The UK has issued the Insolvency Act of 1986 and the Insolvency Act of 2000, the second of which amends the first. Each Insolvency Act deals with three groups: companies, individuals, and then a combination of the two former. The Insolvency Act establishes the legal basis for all aspects related to insolvency in the UK, and basically governs everything related to bankruptcy, insolvency, and IVAs (Individual Voluntary Arrangements).
Although changes have been made to the Insolvency Act less than a decade ago, Chris Hughes and Gillian Tett of FT.com report that ?London?s status as a leading financial centre could be diminished unless the UK reforms its insolvency (act)? ahead of the next economic downturn, according to an influential group of restructuring professionals.? The same report says that, ?the ability of a legal system to adapt to the needs of investors is critical to London?s status as a global financial centre?? Due to irregular practices surrounding the insolvency act and the complication of global business, the European High Yield Association (EHYA) ?would like to see a system that adopts some of the practices of a US-style Chapter 11 process, which provides a systematic structure within which the interests of all investors can be managed for the good of the majority? (Paul Davies, FT.com, Feb 25, 2008).
The insolvency act is a long and complex document which is probably best understood by its practical applications for individuals. Consider the following: What is insolvency? How does one declare insolvency? What are the advantages and disadvantages of insolvency? And, are there any better alternatives to insolvency? If you are in a difficult financial position and see no way out of your debt, it is most likely best to consult a reputable financial advisor who can break down the insolvency act into a for-all-intents-and-purposes plan for you.