Can You Get Bankruptcy Cancelled?

bankruptcy cancelled

Bankruptcy is not always set in stone. In some circumstances, you may be able to get bankruptcy cancelled by making an application to the court that originally made you bankrupt. The cancellation of a bankruptcy order is referred to as the annulment of a bankruptcy order. This blog will take you through the process of annulling a bankruptcy and answer the most important questions surrounding the process.

When Can I Cancel a Bankruptcy? 

Notably, you cannot simply annul a bankruptcy order because you regret your decision. You can only apply to have your bankruptcy annulled for the following reasons:

  • The bankruptcy order should not have been made in the first place. The creditors who bankrupted you may not have followed the correct procedure or, for instance, you owed less than £5000.
  • You have paid back all your debts and the Insolvency Service’s costs in full or have made arrangements to secure them.
  • You have agreed to an Individual Voluntary Arrangement (IVA) with your creditors to pay all or part of your debts. This is an option as long as you have enough money left after paying all your living expenses to make regular payments.

How Do I Apply to Cancel a Bankruptcy?

How you apply to cancel a bankruptcy depends on the circumstances under which you are applying.

You Think the Bankruptcy Order Should Not Have Been Made

In this case, you should head to the GOV.UK/HM Courts & Tribunals Service website and complete the IAA form. Write a witness statement explaining why the bankruptcy order should not have been made. A date for a court hearing should then be set. Make sure you notify the official receiver or bankruptcy trustee at least 28 days in advance and send them a copy of the witness statement and application form. Finally, show up for your court hearing.

You Have Fully Paid Off Your Debts and Expenses

You should follow the same process that has been outlined above. Namely, fill in the IAA form and provide details of payments that you have made alongside the proof of these payments. Again, make sure that you notify the official receiver or bankruptcy trustee at least 28 days before your court hearing.

You Have Agreed to an IVA

When you have already agreed upon a proposal for an IVA with your creditors, your insolvency practitioner (IP) will deal with the annulment. Note that you or your IP must wait until 28 days after your creditors have agreed to your proposal to apply to annul the bankruptcy order.

What Happens Next?

If your application is successful, then you will be put back to the same legal position as you would have been had the bankruptcy order never been filed. However, not everything can be reversed so easily. Most importantly, you will still lose any property or belongings that the official receiver has already sold on.

Seek Expert Advice

Bankruptcy has huge ramifications even if you can get it cancelled. Therefore, you must seek expert advice before it gets to that stage.

If you are worried about debt, bankruptcy or possible insolvency, contact Asset Solutions today at 0800 689 3861. Our experienced team members provide unrivalled assistance to individuals throughout the entire insolvency process and help to stop bankruptcy.

We understand that anyone facing problem debt is likely to feel overwhelmed and intimidated. That’s why we’re here to support you throughout the process and help you achieve the best results possible for your situation. Contact us today for more information.