resolve the issues of the debtor and creditor. If you have filed and been denied bankruptcy here are a few potential reasons why:

  • They believe that another form of insolvency management suits your case such as a DRO
  • They believe you can pay off your debt, this could be due to the money you have in your savings 
  • Your insolvency form was filled out incorrectly or missing necessary information
  • You are not a UK resident or you have applied for bankruptcy in the wrong area 

What can you do if your bankruptcy is refused?

If you are adamant about filing for bankruptcy, you can appeal the ‘notice of refusal’ that your adjudicator will give you. You have 14 days to appeal this after the notice has been served. This appeal should list any information you believe the adjudicator was unaware of when they made their decision. You can only do this once. 

If once again you are denied you can appeal to the court, you have 28 days to do this and if you lose you can be hit with added court fees.

What percentage of bankruptcies are denied in the UK?

The estimated figures show that less than 1% of UK bankruptcies are denied in the UK. However, if you are denied, you should be aware it’s likely for a good reason. Remember that your adjudicator provides impartial advice, meaning that both the creditor and debtor should benefit from their decision.  

Alternatives to bankruptcy

Previously in our article on the benefits of filing for bankruptcy, we covered the other options available for those dealing with insolvency. We highly recommend you read that article but here’s the information condensed:

Administration Order

  • Pay your debt monthly over an agreed fixed period
  • £5,000 worth of debt limit 
  • Damages your credit less than bankruptcy 
  • Money goes from you to the court to the creditors
  • Typically the best option if you owe less than £5,000 to creditors

Debt Consolidation

  • Goes past the administration order max of £5,000
  • One individual loan that allows you to pay back all your creditors 
  • Helps you focus on one individual payment with an interest rate lower than your current debt
  • A contractual period is set up for the repayment of debt
  • Loan security is made in the form of collateral with valuable assets such as property or cars
  • Damages your credit less than bankruptcy 
  • Typically the best option if you owe money to multiple creditors 

Individual Voluntary Agreement (IVA)

  • Agreement settled between the creditor and the debtor 
  • The debtor makes monthly repayments
  • Lets the debtor retain their assets
  • Debt interest cannot change while the agreement is in place
  • Typically the best option for those trying to retain their assets

What should you not do before filing bankruptcy?

You simply need to be insolvent to declare bankruptcy. All this means is you need more money going out than coming in on a regular basis and you can’t pay any of your current debt. Then with £680, you can start the application process.

As you can see, the requirements are quite basic. However, there are things you cannot do while filing for bankruptcy such as:

  • You shouldn’t try and hide any bank accounts
  • You shouldn’t try and hide any physical belongings
  • You shouldn’t try and hide any property

How can Asset Solutions help you?

At Asset Solutions, we can help you discuss ways of deciding if declaring bankruptcy is the right decision for you. We can assist you at any stage in the insolvency process, discuss why you may be refused bankruptcy or even annul the process of bankruptcy. It might not be too late to get a solution to your insolvency.

We can discuss some alternatives to bankruptcy and work out a plan for you. Make sure you call us on 0800 689 3861, so we can solve help solve your financial issues. Asset Solutions employ professionals that are always ready to help you.