Different Types of Bankruptcy
In the United States of America, there are six different types of bankruptcy. You will have heard them quoted on television programmes as 'Chapter 11 Bankruptcy' etc. However, in the United Kingdom, the term 'bankruptcy' is only used for individuals and business partnerships. An individual's bankruptcy is also known as Personal Insolvency. A bankruptcy is filed when someone is legally incapable of repaying their creditors what they owe them.
Businesses that go bankrupt use other terms such as Administration, Insolvency, Liquidation and Receivership. The media will still refer to a business as going bankrupt or bust. In Scotland, the term for bankruptcy is sequestration, a word that has connotations with seizure.
With the other alternatives available, debtors might be better served by an Individual Voluntary Arrangement, an agreement to pay an affordable monthly amount to the IVA that is then shared amongst the creditors. This is often preferrable to many debtors, who would prefer to keep their assets, rebuild rather than devastate their chances of future credit and keep their names out of the paper.
Did you know that in England and Wales, it is possible for ANYONE to search the Insolvency Service's website for the names of bankrupts?