In just over a month, new insolvency rules come into force. There are quite a few changes, most notably, the incorporation of digital practices in legal procedures. The new rules replace the Insolvency Rules 1986 and their 28 subsequent amendments with the aim to improve the overall insolvency system, making procedures more efficient and cost-effective for all parties involved.
The new rules also include modernised and gender-neutral language. Repeated texts have been removed and the general content has been adapted to make the complex rules easier to understand for all. This will improve the quality and value for all users.
Here are the main changes to the insolvency rules:
- Physical creditors meetings will no longer be mandatory and instead can take place online via a virtual meeting or video conference, for example. Creditors can still request a face-to-face meeting if they wish.
- Correspondence and communication with creditors will be made electronically, giving the option to gain access to documents and important information online in a secure way.
- All final meetings of creditors are to be abolished
- Creditors will be able to opt out of future correspondence, notices or reports that they are no longer interested in. They have been unable to make this request until now.
- The liquidator or administrator of a company can pay back a creditor owed less that £1000, without the creditor having to submit a formal claim first.
The biggest positive change will be a reduction in costs as a result of fewer creditors meetings. This will mean creditors will see a greater return in dividends.
The Insolvency (England and Wales) Rules 2016 will be introduced from 6th April 2017.