Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Bankruptcy definition

What does Bankruptcy mean? Bankruptcy is the formal insolvency process for individuals who cannot pay their debts. It halts most enforcement, vests the bankrupt’s estate in a trustee, and realises assets and surplus income for creditors until discharge. In England and Wales, under the Insolvency Act 1986, a debtor applies online to the Adjudicator for a bankruptcy order; creditors petition the court. The Official Receiver acts as trustee unless an insolvency practitioner is appointed. Discharge is usually after 12 months; income payment orders/agreements can run up to three years; bankruptcy restrictions orders may extend restrictions. Scotland uses sequestration under the Bankruptcy (Scotland)...

Challenging Bankruptcy Used to Frustrate Divorce Financial Remedy Claims: Annulment, Rescission and Family Court Options (England and Wales)

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

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It is fairly common for bankruptcy and divorce to be underway at the same time, and for each process to affect the other. For background and a fuller explanation of their interplay, see Practice Note: The impact of bankruptcy on divorce proceedings. Because bankruptcy can bear directly on divorce-based financial relief applications (often referred to as property adjustment orders), situations do arise in which a less scrupulous spouse may permit, or even precipitate, their own bankruptcy so as to derail existing divorce proceedings. In those scenarios, both the family court and the bankruptcy court hold powers, where the facts justify it, to scrutinise and challenge the making of the bankruptcy order and the overall consequences it produces.

A summary of the challenges available

The non‑bankrupt divorcing spouse has avenues to challenge, available in both the bankruptcy and family courts where appropriate and necessary...

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Web page updated on 21/05/2026

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