Insolvency Made Clear: A Guide for Debtors

Legal terms defined
‘The Act’: to save time, this book refers to the Insolvency Act 1986 as ‘the Act’, or
‘IA 1986’. It can be found here: https://www.legislation.gov.uk/ukpga/1986/45/
contents. A section of the Act is referred to as s123; multiple sections are referred
to as ss12 and 13 or ss12 to 25.
‘Adjourning’ means ‘postponing for another occasion’.
‘Administration’ is a legal process which only companies can go through. An
Insolvency Practitioner working as an ‘administrator’ runs the company in
place of the directors.
‘After-acquired property’ refers to property which is received by an undischarged
bankrupt: for example, if they received an inheritance. A Trustee can
acquire this property for the creditors.
The ‘annulment’ of a bankruptcy order is when it is cancelled. Annulment can
happen if the debts of the bankrupt are paid, if the bankruptcy order should not
have been made or if the bankrupt signs an individual voluntary arrangement.
An ‘asset’ is something of value. For example, cash, cars and houses are all assets.
‘Bankruptcy’ has a precise legal meaning which is the process by which an individual’s
estate is run for the benefit of their creditors. A ‘bankrupt’ is someone
who has been the subject of a bankruptcy order.
A ‘bankruptcy restrictions order’ (BRO) continues certain bankruptcy restrictions
even after the bankruptcy is discharged. Bankruptcy restrictions undertakings
(BRU) may be accepted instead of needing to obtain an order.
A ‘claim’, if made to the court, is a formal request to ask the judge to make an
order to protect a legal right.
A ‘class’ of creditors is a group of them. Bankruptcy is often described as a ‘class’
remedy: this is because its focus is the creditors as a group.
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