Insolvency Made Clear: A Guide for Debtors

Insolvency Law Made Clear – A Guide For Debtors
‘Proving’ a debt means demonstrating to the Trustee in Bankruptcy or liquidator
that the individual or company owed the creditor the debt. It can be as
simple as sending them an invoice. Only certain debts are ‘provable’: the list is
set out on in Box 8 on page 26.
To ‘realise’ property is to sell it.
The ‘respondent’ is the defendant to an application. If a debtor applies to set
aside a statutory demand, the debtor is the applicant and the creditor is the
respondent.
The ‘Rules’ refer to the Insolvency (England and Wales) Rules 2016. If a reference
is in the form (r[number]), it will be to the Rules. They can be found at
https://www.legislation.gov.uk/uksi/2016/1024/contents/made.
The ‘Secretary of State’ is shorthand for the Secretary of State for Business,
Energy and Industrial Strategy. In practice, the Minister’s decisions will be made
through the Insolvency Service.
‘Security’ for a loan is when, if the debtor defaults, the lender has some claim
over an item. The lender can then sell that item and repay their own debt. The
most common example is a mortgage, where the lender has a right to the house
on which the mortgage is secured if the debtor does not pay. To ‘secure’ a debt
is to provide security for it.
‘Secured’ creditors hold security. ‘Unsecured’ creditors do not.
‘Service’ of a court document means how it is to be given to its recipient. Two
examples are service by post and ‘personal service’ where the recipient is given a
document in person. It is usually enough to send a document by email. Certain
documents, in particular statutory demands and bankruptcy petitions, have
special requirements and must be served personally.
A ‘statement of truth’ is a formal declaration by someone that the contents of the
document is true to the best of their knowledge and belief.
A ‘statutory demand’ is a formal request for payment. It must state that it is a
statutory demand.
A ‘stay’ of a claim, application or an order is when the court decides that it
should be paused.
‘Solvency’ is the opposite of ‘insolvency’. If someone is solvent, they can pay
their debts, and their total assets are greater than their debts.
xxvi