UK Mortgage definition

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Bankruptcy

Occurs when an individual is deemed insolvent by a County Court under the provisions of the Insolvency Act 1986. A bankruptcy petition can be initiated by the individual himself or his creditors. Once granted, it remains in force for three (sometimes two) years. Most lenders have a clause in their mortgage conditions which provides a right to possession on bankruptcy, though this is seldom pursued unless the account goes into arrears. A mortgage lender can require mortgage payments to be made direct by the bankrupt person rather than via an Official Receiver or Trustee in Bankruptcy.