Personal insolvency

General

There are two main types of insolvency procedure applicable to individuals:

1. •

   individual voluntary arrangements, and

2. •

   bankruptcy

Individual insolvency is:

1. •

   governed by the Insolvency Act 1986 (IA 1986) and the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, and

2. •

   subject to the supervision of the High Court (Chancery Division) or designated county courts

Individual voluntary arrangements (IVAs)

An IVA under the IA 1986, Pt VIII allows an insolvent debtor to compromise their debts and repay creditors in a structured way. The debtor proposes either a composition in satisfaction of their debts or a scheme of arrangement of their affairs (s 253(1)), assisted by a nominee who must be a qualified insolvency practitioner or authorised to act as nominee. Approval requires three-quarters or more in value of creditors responding to a qualifying decision procedure (Insolvency (England and Wales) Rules 2016, SI 2016/1024, r 15.34(6)), and binds everyone entitled to vote or who would have been entitled had they had notice (s 260(2)(b)). The nominee then becomes supervisor.

An IVA cannot affect a secured creditor's right to enforce...