Bankruptcy laws have changed somewhat over the years. Here, I outline the current sources and a tiny amount of history. The information here relates to the jurisdiction of England and Wales. Bankruptcy laws are different from those in the UK.

Sources

Without going into complexities about how the law works, I list the primary sources of bankruptcy legislation below:

  • Part IX Insolvency Act 1986 as amended
  • Insolvency Rules 1986
  • Enterprise Act 2002
  • Other Acts that have the effect of amending the Insolvency Act
  • EU Law

The Insolvency Act is the primary source of bankruptcy law and defines how the bankruptcy estate can be protected and realised for the benefit of the creditors. Further, it represents the discharge of a debtor’s debts and what constitutes a bankruptcy debt.

If you are interested in finding these sources, you could take a look at:

Further to statutes, case law also exists. Case law is previous judgements made in bankruptcy law and other places that may help make future court judgements.

History

Bankruptcy law has been around for a long time. Would you believe that pre-1869, you could have ended up in prison for non-payment of debts? Thankfully, this was abolished.

Some significant reforms have changed insolvency law over the years. Most notable are:

  • The Bankruptcy Act 1869
  • The Bankruptcy Act 1883
  • The Bankruptcy Act 1914
  • The Insolvency Act 1986
  • The Enterprise Act 2002

As you may well have heard the Enterprise Act 2002 made some fundamental changes to bankruptcy law. A controversial aspect of these changes was the reduction in the period that an individual is subject to bankruptcy to one year. To counter this apparent relaxation in law was the introduction of bankruptcy restriction orders for dishonest or reckless bankrupts.

The purpose of the Enterprise Act was to amend bankruptcy laws so that they were aligned with the entrepreneurship ethos being promoted at the time. Perhaps unintended consequences were that neighbouring European individuals would enter the UK to take advantage of the softer UK bankruptcy laws.

Read more on the history of bankruptcy laws here.