2017 was the year the insolvency world of England and Wales modernised. As we are all well aware the new Insolvency Rules (England and Wales) 2016 went live on 6 April 2017 along with the coming into force of the insolvency parts of the Small Business, Enterprise and Employment Act 2015.
The new rules have been in use for nearly 6 months now, so it’s a good time to take a look back and recap on the requirements of the new law.
Forms aren’t what they used to be
The insolvency forms for the Registrar of Companies are no longer prescribed by insolvency legislation, instead their format, style and content are now under Companies House legislation. This change resulted in Companies House producing brand new forms for all aspects of corporate insolvency.
The new legislation also saw the rest of the remaining forms and their form numbers previously prescribed by the insolvency act removed. Under the new rules, Insolvency Practitioners have instead been given the details of what the form should contain rather than how they should look.
The introduction of Decision Procedures has seen an increase in the options now available to an Insolvency Practitioner when looking to pass resolutions. For example, there are now three Decision Procedures available for the appointment of a liquidator in a Creditors’ Voluntary Liquidation; Deemed Consent, Virtual Meeting and Physical Meeting.
Final meetings are no more
The updated legislation has seen the abolishment of the need to call a final meeting in a bankruptcy and in each of the three liquidation types.
Opting Out and Websites
With the exception of dividend related correspondence creditors are now able to say that they no longer wish to receive information about an insolvency assignment.
A notice must be sent to creditors advising how a creditor opts out.
Websites can also be used as the means to provide correspondence once a notice has been sent to creditors.
Claims under £1,000
To help with the declaration of dividends the new rules allow Insolvency Practitioners to include and pay creditors who have an estimated claim of less than £1,000 but have not yet provided a proof of debt.
Individual’s Privacy in a Statement of Affairs
Unfortunately identity theft is a growing problem and the new rules recognised privacy concerns around this in the statement of affairs. Insolvency Practitioners must now show ex-employees, employees and personal consumer deposit creditors on a separate schedule and this schedule should be removed before the statement of affairs is sent to Companies House.
We haven’t reached the end yet
The team at VisionBlue (now Aryza) worked tirelessly to ensure all the requirements outlined above were implemented to our case management solution to be utilised by our clients. We are aware that legislation will be out soon which will look to amend some of what came into force on 6 April 2017. As the phrase goes there is no rest for the wicked, and we will make amendments where required once the details of these legislation tweaks are known.