There is no single law on bankruptcy in the United Kingdom with there being one system for England and Wales, one for Northern Ireland and one for Scotland. Dieu et mon droit (motto) (French for God and my right)2 Northern Irelands location within the UK Main language English Other recognised languages Irish, Ulster Scots Capital and largest city Belfast First Minister Office suspended Secretary of State for Northern Ireland Peter Hain MP Area  - Total Ranked 4th... Motto: Nemo me impune lacessit (English: No one provokes me with impunity) Scotlands location within Europe Scotlands location within the United Kingdom Languages English, Gaelic, Scots Capital Edinburgh Largest city Glasgow First Minister Jack McConnell Area - Total - % water Ranked 2nd UK 78,782 km² 1. ...

Bankruptcy Law

There are two main personal insolvency regimes in the UK: one for England and Wales and another for Scotland. In England and Wales the majority of personal insolvencies are “bankruptcies". The remainder are Individual Voluntary Arrangements or IVAs, which are arrangements between the debtor and his or her creditors for the payment of the debts on different terms: for example by instalments, or over a period of time. These two forms of insolvency have close equivalents in Scotland, where bankruptcies are known as sequestrations and the equivalent of IVAs are Protected Trust Deeds, or PTDs. Individual Voluntary Arangements (IVA) are a formal alternative for individuals wishing to avoid petitioning for their own bankruptcy. ...

In bankruptcy, an indebted individual sees his debts forgiven in return for surrendering his assets (and sometimes a limited proportion of his income). He is allowed however to retain so-called “exempt” assets such as tools-of-trade and basic necessities and the generosity of this exemption level has received much attention in the USA where it varies among states, potentially affecting bankruptcy filing rates.

Bankruptcy is handled by a Trustee in bankruptcy who must be either the Official Receiver (a civil servant) or a licensed insolvency practitioner. A trustee in bankruptcy (TIB), in United States bankruptcy law, is a person appointed by the Bankruptcy court to oversee the distribution of the assets of a bankrupt to his creditors. ... The Official Receiver (usually abbreviated OR) is the name of a statutory office holder in England and Wales. ... In the United Kingdom an Insolvency Practitioner (usually abbreviated as IP) is a person specialising in formal insolvency cases. ...

Following the introduction of the Enterprise Act 2002's bankruptcy provisions in April 2004, an England & Wales bankruptcy will now normally last no longer than 12 months and may be less, if the Official Receiver files in Court a certificate that his investigations are complete. However, in cases where the bankrupt is considered particularly culpable for his or her insolvency, the bankruptcy can last for up to 15 years, although such orders are rare. Changes to the Law Governing Bankruptcy Since the 1st April 2004 there have been considerable changes to the laws concerning bankruptcy in England Previously, bankruptcy would typically last for a period of between 2 and 3 years, but now the majority of bankruptcies will be discharged after only 12 months. ...

Why are bankruptcies soaring?

Some claim that the Enterprise Act threatens massively to increase the number of bankruptcy cases. Indeed, bankruptcies have risen considerably since the change. However they were already on an upward trend, and the rise is mirrored in Scotland, where there has been no legislation change.

A popular alternative explanation for the run-up in UK insolvencies is "destigmatisation" - people, it is said, are becoming less ashamed of going bankrupt. This is hard to prove, but some evidence is provided by figures showing that, increasingly, bankruptcy petitions are filed by debtors themselves, rather than their creditors.

The UK average household debt-to-income ratio has risen substantially in recent years, leading some to attribute the rise in insolvencies to excessive borrowing. However, the ratio of debt repayment costs to income has remained quite low, weakening this claim. Moreover, the rise in borrowing could itself be a reflection of a lower "fear" of bankruptcy - the destigmatisation effect again.

Insolvency figures

Graph of Insolvency figures, 1997-2005

• (p) are provisional figures
• Sources: http://www.dtistats.net/sd/insolv200505/table2.htm http://www.dtistats.net/sd/insolv200602/table2.htm

Image File history File links Download high resolution version (904x481, 18 KB) Summary Graph created based on figures from http://www. ... Image File history File links Download high resolution version (904x481, 18 KB) Summary Graph created based on figures from http://www. ...

External links

• Website of The UK Insolvency Helpline
• British household indebtedness and financial stress: a household-level picture [PDF] Quarterly Bulletin, Personal Sector Articles, Winter 2004 (Report for Bank of England)
• Website of the Insolvency Service in the UK
• UK Bankruptcy Q&A Online Videos Multimedia