Bankruptcy is usually the last resort for individual and creditors. It is a Court procedure governed by the Insolvency Act 1986 and generally involves a sale of the Bankrupt's assets, in order to raise as much money as possible to repay the Bankrupt's debts.

Also, where a Bankrupt earns more than his or her family's reasonable living costs, then a Bankrupt can also be required to pay monthly contributions toward their debts, for period of up to three years.

A Bankruptcy Order will typically be advertised in a newspaper local to where the Bankrupt lives or trades from. Unless there are exceptional circumstances, the Bankruptcy will last for no more than one year, although certain restrictions may be imposed both during and after the Bankruptcy has come to an end.