The Enterprise Act 2002 has
made significant changes in the treatment of corporate and
personal insolvencies. Almondbury Finance, based in Huddersfield,
West Yorkshire will work with Insolvency Practitioners to
find a workable solution for your business recovery.
From the point of view of companies the
Act has been designed to Streamline the procedure of administration
to make it more efficient and accessible in order to facilitate
business recovery of viable companies, and, if this is not
reasonably practicable, one of the other two objectives provided
for. Further to this, restrict the ability to appoint an administrative
receiver to lenders who hold pre-existing floating charges,
or who are financiers involved in certain capital market and
other transactions where they must be able to appoint an administrative
receiver if the market is to operate effectively. In addition
powers have been introduced to extend certain insolvency proceedings,
with modifications, to foreign companies, Industrial and Provident
Societies and Friendly Societies.
As far as the individual is concerned the
Act is intended to reduce the number of restrictions that
are automatically imposed on undischarged bankrupts and provide
for the automatic discharge of nearly all bankrupts after
a maximum of 12 months. Alongside this Bankruptcy Restrictions
Orders (BROs) will be introduced to protect the public and
the commercial community from bankrupts whose conduct before
and during bankruptcy has been found to be culpable. As an
administrative alternative Income Payments Agreements (IPA)
are to be introduced to replace court-based Income Payments
Orders (IPO). IPAs will carry the same conditions as IPOs
and both will be able to run for a period of up to three years.
The Official Receiver (OR) will be enabled
to act as nominee and supervisor of new fast-track IVAs begun
after bankruptcy order has been made.The Official Receiver
will be required to investigate why a bankrupt failed only
where he thinks that this is necessary. A limit of three years
will be placed on the period in which a trustee may deal with
a bankrupt's interest in the sole or principal home of the
bankrupt, the bankrupt's spouse or a former spouse before
that interest revert to the bankrupt.
The Crown's preferential rights in all insolvencies
are to be removed and further to this provision made to ensure
unsecured creditors are major beneficiaries. The financial
regime of The Insolvency Service is to be reformed, making
it simpler, fairer to creditors and more transparent. Changes
to the Insolvency Services Account will maximise the investment
return to estates.
The Act's provisions on corporate insolvency
and the abolition of Crown preference will come into force
on 15 September 2003. The individual insolvency provisions
and those reforming the Insolvency Service's financial regime
will come into force on 1 April 2004. The new administration
procedure will commence on 15th September 2003, but any administration
where the administration petition was filed (or lodged) or
the administration order was made prior to that date will
continue under the existing legislation.
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