Insolvency Update: Bankruptcy Petitions

On 27 March 2015, the government published the Insolvency Act 1986 (Amendment) Order 2015 (SI 2015/922) (“the Order”). The Order will come into force on 1 October 2015. The Order amends section 267(4) of the Insolvency Act 1986 by increasing the bankruptcy level of a creditor’s petition from £750 to £5,000. Therefore, from 1 October 2015, any creditor wishing to petition for a debtor’s bankruptcy will need to demonstrate a debt or debts in the aggregate amount of £5,000 or more, owed by the debtor to the petitioning creditor.

The other provisions of section 267 remain unchanged and any creditor will also need to show that:

(1) the debt is for a liquidated sum owed to the creditor, payable immediately or at some certain future time and is unsecured;

(2) the debt is one which the debtor appears unable to pay or has no reasonable prospect of being able to pay; and

(3) there is no outstanding application to set aside a statutory demand served in respect of the debt.

The Order will apply to bankruptcy petitions presented by creditors on, or after, 1 October 2015.  The current bankruptcy level of £750 will continue to apply to all bankruptcy petitions presented to the court by creditors before 1 October 2015.

Please note that this information is provided for general knowledge only and therefore specific advice should be sought for individual cases.

For further information, please contact Kenny Friday at or Edward Vaughan at