Bankruptcy

In the UK Bankruptcy relates only to individuals and partnerships. Companies and other corporations enter into differently-named legal insolvency procedures such as: liquidation and administration.

Bankruptcy is a legally declared inability or impairment of ability of an individual or partnership to pay their creditors. Creditors may file a bankruptcy petition against a debtor ("involuntary bankruptcy") in an effort to recoup a portion of what they are owed. In the majority of cases, however, bankruptcy is initiated by the debtor (a "voluntary bankruptcy" that is filed by the bankrupt individual or partnership).