If a creditor wants to make you bankrupt

A creditor can make you bankrupt if you owe them £5,000 or more. A creditor is a company or a person you owe money to.

They need to apply to a court to do this.

Two or more creditors can join up to make the £5,000 limit if you owe each of them less than this.

If you’re facing bankruptcy you should contact a money adviser right away.

Failed protected trust deed

Creditors can make you bankrupt if you set up a protected trust deed and do not make the payments.

Read more about protected trust deeds.

Before a creditor can make you bankrupt

To apply to a court the creditor needs to prove you’re unable to pay the debt. This is called ‘apparent insolvency’.

To do this the creditor needs to send you one of these documents:

1. Charge for Payment – giving you 14 days to pay the debt
2. Statutory Demand – giving you 21 days to pay the debt

A Sheriff Officer will bring the document to your home.

If you get one of these documents you should contact a money adviser right away.

The creditor must also send you a copy of the Debt Advice and Information Package. This tells you where you can get help.

If you do not meet the payment deadline

If you do not pay the debt on time the creditor can apply to the court to make you bankrupt.

If they do this you’ll get a ‘Warrant to Cite’. This is a bankruptcy hearing court date.

Bankruptcy hearing (court date)

At the hearing you can explain why you think you should not be made bankrupt. The court will consider:

• the details of the debt
• how much you can afford to pay
• if the creditor has been fair

At the hearing the court may:

• agree to make you bankrupt
• allow you more time to pay or to apply for another debt product ('continue the case')
• decide you should not be made bankrupt (‘dismiss the case’)

If you’re made bankrupt

The court will pass your case to a part of Scottish Government called Accountant in Bankruptcy (AiB).

A trustee will manage your bankruptcy including any payments you need to make to the creditors.

They'll contact you to ask about your:

• debts
• assets (things you own like savings and property)
• income (including pensions)
• outgoings

Read more about what the trustee does.

You must cooperate with the trustee or you could face further legal action.

Read more about what happens when you go bankrupt.

If you disagree with the court’s decision

You can appeal if you do not agree you should be made bankrupt.

To do this, you need apply to the court for either a ‘recall’ or a ‘reduction’. You need to prove why you should not have been made bankrupt.

Check where to get help with a legal problem