You’ve decided to file for bankruptcy, but something happens in between the day your solicitor enters the file into court and the day the bankruptcy is granted to make you change your mind. Why would you need to stop your bankruptcy - which is actually called a reversal or annulment? There are three major reasons why you would want to do this:
- The bankruptcy order was not made properly because the proper steps were
not taken by your solicitor to obtain the order;
- You have paid all of the debts, fees, and expenses of the bankruptcy in full or to the satisfaction of the court;
- You have arranged an Individual Voluntary Arrangement with your creditors.
Only the courts can order an annulment of your bankruptcy proceedings, so if any of the above has happened before the bankruptcy goes all the way through you need to immediately contact the courts where the bankruptcy was to take place and apply for an annulment. You will need to get an application from the courts that applies to your particular reason for asking the annulment, and you may need to also provide them with a witness statement or affidavit to back up your claims. You should also make sure that you notify the Official Receiver handling your bankruptcy of the annulment application.
- Make sure you also have all of the additional paperwork you need that shows where your debts have been paid in full or secured, or where you have entered into an IVA to be sent along with your application. These items are very necessary to convince the courts to annul your bankruptcy and possibly save your credit record or embarrassment because the order was not obtained properly. It is important that you also make any appointments with the Official Receiver that you have scheduled in order to present him or her with the information they need. The court may delay annulling your bankruptcy until the Official Receiver tells them that you have met with them with the right paperwork.
If your bankruptcy is annulled, you will be returned to pre-bankruptcy status with all of your creditors. The property that has been disposed of by the Official Receiver and trustee will stay in effect and applied to your debts. You cannot get them back, however all other assets that are currently being held by the courts will be returned to you and once again you will be liable for your debt that is not being discharged via the now annulled bankruptcy order.
As long as you act immediately upon realising that you need to have your bankruptcy annulled you can apply for a ‘stay of advertisement’ with the courts. You can do this before you even apply for the annulment and inform the Official Receiver of the request and that you are sending in an application for bankruptcy reversal. If you missed getting the advertisement stayed and if the bankruptcy is cancelled because of payment of debt or the making of an IVA, the record of the bankruptcy cancellation will be removed from the public register two years after the cancellation date. If the bankruptcy is cancelled because it should not have been made, the record will definitely be removed immediately.
