How an individual becomes bankrupt, what happens to their property, and how the process ends — the framework that governs personal insolvency from petition to discharge.
Bankruptcy strips a debtor of their assets in exchange for a fresh start, and every stage of that exchange is tightly regulated by statute. This chapter opens with the purpose of bankruptcy and the two routes in: a creditor's petition — with its debt requirements, statutory demands and the petition hearing — and the debtor's own application. It then follows the trustee's work: what vests in the bankruptcy estate and what is excluded, the special treatment of the family home and income payments orders, and how creditors prove their debts and share in the distribution. Finally, it covers the trustee's power to unwind transactions at an undervalue and preferences, the restrictions on an undischarged bankrupt, automatic discharge and the debts that survive it, and the alternatives of annulment and individual voluntary arrangements.
