UK - England and Wales

The corporate provisions of the Enterprise Act 2002 came into force on 15 September 2003 and provide for streamlined administration proceedings, the eventual abolition of administrative receivership and the abolition of the preferential claims of the state in respect of taxes (income, corporate and value-added).

The individual insolvency provisions of the Enterprise Act 2002 came into force on 1 April 2004. These provisions introduce early discharge after one year (if not earlier), restrictions being placed on "culpable and irresponsible" bankrupts and the lifting of a range of prohibitions, disqualifications and restrictions currently automatically imposed as a consequence of bankruptcy. A reform to the education system currently before parliament will restore what was thought to be the status quo by making student loan debt non-provable or dischargeable.

Key Legislation

• Insolvency Act (1986)
• Company Directors Disqualification Act (1986)
  

Insolvency Procedures

Personal Insolvency Procedures

The following personal insolvency procedures are available in the UK:

• Individual Voluntary Arrangement (IVA)
• Bankruptcy.

Corporate Insolvency Procedures

The following corporate insolvency procedures are available in the UK:

• Administration
• Company Voluntary Arrangement (CVA)
• Receivership
• Liquidation

Roles

Role played by Government

The Insolvency Service is an executive agency within the Department of Trade and Industry and is responsible for:

• preliminary administration and investigation of all bankruptcies and compulsory winding up of companies
• acting as trustee/liquidator if no private sector insolvency practitioner is appointed
• reporting criminal offences in bankruptcies and compulsory winding ups and instituting disqualification proceedings against unfit directors in all corporate failures
• regulating insolvency practitioners, either directly or through recognized professional bodies
• providing banking and investment services for bankruptcies and liquidations of estate funds
• advising Ministers on insolvency policy issues

Role played by private sector practitioners

• realize and distribute assets in bankruptcies and compulsory winding ups (where appointed) and in all voluntary liquidations
• supervise all individual and corporate voluntary arrangements, administrative receiverships and administrations
• report to The Insolvency Service the conduct of directors in voluntary liquidations, administrative receiverships and administrations
• report to the Director of Public Prosecutions the commission of any offences in voluntary liquidations

Role played by the Court

• determine petitions by debtors and creditors for bankruptcy/compulsory winding up
• determine issues in insolvencies brought to them by The Insolvency Service, insolvency practitioners, insolvents, creditors and others

At a Glance

Does the insolvency system in the UK - England and Wales allow for:

1.	Different procedures for the insolvency of individuals and the insolvency of companies?
2.	Creditors to accept an arrangement outside of formal bankruptcy/liquidation proceedings?
3.	Priority payment for employee creditors?
4.	Priority payment for taxation debts?
5.	Automatic disqualification of directors of failed companies from managing other companies?
6.	Recognition of insolvency proceedings being conducted in another jurisdiction?
7.	A government agency to undertake insolvency administration work?
8.	Some form of licensing of private sector practitioners?
9.	A review of the remuneration claimed by an insolvency practitioner by either a court or other government regulator?
10.	A mandatory scale of fees applicable to insolvency practitioner remuneration?
11.	Surveillance of the work of private sector practitioners by a government regulator?
12.	Collation of insolvency statistics by a government regulator?