Bankruptcy

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	Status			This is when an individual is unable to to pay their debts as they fall due, or their assets are less than their liabilities.
	Appointee			The creditors or the individual concerned can petition the court for a bankruptcy order. The Official Receiver (a DTI civil servant appointee) takes initial control of the estate of the insolvent individual. If there are assets that may be realised to settle at least some of the outstanding debt, a creditors' meeting is arranged with the intention of appointing an insolvency practitioner to act as a trustee in bankruptcy. If the insolvent individual has no assets, then the Official Receiver remains responsible for overseeing the bankruptcy order. In both cases the Official Receiver will undertake an investigation into the circumstances of how the unfortunate state of affairs arose.
	Procedure			If any assets are available: A creditors' meeting is arranged with the intention of appointing an insolvency practitioner to act as a trustee in bankruptcy. Once appointed, it is their responsibility to realise the available assets in the most effective manner they can, and distribute any residual funds to the creditors (so many pence in the pound). If surplus funds are realised, by the time the trustees' own fees and debts owed to the preferential creditors have been paid off, there is normally little left for the remaining creditors. No assets are available: With nothing to realise, the only consideration remaining to the Official Receiver is to make his or her report on whether any further action needs to be taken against the individual. During the period the bankruptcy order remains in force, the debtor has to report their level of earnings. Surplus funds may be diverted to pay off some of the debt, after a reasonable allowance is made for the cost of living.
	Outcome			The bankrupt debtor is automatically discharged after a period of 3 years. The discharge may be delayed if the debtor does not cooperate, or if they get into further financial difficulties.
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