Insolvency proceedings

   CITYWIDE Solicitors- Insolvency Proceedings

CITYWIDE Solicitors provide expert advice on insolvency proceedings for individuals, LLPs, partnerships, and sole traders under the Insolvency Act 1986.

Understanding Insolvency Proceedings

Insolvency proceedings, as defined under the Insolvency Act, include:

• Any proceedings under the Act, the Insolvency Rules, the Administration of Insolvent Estates of Deceased Persons Order 1986 (S.I. 1986 No.1999), the Insolvent Partnerships Order 1994 (S.I. 1994 No. 2421), or the Limited Liability Partnerships Regulations 2001.
• Any proceedings under the EC Regulation on Insolvency Proceedings or the Cross-Border Insolvency Regulations 2006 (S.I. 2006/1030).

These proceedings are applicable to individuals, partnerships, and companies unable to pay their debts. The court must be satisfied of this inability before a company can be wound up or an individual declared bankrupt.

What is Insolvency?

For companies or partnerships, insolvency is determined if the value of assets is less than liabilities, including future or contingent liabilities. A creditor may apply for an insolvency petition if a company cannot pay a debt of £750.

For individuals, if debts exceed £5,000 and there is no reasonable prospect of repayment, a creditor might present an insolvency petition.

Insolvency Process and Legal Support

Insolvency is a complex and lengthy process. CITYWIDE Solicitors can advise at any stage, including before liquidation or during an investigation by the Insolvency Service. This also applies if a creditor’s petition has been presented to the court.

Insolvency proceedings involve managing cash, assets, property, and other assets. For companies, professional indemnity cover determines the liability of directors, partners, and members. Once a creditor presents an insolvency petition, charges may be applied to property at the Land Registry, initiating the proceedings.

Managing Creditors and Outstanding Debts

CITYWIDE Solicitors can advise on dealing with creditors and exploring available options, including:

• Companies/Partnerships:
  • Partnership Voluntary Arrangement/IVA
  • Partnership Administration Order
  • Liquidation
• Sole Practitioners/Individuals:
  • Bankruptcy
  • Individual Voluntary Arrangement (IVA)
  • Informal Arrangement

Swift Legal Action

Once a creditor petitions for insolvency proceedings, it is crucial to seek expert legal advice from CITYWIDE Solicitors promptly. Our specialist insolvency solicitors act swiftly to protect clients’ interests, advising on the best course of action to safeguard assets and property. Additionally, we provide guidance on claw-back provisions for LLPs under the Limited Liability Partnerships Regulations 2001.

On average, this type of work requires 10 to 50 hours.

Timescale

Where a matter is resolved without the need for Court proceedings, the process of the matter usually take between 6 and 12 weeks from receipt of instructions from client to receipt of payment from the other party. 

However, where resolution cannot be achieved through pre-action and Court proceedings are necessary and are issued, the timescale could be over nine months, depending on various factors, such as, the Directions of the Court (how many they are and the length of time given to respond to each), whether Case Management Hearing is necessary (and how many in the case), whether an expert evidence/ witness is required in the matter, availabilities/Court’s time, etc. Given these many possible eventualities and probabilities, timescale is in each case depends on the fact and nature of the case and are therefore, this time to matter, dealt with on a case-by-case basis. We will normally advise each client based on their individual circumstances appertaining every stage of their case.

Who Will Carry Out the Work?