Insolvency Act
The Insolvency Act 1986 is a key piece of UK legislation that governs what happens when individuals or companies can’t pay their debts. It sets out the legal processes for declaring insolvency, including bankruptcy for individuals and various company procedures like administration and liquidation. The Act aims to protect creditors, ensure fair treatment of debtors, and facilitate the restructuring or winding up of businesses. It also establishes how assets are distributed and outlines the roles of insolvency practitioners who help manage these processes. Ultimately, it seeks to provide a legal framework for dealing with financial failure.
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The Insolvency Act is a legal framework that governs how individuals and businesses handle financial distress when they cannot pay their debts. It outlines the processes for declaring insolvency, allowing for the fair distribution of assets to creditors. The Act also provides options like bankruptcy and voluntary arrangements to manage debts, protecting both debtors and creditors. Its main goal is to enable a fresh start for those in financial difficulty while ensuring that lenders receive a fair recovery. Overall, it balances the interests of consumers and businesses facing insolvency.