Good news for creditors!

Under current legislation, Insolvency Practitioners (“IP”) are required to comply with significant regulatory and reporting requirements that can lead to increased costs and delays in completing an insolvency process. The issue of IP fees has been widely commented on in the press and in Court and has been seen by creditors and other stakeholders as disproportionate to the outcome. Much of the criticism may be valid, however, at White Maund, we are focussed on providing a cost effective solution and consider the fees we charge to be highly competitive.

So what changes are proposed under the new rules?

The new rules include a number of simplifications to IP regulation and insolvency procedures and also revisions to the director disqualification process whereby IP reporting will be via electronic means and it is hoped this will increase the number of disqualifications and better protect the wider business community. Under the new rules IPs will be able to communicate with creditors and other stakeholders electronically rather than the established snail mail. Furthermore the current requirement to obtain Court Orders to commence and extend certain procedures will be abolished.

Other changes include allowing IPs to rely on company records when admitting claims rather than requiring creditors to prove how much they are due, and allowing IPs to retain small payments for the benefit of creditors generally.

The new rules should enable the insolvency process to be more cost-effective and we hope that will enhance prospects for creditors of making a recovery. After all, as IPs that’s our primary objective.