Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Insolvency definition

What does Insolvency mean? In practice, insolvency describes a financial state where a debtor cannot meet liabilities when due, triggering remedies such as administration, liquidation or bankruptcy and informing directors’ duties and avoidance claims. For companies in England & Wales, Scotland and Northern Ireland, the Insolvency Act 1986, s 123 sets two alternative tests: - Cash‑flow insolvency: an inability to pay debts as they fall due. The inquiry is practical and forward‑looking, not confined to today’s bills (Re Patrick & Lyon Ltd [1933] Ch 786; BNY Corporate Trustee Services Ltd v Eurosail [2013] UKSC 28). - Balance‑sheet insolvency: liabilities (including contingent and prospective liabilities) exceed assets on...

Insolvency document service: methods, time limits, alternative service and service out of the jurisdiction for bankruptcy petitions, winding-up and administration applications (England and Wales)

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

Opening proceedings

When Insolvency proceedings are begun, each route has its own procedure for service of the requisite documents. The positions for Bankruptcy, Compulsory liquidation and administration are outlined below.

Bankruptcy

Where a creditor presents a bankruptcy petition, it must be personally served by that creditor (or someone acting for them) on the debtor, unless the court orders substituted service. This is addressed in paragraph 1 and the table at the end of the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, Schedule 4. Service is commonly effected by the petitioning creditor, their solicitor, or authorised agent delivering a sealed copy of the bankruptcy petition to the debtor. The petition must be served at least 14 days before the first hearing, save where the court treats it as an expedited petition because:

the debtor has absconded
the court is satisfied the case merits an expedited hearing, or
the debtor gives written consent to a hearing within 14 days

Orders permitting substituted service are made when the court is satisfied that the debtor is avoiding service...

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Web page updated on 21/05/2026

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