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A discharge releases the bankrupt from the bankruptcy, which in most circumstances is automatic after 1 year. However, assets that vested in the trustee at the commencement of the bankruptcy continue to form part of the bankrupt estate until they are realised or otherwise dealt with. In other words, a discharge does not reverse the vesting of the bankrupt’s estate upon his trustee.

On the other hand, an annulment cancels the bankruptcy entirely—legally treating it as if it never existed.

Common grounds for annulment include:

• The bankruptcy order should not have been made in the first place (e.g., the debt was paid or not owed).
• The bankruptcy debts and expenses of the bankruptcy have all, since the making of the order, been either paid or secured to the satisfaction of the court.
• A formal agreement has been reached with creditors, often through an Individual Voluntary Arrangement (IVA) or settlement.

You must apply to the court for an annulment of your bankruptcy. The application should be supported by a witness statement. Here at F Barnes, we can assist you with the procedure for annulling your bankruptcy.

Your name will be removed from the Individual Insolvency Register, however, if your bankruptcy has already been advertised or disclosed, those notices cannot be undone.

The timeframe varies depending on the grounds for annulment. If all debts have been repaid, the process may be relatively quick. If the annulment is contested, it can take longer.

Usually, a creditor who is owed £750 or more on an undisputed debt can present a petition to the court for the company to be wound up.

The company has a short window of time to respond. The petitioner can advertise the petition in The Gazette after service of the petition, after which banks usually freeze the company’s accounts, making it very difficult to trade. If the court grants the petition, the company will be liquidated. It is therefore important to take prompt and immediate action upon service of a winding up petition.

Yes, in some circumstances. Options may include:

• Paying the debt in full.
• Negotiating a repayment plan or settlement with the creditor.
• Applying to court to challenge the petition if the debt is genuinely disputed.
• Proposing a Company Voluntary Arrangement (CVA) to restructure debts.

If no action is taken, the court is likely to grant the order, and the company will be forced into liquidation. Directors may also face investigations into their conduct, which could lead to personal liability or disqualification.

Yes. The process is highly technical and strict deadlines apply. Here at F Barnes we can help you assess your options, negotiate with creditors, and represent you in court to protect your company.

Anybody who is owed money by an individual or a company can serve a statutory demand.

If you or your company receives a statutory demand, you have 21 days from the date of service to either: (a) pay the debt in full; or (b) reach a repayment agreement with the creditor. Alternatively, within 18 days from the date of service you can apply to the court to have the statutory demand set aside.

Ignoring a statutory demand could result in the creditor applying to the court for your bankruptcy (if you are an individual) or for your winding up (if you are a company).

A statutory demand may be set aside on one or more of the following grounds:

(i)  if the debt is disputed on substantial grounds.

(ii) if the debtor appears to have a counterclaim, set off or cross demand which equals or exceeds the amount of the debt specified in the statutory demand.

(iii) if the creditor holds security equal to or exceeds the value of the debt.

(iv) if the court is satisfied on some other grounds that the demand ought to be set aside.

You can issue one if:

• The debt is due and payable
• The amount is fixed and certain
• The debt is not disputed

For individuals, the debt must be £5,000 or more to proceed to bankruptcy. For companies, the threshold is £750 for winding-up.