Bankruptcy petition meaning

Checklist and timeline A straightforward checklist and timeline sets out each stage from the point a debt becomes due right through to a bankruptcy petition being presented. It is relevant to personal insolvency where a statutory demand has been served on the debtor. For further reading on statutory demands, please refer to: Statutory demands for restructuring and insolvency professionals—overview Practice Note: What is a statutory demand?...

Step/action Time (days) Section/rule 1. Draft the statutory demand. Depending on the type of debt asserted, consult: (Form SD2) r 10.1 Statutory Demand under Section 268(1)(a) of the Insolvency Act 1986. Debt for Liquidated Sum Payable Immediately (Formerly form 6.1) (Form SD3) r 10.1 Statutory Demand under Section 268(1)(a) of the Insolvency Act 1986. Debt Payable at Future Date (Formerly form 6.3) (Form SD4) r 10.1 Statutory Demand under Section 268(1)(a) of the Insolvency Act 1986. Debt for Liquidated Sum Payable Immediately Following a Judgment or Order of the Court (Formerly form 6.2) Day 1 Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, r 10.1; Section 268 of Insolvency Act 1986 (IA 1986) 2. Arrange and complete service of the statutory demand on the debtor. Service should ordinarily be personal unless circumstances are exceptional. Day 2–10 IA 1986, s 268; IR 2016, SI 2016/1024, r 10.2; PDIP, para 12.7 3....

Asset Vests in the trustee in bankruptcy? The bankrupt’s (their family’s) primary/sole residence: Yes (but only for a limited period). It falls into the bankruptcy estate for three years starting on the date the bankruptcy order is made. Reference: IA 1986, s 283A. Freehold property: Yes. Any interest the bankrupt has in land vests in the trustee in bankruptcy. Reference: IA 1986, ss 283(1), 436. Leasehold property: Varies. Save for a few exceptions, leasehold interests vest in the trustee; certain statutory tenancies are excluded by IA 1986, s 283(3A), though the trustee can still claim them by serving a notice. Reference: IA 1986, ss 283(1), 283(3A), 308A. Money/cash: Yes. Any money or cash held when the bankruptcy order is made forms part of the estate and vests in the trustee. Reference: IA 1986, ss 283(1), 436. Pensions: No (mostly). The bankrupt’s pension rights do not vest if: (i) the petition was presented on or after 29 May 2000, and (ii) the pension scheme...

In this issue Key DR developments Claims and remedies Costs and funding Litigation Applications—general Evidence and disclosure Appeals New content Dates for your diary Useful information Daily and weekly news alerts Key DR developments CPR Committee minutes Minutes of the CPR Committee meeting—6 June 2025: The Civil Procedure Rule Committee met on 6 June 2025 in a hybrid session at The Rolls Building (Royal Courts of Justice) and via video conference. The minutes confirm a forthcoming CPR 51 pilot enabling non-parties to obtain court documents, arising from the Supreme Court ruling in Cape Intermediate Holdings Ltd v Dring [2019] UKSC 38. They also record approved amendments to the e‑working pilot, progressing towards a permanent electronic filing system as part of ongoing court modernisation. Further topics included summary assessment of costs, arbitration updates, disclosure, civil restraint orders, closed material procedures, judicial review reforms for infrastructure projects, whiplash reforms, digital services and other procedural...

Sriram (acting by her litigation friend, the Official Solicitor) v Revenue and Customs Commissioners and another [2024] EWHC 853 (Ch), [2024] All ER (D) 86 (Apr) What are the practical implications of this case? Creditors should act with care to ensure that service of a statutory demand (and bankruptcy petition) is properly effected, particularly where a debtor seeks to avoid service and has several addresses. Attempts to serve ought to be clearly and contemporaneously recorded. Creditors are required to take all reasonable measures to bring the document or documents to the debtor’s attention. However, this does not oblige them to attend or write to every address associated with the debtor that they know about. The addresses that must be tried will depend on the circumstances of the individual case. A wide, scattergun strategy to service is not expected. By way of example, if a debtor holds multiple properties and there is no reply to a visit or correspondence at one property, that location may not amount to a ‘known’...

Prince Hussam Bin Saud and another v Mobile Telecommunications Company KSCP [2024] EWHC 1724 (Ch) What are the practical implications of this case? The decision offers clear, practical guidance on applying the ‘good arguable case’ limb when seeking permission to serve the petition outside the jurisdiction, pursuant to Schedule 4 of the Insolvency (England and Wales) Rules 2016 and CPR 6.37. It further emphasises how the appellate court treats attempts to overturn a first instance judge’s assessment of the facts—in particular, whether the appellant debtor maintained a place of residence within the jurisdiction at any point during the three years before the petition was presented. In addressing these issues, the judge also drew together and explained the authorities on what amounts to a place of residence for the purposes of IA 1986, s 265, which operates as a threshold requirement for making a bankruptcy order...

Once a bankruptcy petition and its supporting documents have been presented (or issued) at court, the petitioning creditor’s initial step is to ensure the documents are served on the debtor. This Practice Note outlines the methods by which a petitioning creditor must serve the bankruptcy petition on the debtor. It does not cover service of any other documents within insolvency proceedings. For further guidance on issuing a bankruptcy petition or what to expect at the bankruptcy hearing, see: Creditors’ bankruptcy petitions—grounds and documents required for presentation Bankruptcy petitions—process and procedure post-presentation of the petition The general rule—personal service of the bankruptcy petition on the debtor The general rule is that a sealed copy of the bankruptcy petition must—unless the court orders substituted service—be served on the debtor personally by an officer of the court, the petitioning creditor, the creditor’s solicitor, or a person instructed by the creditor or their solicitor. In practice, most bankruptcy petitions are personally served on the debtor by...

This Practice Note provides a concise overview of bankruptcy and its effect on legal proceedings from a dispute resolution standpoint, summarising key points in practice... What is bankruptcy? Bankruptcy is an insolvency route for individuals. It applies to individuals only. Prior to 6 April 2016—and in contrast to corporate liquidation—only the court had power to make an individual bankrupt. From 6 April 2016, a new bankruptcy applications regime took effect, replacing debtors' bankruptcy petitions, though creditors' petitions remained unaffected. Petitions lodged by debtors before that date were unaffected; now, anyone seeking their own bankruptcy must file an online application decided by an adjudicator—an official of the Insolvency Service—rather than the court. For more detail and background, see News Analysis: New bankruptcy applications regime to come into force. Once a bankruptcy order is made—by the court or by the adjudicator—it releases the debtor from liabilities owed to creditors (subject to certain statutory exceptions) and bars unsecured creditors from starting—or continuing with—any legal process against the bankrupt or their property...

This Practice Note covers: the impact of an insolvency process on ongoing litigation where the debtor, bankrupt or insolvent company is a claimant or defendant how an insolvency process interacts with an arbitration agreement binding the debtor, bankrupt or insolvent company additional considerations in a cross-border setting Personal insolvency What happens when the bankrupt is a claimant in ongoing proceedings? The presentation of a bankruptcy petition, whether by a creditor or by the debtor, has no legal consequence for proceedings already on foot where the debtor is the claimant. Once a bankruptcy order is made and a trustee in bankruptcy (the trustee) is appointed, most causes of action in which the bankrupt has an interest vest in the trustee under section 306 of the Insolvency Act 1986 (IA 1986). In such circumstances, it is the trustee, rather than the bankrupt, who has standing to carry on the claim. The trustee will proceed only if that course best serves the interests...

INSOLVENCY ACT APPLICATION NOTICE Note: Use with an application notice template compliant with the Insolvency (England and Wales) Rules 2016, SI 2016/1024 (Form IAA), IR 2016, r 1.35... Case No: [insert]. [In the High Court of Justice, Business and Property Courts (Insolvency and Companies List (ChD)) in England and Wales or in [location]; or in the County Court at [location], Business and Property Work]... In the matter of [bankrupt’s name] (In Bankruptcy) and the Insolvency Act 1986. Between [Applicant(s)] and [Respondent(s)]. Application under section 284... Applicant(s): [names/addresses]. Respondent(s): [names/addresses]. The application concerns [details of the relevant bankruptcy]. To be heard by [level of judge] at [court/hearing centre]. Within existing insolvency proceedings? YES/NO. Court reference: [insert]... Declaration that [the disposition] is void under section 284. Order restoring the position as if the disposition had not occurred. Order that the Respondent(s) pay the Applicant(s)’ costs. Further or other relief as the Court considers appropriate. Grounds: set out in the...

Applicant: [ enter initials and surname ] — 1st: (exhibits) 1–4; [ enter date ] 20[ enter year ] Court Reference No: [ ENTER COURT REF ]...

Petitioning Creditor 1 st : [ NAME ] Annex: [ INSERT ] Dated: [ INSERT ] Court Ref No: [ INSERT COURT REF...

STOP PRESS From 6 April 2017, the Insolvency Rules 1986 (SI 1986/1925) were revoked and superseded by the Insolvency (England and Wales) Rules 2016 (IR 2016) (SI 2016/1024). The material in this Q&A may have been impacted by this amendment. Service out of the jurisdiction Under rule 6.14(6) of the Insolvency Rules 1986 (SI 1986/1925) (IR 1986), a bankruptcy petition can be served beyond England and Wales, but only with the court’s leave, and the court may specify how service is to be carried out. For bankruptcy petitions, IR 1986, r 12A.20 states that Civil Procedure Rules 6 (CPR) apply to serving court documents outside the jurisdiction, subject to any modifications directed by the court...

This Q&A considers a tenant who is in a tenancy in common with another tenant, who petitions for bankruptcy after exchange and before the completion of a sale of the property that the two tenants own. It examines the first co-owner’s exposure to the purchaser and what remedies he or she may pursue against the other co-tenant if the purchaser serves a notice to complete. As to contractual responsibility, this turns on the contract’s terms. By way of illustration, if the sellers have joint and several obligations, the innocent party is nonetheless answerable to the purchasers. For further details, see Practice Note: Joint, several, and joint and several liability...

A pension sharing order A pension sharing order enables one party to obtain, in their own name and in their own right, benefits directly debited from the other party’s pension scheme, and secures a clean break between the parties regarding pensions. Sections 11 and 12 of the Welfare Reform and Pensions Act 1999 (WRPA 1999) state that pension rights under approved pension schemes do not vest in a trustee in bankruptcy, provided the bankruptcy petition was presented on or after 29 May 2000 under the legislation. Consequently, if the individual holding the pension to be shared is made bankrupt, the court’s authority to make a pension sharing order should remain unaffected in law...