The Bankruptcy Master released new guidance on bankruptcy petitions on 10 May 2022 and has set out a key date that will see the restrictions on new creditor’s bankruptcy petitions being removed from 5 September 2022.

Although the restrictions will be removed on bankruptcy petitions, which are applicable for debts against individuals for sums over £5000.00, the guidance sets out two requirements that must be adhered to before a petition can be issued:

1. The petition debt is grounded on a court judgment, decree or other court order
2. The petition is grounded on a statutory demand dated and served on or after 1 June 2022

However, following a meeting with the Bankruptcy Master on 12 May 2022, it appears that due to the backlog of HMRC and LPS (Rates) bankruptcy petitions filed prior to March 2020, no new HMRC or LPS petitions will be permitted until further guidance is issued.

There has been no removal of restrictions on creditor’s winding-up petitions against companies. It is anticipated that this will follow once legislation (already enacted elsewhere in the UK) is in place in Northern Ireland.

As a practical guide for creditors, if you wish to prioritise and get ahead of other creditors, debts should be pursued in the applicable court immediately so that the appropriate judgement or court order can be obtained in line with the above timelines and Guidance.

If you or your business is affected by any of these issues or require assistance please contact the Debt Recovery & Insolvency team at MKB Law to discuss your needs.