Insolvency relates to individuals (bankruptcy) and to companies (liquidations and receiverships). Insolvency is the inability to pay debts from income or assets and can manifest itself either directly in failure to pay a debt when it is due or when a company is proved to have debts which exceed its assets and/or the inability to pay debts as they fall due.
The laws and practices relating to the insolvency of an individual are different from those relating to a company. An individual may face bankruptcy proceedings once a judgment is entered against him or her and that person has committed an act of bankruptcy. A company may face liquidation proceedings in a variety of situations, including a failure to pay a debt the subject of a legitimate statutory demand.
The consequences of insolvency are far reaching for an insolvent individual or company and creditors. Directors can face considerable exposure for breaches of the Companies Act 1993, including for reckless trading in circumstances where they ought to have caused a company to cease trading earlier than it did.
Our members can advise on the legal principles and the practises and procedures that need to be followed in any insolvency situation and with prosecution or defence to civil claims in an insolvency context and defence of criminal proceedings.
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