Do you know what rule changes are coming on 6 April 2017?
As you may be aware, there has been massive upheaval in the Insolvency world in which the Insolvency Rules that we – Insolvency Practitioners (“IPs”) have followed in some shape or form since 1986 have changed significantly.
The Insolvency Rules 1986 are being replaced by the new Insolvency (England and Wales) Rules 2016 that will come into effect on the 6th April 2017. The overall purpose is to reduce red tape, make communication with creditors easier and a drive to save money so as to increase the return to creditors.
The main rule changes made will be:
- There will no longer be creditors’ meetings at the start of a creditors voluntary liquidation unless a physical meeting is specifically requested by at least 10% by value of creditors or 10% in total number of creditors or 10 individual creditors
- Final meetings no longer have to be convened
- Electronic communication will be encouraged; for example the use of emails and websites to give information to creditors
- Creditors have the choice to opt out of communications with the IP completely
- If a creditor’s claim is for less than £1,000 then the Insolvency Practitioner may admit the claim.
It remains to be seen whether the above changes actually cut red tape and reduce costs or has insolvency law been tangled up further.
In the course of the next seven weeks, IRL will cover the changes to the main insolvency processes and how they will affect your clients whether they are seeking insolvency advice or are owed money by a company/individual that is going through an insolvency process.