Insolvency Service
Encyclopedia
The Insolvency Service is an executive agency of the United Kingdom
's Department for Business, Innovation and Skills
(DBIS) which:
” (IVA). This is a formal arrangement through an insolvency practitioner to pay an agreed amount off your debts over a fixed period. This usually means paying a monthly installment usually over 5 years. The rest of the debts are written off.
Some IVAs are set up on the basis of using a lump sum (e.g. from a remortgage) to make offers to the creditors rather than make monthly payments. Some IVAs are a mixture of both. If a creditor is petitioning for bankruptcy the debtor can apply for an Interim Order which will stop all court action for 28 days. Only one Interim Order can be applied for within 12 months. Since the Insolvency Act 1986 was updated in 2000 it is no longer obligatory to apply for an Interim Order before applying for an IVA.
The corporate version of an IVA is an CVA (Company Voluntary Arrangement), which would run in a similar line to that of an IVA with the agreement with creditors relating to periodical contributions, interest in assets, third party payments and would usually have the affect of paying creditors less than they are actually owed. .
, the Insolvency Act 2000, the Company Directors Disqualification Act 1986
and the Employment Rights Act 1996
. Insolvency Service staff are based across the UK in a network of 38 Official Receiver offices throughout England and Wales;
Enforcement Directorate and Headquarters in London, Birmingham, Manchester and Edinburgh; Banking Section in Birmingham; and its Redundancy Payments offices in Edinburgh, Birmingham and Watford. As of 1st April 2006 Companies Investigation Branch of BERR transferred to The Service and is based in offices in both London and Manchester. The new Debt Relief Order
s which came into force on 6 April 2009 under the Tribunals, Courts and Enforcement Act 2007
are not dealt with by Official Receivers Offices but at the Services Plymouth office.
The Inspector General and Agency Chief Executive is the Agency Accounting Officer and is responsible for the day-to-day running of the Service. The current Inspector General is Stephen Speed.
Due to a decreasing case load over recent years the Isolvency Service has gone through major changes, mainly in personnel. 2010 saw the loss of the temporary/contract staff and by the spring of 2011 a large number of permanent staff had taken some form of redundancy. Further changes are being looked at by the Insolvency Service, which will include a further reduction in staffing levels and a movement of staff due to a reduction in the number of offices.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
's Department for Business, Innovation and Skills
Department for Business, Innovation and Skills
The Department for Business, Innovation and Skills is a ministerial department of the United Kingdom Government created on 5 June 2009 by the merger of the Department for Innovation, Universities and Skills and the Department for Business, Enterprise and Regulatory Reform .-Ministers:The BIS...
(DBIS) which:
- administers and investigates the affairs of bankrupts, of companies and partnerships wound up by the court, and establishes why they became insolvent;
- acts as trusteeTrusteeTrustee is a legal term which, in its broadest sense, can refer to any person who holds property, authority, or a position of trust or responsibility for the benefit of another...
/liquidatorLiquidator (law)In law, a liquidator is the officer appointed when a company goes into winding-up or liquidation who has responsibility for collecting in all of the assets of the company and settling all claims against the company before putting the company into dissolution....
where no private sector insolvency practitioner is appointed; - acts as nominee and supervisor in fast-track individual voluntary arrangements;
- takes forward reports of bankrupts’ and directors’ misconduct;
- deals with the disqualification of unfit directors in all corporate failures;
- deals with bankruptcy restrictions orders and undertakings;
- authorises and regulates the insolvency profession;
- assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay its employees;
- provides banking and investment services for bankruptcy and liquidation estate funds;
- advises DBIS ministers and other government departments and agencies on insolvency, redundancy and related issues; and
- provides information to the public on insolvency and redundancy matters via their website, publications, Central Enquiry Line and Redundancy Payments Helpline.
Individual Voluntary Arrangement (IVA) Overview
There is an alternative to bankruptcy called an “Individual Voluntary ArrangementIndividual Voluntary Arrangement
In the UK, an Individual Voluntary Arrangement is a formal alternative for individuals wishing to avoid bankruptcy.The IVA was established by and is governed by Part VIII of the Insolvency Act 1986 and constitutes a formal repayment proposal presented to a debtor's creditors via an Insolvency...
” (IVA). This is a formal arrangement through an insolvency practitioner to pay an agreed amount off your debts over a fixed period. This usually means paying a monthly installment usually over 5 years. The rest of the debts are written off.
Some IVAs are set up on the basis of using a lump sum (e.g. from a remortgage) to make offers to the creditors rather than make monthly payments. Some IVAs are a mixture of both. If a creditor is petitioning for bankruptcy the debtor can apply for an Interim Order which will stop all court action for 28 days. Only one Interim Order can be applied for within 12 months. Since the Insolvency Act 1986 was updated in 2000 it is no longer obligatory to apply for an Interim Order before applying for an IVA.
The corporate version of an IVA is an CVA (Company Voluntary Arrangement), which would run in a similar line to that of an IVA with the agreement with creditors relating to periodical contributions, interest in assets, third party payments and would usually have the affect of paying creditors less than they are actually owed. .
Working under the Insolvency Acts
The Insolvency Service operates under a statutory framework – mainly the Insolvency Act 1986Insolvency Act 1986
The Insolvency Act 1986 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.-History:...
, the Insolvency Act 2000, the Company Directors Disqualification Act 1986
Company Directors Disqualification Act 1986
Company Directors Disqualification Act 1986 is a piece of UK company law, which sets out the procedures for company directors to be disqualified in certain cases of misconduct.-History:...
and the Employment Rights Act 1996
Employment Rights Act 1996
The Employment Rights Act 1996 is a United Kingdom Act of Parliament passed by the Conservative government to codify the existing law on individual rights in UK labour law. Previous statutes, dating from the Contracts of Employment Act 1963, included the Redundancy Payments Act 1965, the...
. Insolvency Service staff are based across the UK in a network of 38 Official Receiver offices throughout England and Wales;
Enforcement Directorate and Headquarters in London, Birmingham, Manchester and Edinburgh; Banking Section in Birmingham; and its Redundancy Payments offices in Edinburgh, Birmingham and Watford. As of 1st April 2006 Companies Investigation Branch of BERR transferred to The Service and is based in offices in both London and Manchester. The new Debt Relief Order
Debt Relief Order
Chapter 4 of the Tribunals Courts and Enforcement Act 2007 introduced Debt Relief Orders as a new form of bankruptcy in the United Kingdom. A DRO will be a simplified, quicker and cheaper alternative to bankruptcy in the United Kingdom, suitable for debtors who have few or no assets and little...
s which came into force on 6 April 2009 under the Tribunals, Courts and Enforcement Act 2007
Tribunals, Courts and Enforcement Act 2007
The Tribunals, Courts and Enforcement Act 2007 is an Act of the Parliament of the United Kingdom. It provides for several diverse matters relating to the law, some of them being significant changes to the structure of the courts and fundamental legal procedures...
are not dealt with by Official Receivers Offices but at the Services Plymouth office.
The Inspector General and Agency Chief Executive is the Agency Accounting Officer and is responsible for the day-to-day running of the Service. The current Inspector General is Stephen Speed.
Due to a decreasing case load over recent years the Isolvency Service has gone through major changes, mainly in personnel. 2010 saw the loss of the temporary/contract staff and by the spring of 2011 a large number of permanent staff had taken some form of redundancy. Further changes are being looked at by the Insolvency Service, which will include a further reduction in staffing levels and a movement of staff due to a reduction in the number of offices.
See also
- Simplified Individual Voluntary ArrangementSimplified Individual Voluntary ArrangementIn the United Kingdom, a Simplified IVA was a proposed new form of IVA , which would have been a formal alternative of clearing debt without being declared bankrupt.The new regime was likely to have been two tiers:...
- BankruptcyBankruptcyBankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
- LiquidationLiquidationIn law, liquidation is the process by which a company is brought to an end, and the assets and property of the company redistributed. Liquidation is also sometimes referred to as winding-up or dissolution, although dissolution technically refers to the last stage of liquidation...
s - Administrations
- Administrative Receiverships
- Trust DeedsProtected Trust DeedA trust deed is a voluntary but formal arrangement that is used by Scottish residents where a debtor grants a ‘trust deed’ in favour of the trustee which transfers their estate to the trustee for the benefit of creditors. It can be a way for people to deal with debt problems...
(only available in Scotland) - United States Trustee ProgramUnited States Trustee ProgramThe United States Trustee Program is an agency of the United States Department of Justice that is responsible for overseeing the administration of bankruptcy cases and private trustees. The applicable federal law is found at 28 U.S.C. § 586 and 11 U.S.C. , et seq.In addition to the twenty-one...