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Inside a British county court hearing room for a bankruptcy creditors petition

Bankruptcy Hearing – Creditors Petition

Updated for 2026

If a creditor believes you owe them money and you have not repaid it, they can apply to the court to make you bankrupt. This is known as a creditor’s petition, and unlike a debtor’s petition (where you apply to go bankrupt yourself), it always involves a court hearing.

What Happens at the Hearing?

At the hearing, a judge will review the creditor’s application and decide whether to make a bankruptcy order against you. You will be notified of the hearing date and have the right to attend and present your case.

For the court to make a bankruptcy order, it must be satisfied that the debt is proven and that either:

  • You cannot repay the debt, or
  • Where payment is not yet due, you have no realistic prospect of being able to repay the debt when it falls due.

The creditor must generally be owed at least £5,000 before they can present a bankruptcy petition against you. If you have already repaid the debt in full before the hearing, the case will be dismissed. However, you may still have to pay the creditor’s legal costs if the repayment was made after the petition was presented.

Reasons a Bankruptcy Order May Not Be Made

The court has discretion and may refuse to make a bankruptcy order in certain circumstances:

  • The creditor has unreasonably refused an offer of payment by instalments or a reasonable reduced lump sum to settle the debt.
  • An agreement is reached at the hearing itself for repayment of the debt.
  • You can demonstrate that you have a legitimate counterclaim or dispute against the creditor that equals or exceeds the debt.
  • You are already engaging with a formal debt solution, such as an Individual Voluntary Arrangement (IVA) or a Debt Management Plan (DMP).

What Happens if the Bankruptcy Order Is Made?

When a bankruptcy order is made, there are normally four key elements:

  • A bankruptcy period of 12 months, after which you are automatically discharged (see Bankruptcy Restriction Orders for exceptions).
  • Lump sums may be raised from the sale of your assets, for example your home or car (see Your Assets & Bankruptcy and Bankruptcy & Your Property for details).
  • Monthly contributions from your income if your earnings exceed what you reasonably need for living expenses (see Payments from Income during Bankruptcy for details).
  • Any property you acquire (for example, an inheritance) after the date of the bankruptcy order and before your discharge may also be claimed.

Can You Avoid a Creditor’s Petition?

If you are struggling with debt and worried about a creditor forcing you into bankruptcy, there are steps you can take. Speaking to your creditors early and exploring alternatives to bankruptcy can sometimes prevent a petition being issued. Options such as a Debt Relief Order (DRO) (now free to apply for, with a qualifying debt threshold of up to £50,000) or an IVA may be suitable depending on your circumstances.

If you are considering going bankrupt voluntarily instead, the current application fee is £680 and you can apply online through the government’s Insolvency Service. Visit our Going Bankrupt page for a step-by-step guide.

For more information about what to expect during and after bankruptcy, explore our Bankruptcy Guides.

This page provides general information only and should not be taken as financial advice. If you are unsure about your options, consider seeking guidance from a qualified debt adviser.