Changes to insolvency law: Need to know basis

The final article in this series covers off a number of ways that the basic processing of information will happen under the new rules and also acts as a reminder for a few of the miscellaneous provisions which we haven’t covered so far.

Statement of affairs

 

Along with all of the other statutory forms, there will be a significant change to the information provided in the statement of affairs. 

 

It’s been noted that as the statement of affairs is an item of public record and is at risk of divulging some personal data which some parties would prefer not to be published.

 

The new rules take this into account and state that all employee and customer details should be set out in a separate table and this will not be placed on the public record. Instead there’ll be a summary of claims within the statement of affairs and additional categories to cover this off. 

 

This will hopefully improve confidentiality for these stakeholders.

 

The insolvency register

 

Where someone is subject to a formal insolvency procedure, their name will be published on the Insolvency Register to ensure creditors have an independent point of reference to verify the insolvency. 

 

Previously, parties who were concerned they may be a victim of threats or violence because their details being published could previously apply to court to have their details suppressed. However, this had to be done after the event.

 

Due to concerns that this may reduce the number of people proceeding with insolvency procedures on this basis alone, the new rules allow for the application to be made prior to the insolvency event. 

 

This would ensure that details are suppressed from the commencement of the insolvency, offering wider protection and peace of mind. 

Debts of less than £1,000

 

The adjudication of creditors claims and chasing down proof of debt in order to pay out dividends can be a costly process in itself, particularly where the debt is a low value and creditors have little motivation to submit the same only to receive a small payout.

 

The new rules allow the insolvency practitioner to treat debts of less than £1,000 as proved for the purpose of expediting the dividend process and they will be able to simply write to these creditors advising it is their intention to pay a dividend at this level and unless they object, they’ll then receive a dividend based on this amount.