---
title: "London Bankruptcy Petitions: The New £500,000 Threshold"
url: https://lexlaw.co.uk/solicitors-london/london-bankruptcy-petition-500000-threshold/
date: 2026-11-04
modified: 2026-11-04
lang: en
author: "LEXLAW Solicitors & Barristers"
description: "Since 22 June 2026, a creditor's bankruptcy petition against a debtor whose case belongs to the London Insolvency District must, in most cases, be presented to the County Court at Central London unless the debt is £500,000 or more, in which case it goes to the High Court. The dividing line used to be £50,000. The change moves cases between courts. The £5,000 minimum debt for bankruptcy and the 18 days you have to challenge a statutory demand stay exactly as they were."
categories:
  - "Bankruptcy"
  - "Insolvency"
  - "legal news"
tags:
  - "Bankruptcy Petition"
  - "County Court at Central London"
  - "High Court bankruptcy"
  - "HMRC bankruptcy petition"
  - "Insolvency (England and Wales) (Amendment) Rules 2026"
  - "London Insolvency District"
  - "rule 10.11 Insolvency Rules 2016"
  - "rule 10.4 Insolvency Rules 2016"
  - "rule 12.5 Insolvency Rules 2016"
  - "section 117(2A) Insolvency Act 1986"
  - "section 267 Insolvency Act 1986"
  - "section 268 Insolvency Act 1986"
  - "section 373 Insolvency Act 1986"
  - "set aside statutory demand"
  - "SI 2026/561"
  - "Statutory Demand"
image: https://lexlaw.co.uk/wp-content/uploads/court_ledgers_brass_ruler-1024x576.webp
word_count: 2535
---

# London Bankruptcy Petitions: The New £500,000 Threshold

**Since 22 June 2026, a creditor's bankruptcy petition against a debtor whose case belongs to the London Insolvency District must, in most cases, be presented to the County Court at Central London unless the debt is £500,000 or more, in which case it goes to the High Court. The dividing line used to be £50,000. The change moves cases between courts. The £5,000 minimum debt for bankruptcy and the 18 days you have to challenge a statutory demand stay exactly as they were.**

The people asking about this are usually London residents or business owners who have just been served with a statutory demand or a petition, and creditors deciding where to issue. Many are surprised to find that a six-figure claim, which until June would have been heard in the High Court at the Rolls Building, now starts life in the County Court, and that some court guidance still quotes the old £50,000 figure.

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## What changed on 22 June 2026

The Insolvency (England and Wales) (Amendment) Rules 2026, SI 2026/561, came into force on 22 June 2026 under rule 1(3). Rule 13 makes one substitution: in rule 10.11(1)(a) and (b) of the Insolvency (England and Wales) Rules 2016, for "£50,000" it substitutes "£500,000". We could find no transitional provision in the instrument. If you have been served with papers, our page on [bankruptcy petitions and annulment](https://lexlaw.co.uk/bankruptcy-petition-and-annulment-solicitors/) explains how we act on both sides of these cases, and our [bankruptcy FAQs](https://windinguppetitionsolicitors.co.uk/bankruptcy-advice/) answer the questions debtors ask first.

Rule 10.11(1) now reads that the creditor must present the petition to "the High Court where the debt is £500,000 or more" or to "the County Court at Central London where the debt is less than £500,000". The wording matters at the margin. A petition debt of exactly £500,000 belongs in the High Court, so any guide saying "£500,000 or less goes to the County Court" has the boundary wrong for presentation. Creditors weighing their options should read our guide to [making and serving a statutory demand](https://lexlaw.co.uk/statutory-demand-debt-enforcement-recovery-solicitors-london-advice/) before they choose a court.

## Who falls within the London Insolvency District

The threshold only applies where the case is allocated to the London Insolvency District, an area the Lord Chancellor designates by order under section 374(1) of the Insolvency Act 1986. Rule 12.5(a) of the 2016 Rules allocates a bankruptcy petition to London where, in the six months before the petition, the debtor carried on business within the district for the greater part of that time or for longer than in any other insolvency district, or, if not in business, resided there on the same basis. It also covers debtors who are not resident in England and Wales but who carried on business, or resided, within the district in that period. Where the debtor actually lived and traded is often the first point we test, and our guide to [challenging a bankruptcy petition](https://lexlaw.co.uk/bankruptcy-petition-insolvency-annulment-debt-lawyers-london/) explains why.

Rule 12.5(b) adds creditors' petitions presented by a Minister of the Crown or a Government Department where the statutory demand indicated an intention to petition a court exercising jurisdiction for the London Insolvency District, or where the petition relies on unsatisfied execution under section 268(1)(b). Directors facing personal tax exposure through [personal liability notices for company tax debts](https://lexlaw.co.uk/solicitors-london/personal-liability-notices-plns-guide-2026-what-directors-need-to-know/) often fall into this second category, and our guide on [whether HMRC can make a director or sole trader bankrupt](https://windinguppetitionsolicitors.co.uk/can-hmrc-make-me-bankrupt-directors-sole-traders-bankruptcy-risks-explained/) explains how that exposure turns into a petition.

## Petitions that stay in the High Court whatever the debt

Rule 10.11(2) keeps three groups in the High Court regardless of size. The first is a debtor who is not resident in England and Wales and who, in the six months before the petition, neither carried on business nor resided here, under rule 12.5(a)(v). The second, under rule 12.5(c), is a petition where the creditor cannot find out where the debtor lives or trades, or where the debtor is a partner in a partnership being wound up by the High Court in London. The third is a petition based on a criminal bankruptcy order under rule 12.5(d). Our article on [why owning London property was not enough to serve a bankruptcy petition on a non-resident](https://lexlaw.co.uk/solicitors-london/115m-uk-palace-insufficient-for-service-of-nbd-bankruptcy-petition-on-qatari/) shows how the first group plays out in practice.

Overseas debtors deserve particular care, because service abroad has its own pitfalls and a petition can fail on service alone. For debtors outside England and Wales who are served with a demand, rule 10.1(10) of the 2016 Rules lengthens both the 18 day and 21 day periods by reference to the service-out table in the Civil Procedure Rules. Our guide to [setting aside a statutory demand as an individual](https://lexlaw.co.uk/solicitors-london/setting-aside-a-statutory-demand-as-an-individual/) explains the standard 18 day time limit.

## Is £500,000 the new minimum debt for bankruptcy?

No. This is the most common misreading. The minimum is "the bankruptcy level" in section 267(4) of the Insolvency Act 1986, which remains £5,000. Under section 267(2), the debt must also be for a liquidated sum, unsecured, and one the debtor appears unable to pay, and there must be no outstanding application to set aside a statutory demand for it. A creditor owed £6,000 can still petition. The £500,000 figure only tells that creditor which London court to use. Our guide to [challenging a bankruptcy petition](https://lexlaw.co.uk/bankruptcy-petition-insolvency-annulment-debt-lawyers-london/) sets out the defences that apply at any value.

The search confusion runs further. People often treat bankruptcy and winding up as the same process, but the new rule is about individuals only. Under section 117(2A) of the Insolvency Act 1986, a petition to wind up a company whose registered office has longest been in the London Insolvency District in the previous six months may be commenced only in the High Court, and the £500,000 figure has no part in that. If your problem is a company debt, start with our [winding up petitions practice](https://lexlaw.co.uk/practice-areas/winding-up-petitions-solicitors-london/) and our comparison of a [winding up petition and a County Court claim as routes to recover a debt](https://windinguppetitionsolicitors.co.uk/winding-up-petition-vs-county-court-claim-the-best-route-to-recover-your-debt/).

## HMRC demands and petitions under the new figure

Petitions by a Government Department, which in our practice includes HMRC, are allocated under rule 12.5(b), and rule 10.11(1) applies to that category too. A London HMRC petition for less than £500,000 therefore goes to the County Court at Central London. Our [HMRC enforcement action defence](https://lexlaw.co.uk/hmrc-debt-enforcement-defence-statutory-demand-winding-up-peititon-solicitor-london/) page covers the steps before a petition, and our explanation of [how an HMRC debt becomes enforceable](https://taxdisputes.co.uk/2026/08/how-an-hmrc-debt-becomes-enforceable/) explains when a tax liability is ready to found a demand.

The change also reaches set-aside applications in one specific situation. Rule 10.4(4)(b) sends the application to the court where rule 10.11(1) requires the petition to be presented if the demand comes from a Minister or Government Department, the debt or a part of it at or above the bankruptcy level is the subject of a judgment or order, and the demand gives the judgment details and states which of the High Court or the County Court at Central London the creditor intends to use. Under rule 10.1(2), a Government demand must explain that the debtor may alternatively apply to that court. Our page on the [HMRC statutory demand](https://taxdisputes.co.uk/hmrc-statutory-demand/) covers the grounds for challenge.

## Where to apply to set aside a statutory demand

Outside that Government category, rule 10.4(4)(a) sends the application to the court or hearing centre fixed by rule 10.48, which is generally the debtor's own hearing centre. Rule 10.1(1)(l) requires every statutory demand to name the court or hearing centre to which, "according to the present information", the debtor must apply. Read that part of the demand first. If it names the High Court for a debt well under £500,000, or was prepared on the old figures, take advice before you file. Our guide to [setting aside a statutory demand as an individual](https://lexlaw.co.uk/solicitors-london/setting-aside-a-statutory-demand-as-an-individual/) walks through the application, and our [statutory demand set aside](https://lexlaw.co.uk/set-aside-statutory-demand-insolvency-legal-advice/) page explains how we prepare the evidence.

The grounds have not changed. Under rule 10.5(5), the court may set the demand aside if you have a counterclaim, set-off or cross demand equal to or greater than the debt, if the debt is disputed on grounds that appear substantial, if the creditor holds security and has not dealt with it properly in the demand, or if the court is satisfied on other grounds that the demand should go. Our article on [setting aside a statutory demand before bankruptcy or winding up](https://windinguppetitionsolicitors.co.uk/setting-aside-a-statutory-demand-before-bankruptcy-or-winding-up/) discusses how courts approach a genuine dispute.

## A petition issued in the wrong court is not automatically void

Section 373(4) of the Insolvency Act 1986 provides that nothing in the allocation rules "invalidates any proceedings on the grounds that they were initiated or continued in the wrong court". Rule 12.31 of the 2016 Rules then lets the court transfer the case to the right court, allow it to continue where it is, or strike it out. A debtor cannot assume that a petition filed in the High Court for a £200,000 debt will simply fall away. Our page on [debt recovery court proceedings](https://lexlaw.co.uk/debt-recovery-insolvency-county-court-proceedings-petitions-fixed-fee-lawyers-london/) explains how we approach procedural defects for creditors and debtors.

Rule 12.30 gives the High Court and the County Court a general power to transfer insolvency proceedings, of their own motion or on the application of an interested person. Rule 10.11(7) also requires the petition to contain enough information to show it has been presented in the appropriate court, so a creditor who gets the court wrong hands the debtor an argument about costs and delay. Where a petition has already led to an order, our [bankruptcy annulments](https://windinguppetitionsolicitors.co.uk/bankruptcy-annulments/) guide sets out the routes back.

## What creditors should do differently

A creditor with a London debtor now needs to check two things before issuing: whether rule 12.5 allocates the case to London at all, and which side of £500,000 the petition debt falls. Larger claims against individuals often arise from guarantees of company borrowing, which we explain in our guide to [directors' personal guarantees when a corporate debtor defaults](https://lexlaw.co.uk/solicitors-london/directors-personal-guarantees-what-happens-when-a-corporate-debtor-defaults/). Many of those claims will now run in the County Court. Our page on [issuing a statutory demand](https://windinguppetitionsolicitors.co.uk/issue-statutory-demand/) covers the content requirements in rule 10.1.

The demand must name the court the debtor should apply to, so a demand drafted on the old figures may now point to the wrong place. Creditors should review any demand served shortly before 22 June 2026 and should not rely on precedents or court web pages dated before that day. If you hold a judgment rather than a bare debt, our guide to [enforcement of a judgment debt](https://lexlaw.co.uk/enforcement-recovery-judgment-debt-solicitors-london/) compares bankruptcy with the other enforcement routes.

## The deadlines that decide your position

A debtor has 18 days from service to apply to set aside a statutory demand, under rule 10.4(2). A creditor may present a petition once "at least 3 weeks have elapsed since the demand was served" and the demand has been neither complied with nor set aside, under section 268(1)(a). Rule 10.1(1)(n) requires the demand to warn that failing to deal with it within 21 days could lead to bankruptcy. These periods are short, and they are the same in either court. Our page on [setting aside statutory demands, including HMRC demands](https://windinguppetitionsolicitors.co.uk/statutory-demand-set-aside-lawyers-london-hmrc/) explains how to use the time.

Filing in time stops the clock. Rule 10.4(5) provides that the time for complying with the demand "ceases to run on the date the application is filed with the court", subject to any order under rule 10.5. Missing the 18 days does not end every defence, but it makes the position harder and more expensive. A legal pause on enforcement may also help in some cases, as our guide to [whether breathing space can stop HMRC or another creditor making you bankrupt](https://windinguppetitionsolicitors.co.uk/breathing-space-can-it-stop-hmrc-or-another-creditor-making-you-bankrupt/) explains.

## When an adviser got the court or the deadline wrong

We see cases where a set-aside application was never filed, or was filed late, because an earlier adviser misread the demand. If that happened to you, our page on [claims against negligent solicitors](https://professionalnegligenceclaimsolicitors.co.uk/sue-negligent-solicitor-law-firm/) explains the test, and our article on [whether your solicitor has to tell you they made a mistake](https://professionalnegligenceclaimsolicitors.co.uk/solicitor-mistake-duty-tell-client/) covers the duty of candour.

Procedural mistakes cut both ways, and creditors make them too. In one HMRC case we had a [bankruptcy order annulled after HMRC failed to serve a hearing notice](https://lexlaw.co.uk/solicitors-london/case-study-bankruptcy-order-annulment-victory-following-hmrcs-defective-service/). Our article on [HMRC bankruptcy petitions](https://taxdisputes.co.uk/2026/08/hmrc-bankruptcy-petitions-the-carragher-case/) explains why a petition, on its own, is not yet a bankruptcy.

## How LEXLAW Can Help

We act for individuals served with statutory demands and bankruptcy petitions, and for creditors who intend to petition, in the County Court at Central London, the High Court and hearing centres across England and Wales. We challenge demands, oppose and adjourn petitions, apply to annul bankruptcy orders and advise on which court a case belongs in. We do not offer free legal advice or legal aid. We are not a debt advice service, and we generally take on substantial matters rather than small consumer debts. Our [bankruptcy petitions and annulment](https://lexlaw.co.uk/bankruptcy-petition-and-annulment-solicitors/) page describes this work in more detail.

We are dual qualified solicitors and barristers with chambers in Middle Temple, next to the Royal Courts of Justice, so the lawyer who prepares your case can also argue it. We offer a fixed fee advice conference with both a solicitor and a barrister, at which we review the demand or petition, confirm the right court and set out your options. To start, complete our [legal case assessment form](https://lexlaw.co.uk/legal-case-assessment/).

### Check Your Litigation Case ✔

We analyse your case prospects. We deliver strategic legal advice at your first fixed fee meeting. We get optimal legal results. Want our opinion on your case? Click below or call our lawyers in London on [☎ 02071830529](tel:+442071830529)

[Check My Case ✔](https://lexlaw.co.uk/legal-case-assessment/)

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**LIMITATION ACT 1980 - IMPORTANT WARNING**
The [Limitation Act 1980](https://lexlaw.co.uk/solicitors-london/limitation-in-litigation-know-your-limits/) sets out [strict statutory deadlines](https://lexlaw.co.uk/limitation-periods-time-limits-bar-statute-expired-start-claim-litigation-legal-advice/) within which you must bring litigation claims. Your legal rights will become irreversibly time-barred if you fail to take legal action (or defend a claim on time). Therefore, you should [seek specific legal advice about your legal dispute](https://lexlaw.co.uk/legal-case-assessment/) at the very first opportunity so that you understand the time you have left. Failure to take advice or delay in taking action can be **fatal **to your prospects of success.

*This article is for general information only and does not constitute legal advice. You should take specific legal advice on your own circumstances before acting or refraining from acting.*

### Frequently Asked Questions (FAQs)

What is the £500,000 bankruptcy petition threshold in London?
It is the figure in rule 10.11(1) of the Insolvency (England and Wales) Rules 2016 that decides which court hears a creditor's bankruptcy petition allocated to the London Insolvency District. Debts of £500,000 or more go to the High Court, and debts of less than £500,000 go to the County Court at Central London. The figure was £50,000 until SI 2026/561 came into force on 22 June 2026.

Can I be made bankrupt for a debt below £500,000?
Yes. The minimum debt for a creditor's petition is the bankruptcy level of £5,000 in section 267(4) of the Insolvency Act 1986. The £500,000 figure only decides which London court hears the petition.

Which court hears a petition for exactly £500,000?
The High Court. Rule 10.11(1)(a) sends debts of "£500,000 or more" to the High Court, and rule 10.11(1)(b) sends only debts "less than £500,000" to the County Court at Central London.

Does the new threshold apply to HMRC bankruptcy petitions?
Yes, where HMRC's petition is allocated to London under rule 12.5(b) of the 2016 Rules, because rule 10.11(1) covers that category. Where HMRC's demand is founded on a judgment and names the High Court or the County Court at Central London, rule 10.4(4)(b) also sends any set-aside application to the court fixed by rule 10.11(1).

How long do I have to set aside a statutory demand?
You must apply within 18 days of service under rule 10.4(2) of the 2016 Rules. The creditor can petition once at least three weeks have passed without the demand being complied with or set aside, under section 268(1)(a) of the Insolvency Act 1986. Longer periods apply to demands served outside England and Wales under rule 10.1(10).