Annulling your bankruptcy

Although a bankrupt may obtain an automatic discharge after one year, true freedom from bankruptcy is achieved by way of an annulment.

An annulment is an effective cancellation of the bankruptcy and restores the bankrupt to a pre-bankruptcy position.

The two most common applications for an annulment are:

· on the grounds that the bankruptcy order ‘ought not have been made’. This is an application under s.282(1)(a) Insolvency Act 1986 and relies upon supportive evidence setting out why you should not have been adjudged bankrupt (for example if you owed less than the bankruptcy threshold of £5,000); or
· that all of the bankruptcy debts (i.e. sums owed to your creditors) and expenses have been paid in full. This is an application under s.282(1)(b) Insolvency Act 1986 and requires close engagement with your Trustee in Bankruptcy.

Alternatively, you may also obtain an annulment of your bankruptcy pursuant to s.261 Insolvency Act 1986 if you are an undischarged bankrupt and your creditors have agreed to an Individual Voluntary Arrangement (IVA).

At Dumonts Solicitors we are regularly asked to provide advice and assistance on the annulment of bankruptcies.

For further information on annulling your bankruptcy please contact Raheel Khan at Dumonts Solicitors.

This article is for general information and does not constitute legal advice.