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Bankruptcy & Insolvency Glossary UK: Key Terms

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Part ofBankruptcy & Insolvency UK

Written by Brad Askew Solicitor (non-practising)
Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice.
Updated June 2026 · England & Wales
When a business or an individual runs into serious financial trouble, the language used by accountants, courts and insolvency practitioners can feel like a foreign dialect. Words such as administration, moratorium and administrative receiver get thrown around, often without anyone pausing to explain what they actually mean in practice. This glossary sets out the core bankruptcy and insolvency terms used in England and Wales, written in plain English so you can follow a conversation with your accountant, read a letter from a creditor, or understand a court notice without reaching for a textbook. It is designed as a reference, dip in and out as you need, and pair it with proper guidance before making any decisions that affect your company, your home or your personal finances.

Overview

A bankruptcy and insolvency glossary is a reference tool that gathers the technical terms used when a person or business cannot pay their debts as they fall due. In the UK, personal insolvency (bankruptcy) and corporate insolvency (including administration and liquidation) are governed primarily by the Insolvency Act 1986, along with the Insolvency Rules and later reforms.

The vocabulary in this area is specialised because each term carries a specific legal meaning, an administrator is not the same as an administrative receiver, and a moratorium is not the same as a stay of proceedings. Getting the terminology right matters.

The wrong word in the wrong place can change the rights of creditors, the duties of directors or the options available to someone facing personal debt problems. This glossary covers the foundational terms you are most likely to encounter early in the process, so you can move forward with a clearer head.

Key steps

  1. Read the term in context. Do not pluck a definition from a glossary and apply it in isolation. Look at the letter, notice or conversation where the word appeared, and work out who is using it and why. The same word can carry slightly different weight depending on whether it comes from a creditor, a court or an insolvency practitioner.
  2. Check whether it relates to a person or a company. Bankruptcy in strict legal terms applies to individuals in England and Wales, while companies go through processes such as administration, liquidation or a company voluntary arrangement. Identifying which track you are on narrows the relevant terms quickly and stops you chasing the wrong procedure.
  3. Identify the governing legislation or rules. Most insolvency terminology traces back to the Insolvency Act 1986 as amended, the Insolvency Rules 2016 and related regulations. Knowing the source helps you test whether a definition you have been given online is current, because this area has been reformed several times and older material can mislead.
  4. Map the term to a stage of the process. Ask whether the word describes a trigger (such as a statutory demand), a formal process (such as administration), a role (such as an administrator) or an outcome (such as discharge). Placing the term on that timeline helps you see what is likely to happen next and what options remain open.
  5. Get tailored guidance before acting. A glossary builds vocabulary, not strategy. Before you sign documents, make payments to creditors or respond to court papers, speak to an experienced legal adviser who can give you practical perspective on your specific situation based on what you describe.

Common questions

If you're dealing with this kind of situation, a call with an experienced legal adviser can help you work out the right next step — from £149.

Common questions

Q What is the difference between bankruptcy and insolvency?
Insolvency is the underlying financial state, being unable to pay debts as they fall due or having liabilities greater than assets. Bankruptcy is a specific legal process that applies to individuals in England and Wales who are insolvent. Companies do not go bankrupt in the strict UK legal sense, they enter procedures such as administration, liquidation or a company voluntary arrangement.
Q Who can apply for an administration order?
An administration order may be sought by the company itself, its directors, or a qualifying creditor, depending on the circumstances. The court needs to be satisfied that the company is, or is likely to become, unable to pay its debts and that administration is likely to achieve one of the statutory objectives, such as rescuing the company as a going concern or producing a better outcome for creditors than liquidation.
Q What does an administration moratorium actually stop?
Broadly, it pauses most enforcement action against the company while the administrator works on a plan. Creditors cannot usually start or continue legal proceedings, enforce security or repossess goods without the administrator's consent or permission from the court. The precise scope is set by statute, so the protection is not unlimited and some rights, for example certain financial contracts, can be treated differently.
Q Is an administrative receiver the same as an administrator?
No. An administrator is appointed to act in the interests of the creditors as a whole and follows a statutory purpose set out in the Insolvency Act. An administrative receiver is appointed by a secured creditor, typically under a qualifying floating charge, and acts primarily to recover what is owed to that creditor. Reforms have significantly restricted when new administrative receivers can be appointed.
Q What counts as a bankruptcy debt?
Bankruptcy debt generally refers to debts the individual owed at the date of the bankruptcy order, together with certain contingent liabilities, which can be dealt with through the bankruptcy. Some obligations, such as court fines, certain family orders, student loans and debts obtained through fraud, are typically not released on discharge. The detail depends on the type of debt, so specific queries are best checked carefully.
Q Do I need a bankruptcy adviser or can I handle it myself?
It is possible to petition for your own bankruptcy online through the official service, and some people manage the process without professional input. In many cases, however, the choices before bankruptcy (such as a debt relief order, IVA or informal arrangement) are worth exploring first. Talking to an experienced adviser early gives you clarity on your circumstances before you commit to a formal route.
Q How long does bankruptcy last in the UK?
A bankrupt individual is usually discharged after a set statutory period, often around twelve months, although restrictions can be extended where conduct has been unsatisfactory through a bankruptcy restrictions order or undertaking. Discharge releases the person from most bankruptcy debts, but it does not wipe the record from credit files immediately and certain consequences, such as disclosure obligations, can continue.
If you're dealing with this kind of situation, a call with an experienced legal adviser can help you work out the right next step — from £149.

Sources

This guide is based on primary UK law and official guidance.

Brad Askew, Solicitor (non-practising)

Written & reviewed by

Brad Askew Solicitor (non-practising)

Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice. LegalDocuments.co.uk is not a law firm and does not provide regulated legal advice.

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Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.