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Insolvency Law Made Clear: Grounds to oppose a bankruptcy petition

Insolvency Law Made Clear: Grounds to oppose a bankruptcy petition

This blog post is one of a series of extracts from Insolvency Law Made Clear: A Guide for Debtors, the plain English, practical guidance for anyone facing demands over a debt they are struggling to pay.

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By virtue of s266(3) of the Act, the court has the power to dismiss a bankruptcy
petition. This power is ‘quite unfettered’, i.e. there is no single list of reasons why
the court may dismiss a petition. However, typically the power is exercised on
one or more of the following grounds:

1. A serious procedural irregularity which prejudices the debtor
2. The debtor has no assets
3. Bankruptcy would be disproportionate
4. The debt is not for a liquidated sum
5. The debt is disputed
6. The debtor is able to pay their debts or has made an offer to secure or compound for a debt which was unreasonably refused
7. The petition is an abuse of process
8. The creditors are guilty of improper behaviour
9. Bankruptcy would have a serious psychological effect on the debtor
10. The petitioner does not attend the hearing
11. An IVA has been agreed
12. The court has no jurisdiction to make the bankruptcy order
13. The debtor lacks capacity

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