In a very recent case, the High Court has dismissed a Bankruptcy Order made against a debtor on the grounds that the debtor had cross-claims against the creditor that had a real prospect of success and that the County Court ought to have given the debtor the chance to substantiate his cross-claims by adducing evidence. In other words a Bankruptcy Order should not be made without the Court considering evidence of the alleged cross-claims.
The lesson here for creditors is that if your debtor alleges that he has a cross-claim against you which has some real prospect of success, you can expect the Court to hold an enquiry into that cross-claim which will make the procedure more expense and more time consuming for you with the risk that your Bankruptcy Petition might be dismissed.
If you are a debtor facing a Bankruptcy Petition, it is always worth considering whether you have a genuine cross-claim against the creditor.
For further information about any issues raised in this article, please don't hesitate to contact Nick Lambert on 0114 266 6660, alternatively email [email protected].
