This article presents bankruptcy law, as applicable for people in the UK and the relevant legalities to be provided for. Bankruptcy is a legal procedure that is designed to deal with debt. It is because of the formal proceedings that are involved, that it becomes necessary to understand the term referred to as bankruptcy law.

There are basically two routes, acceptable to the law that lead to bankruptcy. The first is selected by debtor and the second is an alternative which can be exercised by creditors. In the first route, the debtor can file a “debtor's petition” and get relief from financial miseries, while the latter route, creditors can file a “creditor's petition” and endeavor to recovery the debts. Either of the petitions can be filed at any of the county courts or the High Court in London. Creditors have a choice of filling the petition against the debtor, even if the debtor left the place or ceased all activities of any relevance. The maximum duration as stated in the bankruptcy law for this is (see enterprise act for updates). The bankruptcy proceedings are applicable, even if the debtor refuses to or decides to ignore the events.

Once the petition has been filed, either an Insolvency Practitioner or the Official Receiver gets involved. The Official Receiver is responsible for managing the entire affair and protecting debtor's assets until the bankruptcy order is made. An Insolvency Practitioner (IPO) can also conduct bankruptcy affairs. Though for this option, the IPO should be authorized by the Department of Trade and Industry or a relevant professional body.

What does Bankruptcy Law Require from the Debtor?

Under bankruptcy law, debtors have to adhere to the proceedings of bankruptcy law, even if the creditor has filed the petition. Other important aspects include, the provision of information such as details on the imperative financial aspects, a list of assets and liabilities i.e. how much the debtors owns, what the debtor owes and to whom, supporting documents such as stock books, agreements, policies, etc. and it may be required to appear for an interview requested by the Official Receiver.

Bankruptcy Repercussions

The bankruptcy ensures that debtor has a control over assets. Only few items such as clothing, bedding, etc., can be retained, but these too must be disclosed. Homes may be disposed of, in order to settle claims. The capitalization of increased property values are even passed to the trustees. Interest on life insurance policies can be claimed by trustees. Moreover, there are other business related restrictions to abide by. The final stages, such as bankruptcy discharge formalities, happen at the end of maximum 12 months. With the discharge, all debts and attached restrictions are eliminated. The assets acquired after the bankruptcy has been discharged, remain with the discharged bankrupt.