News Article

Debt Collection

Enforcement when the debtor is bankrupt

By CreditMan Thursday, August 25, 2011

by David Carter Managing Director of the Sheriffs Office.

While bankruptcy will offer protection to a debtor when they are unable to pay their debts, this does not mean that the individual is protected indefinitely from enforcement action. It very much depends when the debt was incurred, and what assets the bankrupt has available for seizure.

Debts incurred before bankruptcy

If a debt is incurred before the debtor is made bankrupt, then that debt will be included in the bankruptcy petition and handled by the Official Receiver, along with all other debts owing. Under these circumstances, further enforcement action is not possible.

Debts incurred after a bankruptcy order

However, if the individual subsequently incurs further debts, after the bankruptcy order, then you can use the normal channels to obtain a judgment and enforce it, including the transfer to the High Court for enforcement by High Court Enforcement Officer (HCEO).

Any assets left?

However, it is worth bearing in mind that the debtor may have very few assets available for seizure. You might want to find out more about their financial situation before continuing with enforcement; for example, online checks or applying for an oral examination after judgment has been awarded.

Bankruptcy Restrictions Order

The bankrupt may also be subject to a Bankruptcy Restrictions Order (BRO), but this will make no difference to the enforcement of the judgment. However, one of the restrictions of the BRO may be that the individual must disclose their status as a person subject to bankruptcy restrictions to a credit provider to get credit of £500 or more. If you provided them with credit and they did not disclose this, then the debtor has committed a criminal offence.

We will cover BROs in further detail in another article.

Disclaimer: The statements and opinions expressed in this article are those of the author and do not necessarily reflect those of Sheriffs High Court Enforcement Ltd, trading as The Sheriffs Office. Sheriffs High Court Enforcement Ltd does not take any responsibility for the views of the author. The author will not be held responsible for any comments posted by visitors to this site. Please note that this article does not constitute legal advice. The author has used his best endeavours to make this article as accurate and complete as possible, but requests that the reader be aware that the law of England and Wales frequently changes. The author strongly advises the reader to take legal advice before embarking on any enforcement action.