Insolvency - A Second Chance

In 2004 the Enterprise Act Bill (2002) was brought in to enable innocent and simple bankrupts to be discharged within just one year. Prior to that the term had been three years.

The Government's white paper – Insolvency: A Second Chance includes various proposals for the reform within the realms of personal and corporate insolvency.

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The proposals on personal insolvency reform recognise that honest failure is an inevitable part of a dynamic market economy and that those who do fail should be enabled to start again.

"Fresh Start" proposals for personal bankruptcy give another chance to many, with a tough regime for those who conduct their financial affairs irresponsibly or recklessly. The whole aim is to make it fairer and give people a fair second chance. (After all, the majority of successful business leaders have at least one failed business under their belt).

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“On the corporate side, the proposals will give businesses in difficulties more of a chance and will promote collective insolvency procedures, providing unsecured creditors with a greater say in the process and the outcome,” says a spokesperson for the Government's Insolvency Service.

The Government will also abolish the Crown's preferential right to recover unclaimed taxes ahead of other creditors in all insolvencies.

Great news for individuals and businesses, but, with bankruptcy being made to be a more attractive option to escaping the debt trap, this will mean a whole lot of added pressure for the official receivers office to deal with the extra work load.

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