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There is also a UK insolvency law which applies across the United Kingdom, since bankruptcy refers only to insolvency of individuals and partnerships. Other procedures, for example administration and liquidation, apply to insolvent companies. However, the term 'bankruptcy' is often used when referring to insolvent companies in the general media.
Since the 1970s, particularly from the time of the Bankruptcy Reform Act of 1978 in the United States, and since the Insolvency Act 1986 in the UK, two broad strands of thought emerged. The first and very prominent view, stemming primarily from work by Thomas H. Jackson and Douglas Baird is known as the "creditors' bargain model". [ 222 ]
Administration in United Kingdom law is the main kind of procedure in UK insolvency law when a company is unable to pay its debts. The management of the company is usually replaced by an insolvency practitioner whose statutory duty is to rescue the company, save the business, or get the best result possible.
Key takeaways. There are two common types of bankruptcy: Chapter 7 and Chapter 13. Filing for bankruptcy is a time-consuming process that can take years to stop affecting your finances.
The Government have updated legislation (2016) to streamline the application process for UK bankruptcy. UK residents now need to apply online for bankruptcy - there is an upfront fee of £680. The process for residents of Northern Ireland differs - applicants must follow the older process of applying through the courts. [38]
In the UK, insolvency practitioners are subject to oversight and inspection by their recognised professional body. Insolvency is a regulated profession under the Insolvency Act 1986 [ 1 ] and anyone who wishes to practise as an IP needs to pass the JIEB exams ; a set of three examination papers set by the Joint Insolvency Examination Board (JIEB).
Bankruptcy is designed to be used as a last resort when you have exhausted all other options. Depending on the bankruptcy option you choose, you may be able to eliminate all or some of your debt ...
The full list of organisations approved by the Insolvency Service as competent authorities are listed on the .Gov.UK web site. [10] Upon receipt of the application and payment of the fee, an Official Receiver may make the order, administratively, without the involvement of the court if it appears that the applicant meets the requirements.