- Bankruptcy is intended to relieve individuals from liabilities when they are no longer able to settle them.
- It is appropriate where there are no obvious advantages in arranging a rescheduling or reduction of those debts through an individual voluntary arrangement (IVA).
- It is not however an efficient way of realising assets for the benefit of creditors, with many of its procedures dating back to 19th and early 20th Century when attitudes to bankruptcy were different. Assets are usually sold piecemeal and continuing to trade a business to preserve value for creditors is almost impossible.
- The trustee who manages the bankruptcy does however have wide powers to deal with previous transactions that have adversely affected creditors and so bankruptcy can often follow fraud situations.
- The Enterprise Act 2002 updated the bankruptcy procedure. These changes are intended to differentiate between the "honest" and "delinquent" bankrupt, generally making bankruptcy are more attractive procedure for those in the former category. These changes came into force in April 2004.
- Even after the Enterprise Act 2002 upgrade, bankruptcy continues to offer poor returns for creditors because of the unwieldy nature and the costs involved.
KIS can provide you with prompt and constructive advice if you are experiencing financial difficulty or simply need to explore financial options.
The sooner you seek advice from an experienced specialist, the greater the opportunity to reverse financial difficulties or resolve monetary issues.
KIS provide initial explorative consultations, held at our offices, which are undertaken free of charge and overseen by one of our two experienced and licensed Insolvency Practitioners.
Act now and contact KIS today to arrange a consultation
Tel: +44 (0)208 441 2000
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