F: Insolvency & Bankruptcy

Question	Answer
Governed by Insolvency Act 1986 as amended by Enterprise Act 2002	Debtor must owe at least £750 Statutory demand not complied with within 3 weeks
Official receiver takes control of debtors property	Trustee in bankruptcy may be appointed as insolvency practitioner at meeting of creditors
Trustee realises and distributes bankrupt's estate	Debtors entitled to retain 'tools of their trade inc. vehicle if needed for employment
Enterprise Act 2002 made changes to extent which home is part of bankrupt's estate	Creditors do not normally get all their money back
Trustee converts bankrupt's property into money to pay debts	1. Costs of bankruptcy 2. Preferential debts 3. Ordinary unsecured creditors
Normally continues for 12 months under Enterprise Act 2002	Disqualifications include acting as company director and obtaining credit > £500 without disclosure
Liquidation brings existence of company to an end and administers property to creditors	Liquidator take control of company, collects assets, pays debts, and distributes surplus to members
Alternatives to liquidation: 1. Administration - administrator runs company as going concern	2. Voluntary arrangement - satisfactory settlement between company and creditors
Company is dissolved and removed from Register of Companies	Creditors have to make formal claim to recover their money

Resource summary

	Created by Mark Varela about 10 years ago