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GLOSSARY

Bankruptcy petition definition

What does Bankruptcy petition mean?

Under the Insolvency Act 1986, a person may petition the court for a bankruptcy order to be made against an individual.

The bankruptcy petition must comply with the provisions of the Insolvency Act 1986 and may be made by: (1) the individual's creditors or jointly by more than one of them; (2) by the individual himself; (3) the supervisor of, or any person, other than the individual, who is for the time being bound by a voluntary arrangement proposed by the individual and approved under Part VIII of the Insolvency Act 1986; and (4) where a criminal bankruptcy order has been made against the individual, by the Official Petitioner or by any person specified in the order in pursuance of the Powers of Criminal Courts Act 1973. The court has the general power to dismiss a bankruptcy petition or to stay proceedings on such a petition, and it may do so on such terms and conditions as it thinks fit. The court may make a bankruptcy order on any such petition and the bankruptcy petition may not be withdrawn without the permission of the court.

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What vests and doesn't vest in the trustee in bankruptcy—checklist

What vests and doesn't vest in the trustee in bankruptcy—checklist Asset Vests in the trustee in bankruptcy? Comments Reference The bankrupt's (their family's) primary/sole residence Yes (but for a limited time only) The asset will only vest in the bankruptcy estate for a period of three years beginning on the day the bankruptcy order is made. Section 283A of the Insolvency Act 1986 (IA 1986) Freehold property Yes Where the bankrupt holds an interest in land, that interest will vest in the trustee in bankruptcy (trustee). IA 1986, ss 283(1) and 436 Leasehold property Varies Apart from a few exceptions, leasehold property will vest in the trustee.The exceptions are certain statutory tenancies as set out in IA 1986, s 283(3A), but the trustee can claim even these by service a notice. IA 1986, ss 283(1), 283(3A) and 308A Money/cash Yes To the extent the bankrupt holds any money/cash at the time the bankruptcy order is made, that will form part of the bankruptcy estate and vest in the trustee....

Individual voluntary arrangements—checklist and steps to take

Individual voluntary arrangements—checklist and steps to take The IVA process What to do? The steps to take Authority 1 Prepare the IVA proposal The debtor should provide an IVA proposal to the intended nominee (a licensed insolvency practitioner). Alternatively, the debtor should meet with the proposed nominee and provide details of their financial affairs and an outline of the proposal to creditors. The nominee will then draft as appropriate.The nominee must comply with Statement of Insolvency Practice (SIP) 3.1, a revised version of which came into force for nominees appointed on or after 1 March 2023—see News Analysis: LNB News 01/03/2023 13. Sections 256, 256 of the Insolvency Act 1986 (IA 1986)Insolvency Rules 1986, SI 1986/1925, r 8.3SIP 3.1 2 The contents of the IVA proposal An explanation should be included as to why the debtor believes the IVA is desirable together with details of the comparable outcome in a bankruptcy.The IVA proposal should include (but is not limited to) the following information:● the debtor’s assets and their...

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Creditors' bankruptcy petitions—grounds and documents required for presentation

Bankruptcy in England and Wales is a process by which the court or the bankruptcy adjudicator adjudicates an individual bankrupt by making a bankruptcy order. While a company may go into voluntary liquidation without any involvement from the court, only the court or the bankruptcy adjudicator can make an individual bankrupt.The bankruptcy procedure available to a debtor’s creditors has its own prescribed process, which includes (in some cases) its own pre-action procedure (the statutory demand), and is conducted under the Insolvency Act 1986 (IA 1986) and Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024. The Practice Direction on Insolvency Proceedings (PDIP) also applies.Types of bankruptcy petition and who can present one•creditors' petition—any creditor (either on their own, or jointly with other creditors), who is owed a liquidated and undisputed debt or debts equal to or more than the bankruptcy limit (which, for bankruptcy petitions presented on or after 1 October 2015 is £5,000—for bankruptcy petitions presented prior to that date, the level was £750) can present a creditors'...

Issuing bankruptcy petitions—where to issue, the fee to pay and the documents to file

Bankruptcy in England and Wales is the process whereby an individual is found to be insolvent, and that they should enter a formal process allowing the assets comprising their bankruptcy estate to be realised for the benefit of their creditors. There is a prescribed process which must be followed before either the court (for creditors' bankruptcy petitions) or the adjudicator (for debtors' bankruptcy applications) is able to make the bankruptcy order. Failure to follow the correct process could lead to the court or adjudicator refusing to make the bankruptcy order. For further reading on the bankruptcy process, see:•Bankruptcy—overview•Practice Note: Creditors' bankruptcy petitions—grounds and documents required for presentation•Practice Note: How to effect service of a creditor’s bankruptcy petition on the debtor and what happens if service cannot be effected•Practice Note: Bankruptcy petitions—process and procedure post-presentation of the petitionOn 6 April 2016, section 71 of the Enterprise and Regulatory Reform Act 2013 came into force. With it came the abolition of debtors' bankruptcy petitions (unless they were presented prior to 6 April...

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Witness statement in support of application for substituted service of a bankruptcy petition

Witness statement in support of application for substituted service of a bankruptcy petition Applicant: [insert initials and surname]: 1st: (exhibits).1–4: [insert date] 20[insert year] Court Reference No: [INSERT COURT REF. NUMBER] [ IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS [OF ENGLAND AND WALES OR IN [INSERT LOCATION]] INSOLVENCY AND COMPANIES LIST (ChD) OR IN THE COUNTY COURT AT [INSERT LOCATION] [BUSINESS AND PROPERTY COURTS LIST] OR IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION [INSERT LOCATION] DISTRICT REGISTRY ] IN BANKRUPTCY IN THE MATTER OF [INSERT DEBTOR’S OR BANKRUPT’S NAME] AND IN THE MATTER OF THE INSOLVENCY ACT 1986 [Insert name of the full name of the petitioning creditor] Applicant And [Insert name of the debtor] [Respondent OR Respondents] Witness statement of [insert name of the person making the statement], the solicitor for the petitioning creditor in support of an application for an order for substituted service of a bankruptcy petition I, [insert name of the person making the statement], of [insert the witnesses’ details...

Witness statement under rule 10.10 of the Insolvency (England and Wales) Rules 2016 verifying the bankruptcy petition

Witness statement under rule 10.10 of the Insolvency (England and Wales) Rules 2016 verifying the bankruptcy petition Petitioning Creditor 1st: [NAME] Exhibit: [INSERT] Dated: [INSERT] Court Reference No: [INSERT COURT REF. NUMBER] [ IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS [OF ENGLAND AND WALES OR IN [INSERT LOCATION]] INSOLVENCY AND COMPANIES LIST (ChD) OR IN THE COUNTY COURT AT [INSERT LOCATION] [BUSINESS AND PROPERTY COURTS LIST] OR IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION [INSERT LOCATION] DISTRICT REGISTRY ] IN BANKRUPTCY IN THE MATTER OF [INSERT DEBTOR’S OR BANKRUPT’S NAME] AND IN THE MATTER OF THE INSOLVENCY ACT 1986 ___________________________________________________________________________ WITNESS STATEMENT OF [NAME] VERIFYING THE BANKRUPTCY PETITION ____________________________________________________________________________ I, [NAME], [JOB TITLE], of [NAME AND ADDRESS OF FIRM] WILL SAY AS FOLLOWS: 1 I am a [JOB TITLE] and I am instructed by the petitioning creditor, [NAME]. The statements in the bankruptcy petition now produced and shown to me in the document marked ‘[INSERT]’ annexed to this witness statement are...

Dive into our 8 Precedents related to Bankruptcy petition

Scotland—Can you seek a bankruptcy order for an amount greater than the amount in the statutory demand?

Scotland—Can you seek a bankruptcy order for an amount greater than the amount in the statutory demand? A statutory demand (which must be in Form 5 in the Bankruptcy (Scotland) Regulations 2016, SSI 2016/397, Sch 1) is a formal demand for a debt served by a creditor on its debtor. Failure by the debtor to pay the debt, or satisfy or secure it to the creditor's satisfaction, or to respond to the creditor within three weeks denying the debt will render the debtor ‘apparently insolvent’ (see section 16(1)(i) of the Bankruptcy (Scotland) Act 2016 (Ba(S)A 2016)). Apparent insolvency is a condition that must be established if sequestration is to be awarded. A sum demanded in a demand can, for example, include interest or other charges but there must be clear evidence of the existence of the debt, for example, a written admission by the debtor or a document which establishes the debt, such as a decree or contract. If there is no legitimate basis for the debt otherwise, the...

What is an executor’s duty to enquire into the status of a beneficiary when they have reason to suspect the beneficiary has entered into an Individual Voluntary Arrangement?

What is an executor’s duty to enquire into the status of a beneficiary when they have reason to suspect the beneficiary has entered into an Individual Voluntary Arrangement? The Law Society Practice Note Bankrupt beneficiaries provides useful guidance on the duties of Personal Representatives (PRs) and bankrupt beneficiaries. The Insolvency Service maintains a register of those individuals who are subject to a current bankruptcy order, an Individual Voluntary Arrangement (IVA) or a debt relief order or one that has ended in the last three months. As mentioned in the Practice Note, the register is not complete but is still a useful starting point to ascertain whether or not a beneficiary can give a valid receipt for a legacy. See: Bankruptcy searches. In general, where a beneficiary is subject to an IVA but no bankruptcy petition has been presented (or where a bankruptcy petition has been presented but has been dismissed at the time when the distribution is made), the existence of the IVA will not affect the...

See the 113 Q&As about Bankruptcy petition

Restructuring & Insolvency weekly highlights—12 June 2025

This week's edition of Restructuring & Insolvency weekly highlights includes: the Court of Appeal’s judgment on treatment of secured debt under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Moratorium) (England and Wales) Regulations 2020 (Forbes v Interbay Funding Ltd; Forbes and Seculink Ltd), the Insolvency Service’s 2024 practitioner regulation review, plus a round-up of other news and cases for restructuring and insolvency.

Restructuring & Insolvency weekly highlights—5 June 2025

This week's edition of Restructuring & Insolvency weekly highlights includes: an analysis of the responsibilities of directors to keep and produce appropriately detailed copies of the company’s books and records (Re New Line Polymers Ltd (in liquidation)), an examination of the meaning of section 234 of the Insolvency Act 1986 (Carvill-Biggs v Reading), a close look at office-holder costs and adjudication challenges (Sanrose Investment Ltd v Foley), plus a round-up of other news and cases for restructuring and insolvency.

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[215 Rights of the scheme in insolvency]

[(1) The compensation scheme may make provision—(a) about the effect of a payment of compensation under the scheme on rights or obligations arising out of matters in connection with which the compensation was paid;(b) giving the scheme manager a right of recovery in respect of those rights or obligations.](2) Such a right of recovery conferred by the scheme does not, in the event of [a person's insolvency], exceed such right (if any) as the claimant would have had in that event.[(2A) Any payment made by the scheme manager under section 214B(2) in connection with the exercise of a stabilisation power in respect of a bank, building society or credit union is to be treated as a debt due to the scheme manager from that bank, building society or (as the case may be) credit union.(2B) In subsection (2)—“bank” has the meaning given in section

264 Who may present a bankruptcy petition

(1) A petition for a bankruptcy order to be made against an individual may be presented to the court in accordance with the following provisions of this Part—(a) by one of the individual's creditors or jointly by more than one of them,(b) . . .[(ba) . . .[(bb) . . .]](c) by the supervisor of, or any person (other than the individual) who is for the time being bound by, a voluntary arrangement proposed by the individual and approved under Part VIII, or(d) where a criminal bankruptcy order has been

Bankruptcy petition is referenced 3 in UK Parliament Acts