Bankruptcy – What is bankruptcy?

Bankruptcy is a way of dealing with personal debts that you cannot pay when it becomes due.

Anyone can go bankrupt, including individual members of a partnership. (There are different  procedures for dealing with insolvency in companies and the partnerships themselves.)

Whilst you are bankrupt your non-essential assets (property and possessions) and excess income are used to pay off your debts. After a period of time (usually one year) most or all of your outstanding debts are “discharged” (written off) and you can make a fresh start.

Once a bankruptcy order has been made against you, your creditors cannot take any further action against you.

You can make yourself bankrupt by filing for bankruptcy. You can be made bankrupt by your creditors. You can also be made bankrupt if your individual voluntary arrangement (IVA) fails.

The effects of going bankrupt are the same whether you file for bankruptcy or you are made bankrupt by your creditors.

Being made bankrupt

If you we £750 or m ore in unsecured debt to a creditor and you have not been able to agree how to repay the debt, that creditor can make you bankrupt.

If you fail to meet the requirements of your IVA, your IVA supervisor or anyone bound by the IVA can make you bankrupt.

A court can declare you bankrupt by issuing a bankruptcy order after it’s been presented with a bankruptcy petition by one of your creditors, your IVA supervisor or anyone bound by the IVA.

Filing for bankruptcy

A court can declare you bankrupt by issuing a bankruptcy order after it’s been presented with a bankruptcy petition by you.

More information

• Bankruptcy – The bankruptcy process
• Bankruptcy – What is a certificate of summary administration?
• Bankruptcy – Voluntary and involuntary bankruptcy
• Bankruptcy – How to file for bankruptcy
• Bankruptcy – The advantages of bankruptcy
• Bankruptcy – The disadvantages of bankruptcy
• Bankruptcy – The alternatives to bankruptcy
• Bankruptcy – I am owed money by a bankrupt
• Bankruptcy – Insolvency and bankruptcy
• What is liquidation?
• What is administration?
• What is an individual voluntary arrangement?
• What is a company voluntary arrangement?

Downloads

• Guide to Bankruptcy (The Insolvency Service)