Bankruptcy Petition

A petition to the court to make an individual debtor bankrupt. A creditor may petition if the debtor owes at least £5,000, the debt is unsecured, and the debtor appears unable to pay. Bankruptcy is one of the most powerful enforcement tools as it can compel realisation of all the debtor's assets.

In practice

The creditor usually serves a statutory demand first, giving the debtor 21 days to pay, secure, or compound the debt. If the debtor fails to comply, the creditor presents a bankruptcy petition. Once a bankruptcy order is made, a trustee in bankruptcy is appointed who can sell the debtor's assets (including their home) to pay creditors.