What does bankruptcy proceedings mean for me?
If your Council Tax debt is in excess of £5000 and a Liability Order has been obtained by the magistrates' court, we may start bankruptcy proceedings against you if we have tried unsuccessfully to recover the Council Tax debt.
If we take this action, we will pass your account to our solicitors who will send you a statutory demand. If you receive a statutory demand, you should contact us immediately on 01775 761161. An agreement to settle the debt can still be made before we present a petition to the County Court.
If you do not settle the statutory demand, we will present a petition for bankruptcy or liquidation to the county court, which can make a bankruptcy order.
A bankruptcy order can be made even if you refuse to acknowledge the proceedings or refuse to agree to them. You should therefore co-operate fully once the bankruptcy proceedings have begun.
If you are declared bankrupt:
- your bank accounts will be frozen
- the official receiver will investigate your affairs and will control your spending for three years
- you will no longer control your assets, and any asset you might acquire during the term of the bankruptcy, such as inheritances, insurance payouts/maturities, will be lost
- you may not be able to obtain credit for over £500
- your home could be sold to pay your debts