Glossary of Insolvency Terms

Glossary of Insolvency Terms. – here to help you with the terminology used in the world of insolvency.

Hopefully, this will help you make the right decision for you.

Commonly used terms in insolvency:

Administration

Please visit our Administration page for further information.

Administrator

A person who controls a company, which has gone into administration.  An administrator must be a licensed insolvency practitioner.

Administrative Receiver/Administrative Receivership

An administrative receiver usually appointed by a lender (a bank) with a pre-Enterprise Act floating charge over the company’s assets. The administrative receiver then primarily acts, therefore, on behalf of the appointor, to recover their debt.

AGM

An Annual General Meeting (AGM) exists where company directors share information with shareholders about the past year’s performance, and often provide forecasts and plans for the future. Shareholders of that company remain therefore allowed to discuss their opinions and vote for any eligible changes, such as auditors and directors.

Annulment

The act of voiding or invalidating a decision taken.  Bankruptcy may then be annulled if demonstrated that the individual should not have been made bankrupt.

Arrears

A term used when a debt has not received payment on time and has become overdue. If the debt remains not paid, then action may be taken to reclaim the money.

Assets

Anything owned by the individual or company, which has a value either now or in the future. Examples include vehicles, shares, money in the bank or hand, property and book debts. Less obvious assets may be intangible, such as goodwill, patents, “brands” or equitable contracts.

Bailiff

Bailiff works on behalf of the court to collect a debt. Several types of bailiffs whose powers vary, and they act differently. Bailiffs can be instructed to seize goods for payment of debts if an individual or company fails to pay a debt. (such as through a County Court Judgement or CCJ): they can also be used to repossess the property.

Bankruptcy consequences

Consequences of bankruptcy include losing control of assets, restrictions on the ability to obtain credit, and not being allowed to act as a company director. Some occupations specifically indicate that becoming bankrupt constitutes a breach of employment terms, so we recommend you read your employment contract. Bankruptcy will also significantly and negatively impact your credit rating.

Bankruptcy order

A court order makes an individual bankrupt.

Bankruptcy petition

A creditor may only petition (creditor’s petition) for individual bankruptcy if the debt is unsecured, and for a quantifiable sum over £750.  Bankruptcy can also be petitioned for by a group of creditors if the combined sum is due to more than £750.  A debtor can also petition for their bankruptcy (debtor’s petition) if they remain aware they are unable to pay their debts. The proceedings will generally take place in a local court with bankruptcy jurisdiction. For more information, visit http://www.insolvency.gov.uk

Bankruptcy restrictions order or undertaking

A bankruptcy restriction order or undertaking where a restriction mad