The Insolvency Act of 1986

The Insolvency Act of 1986 is a constitutional legislation providing a legal platform for all matters related to both corporate and personal insolvency in the United Kingdom. The Enterprise Act of 2002 updated some elements of the act; the Enterprise Act was enforced starting on the first of April, 2004.

Generally, the Insolvency Act of 1986 oversee any and all issues related to personal bankruptcy, Individual Voluntary Agreements or IVAs, as well as all administrative contracts relating to corporate or company insolvency.

This act introduces the Individual Voluntary Arrangement or IVA as an option for debt management instead of directly declaring bankruptcy. An IVA essentially allows the debtor to reach a settlement with his creditors through a formal proposal which, if approved, becomes a legally binding contract that exists between the debtor and his creditors. A standard IVA will allow debtors to pay a fixed amount every month based on what he can afford. These monthly payments usually last about five years; once all payments have been made, the debt is cleared.

The Insolvency Act of 1986 has the following sections:

THE FIRST GROUP OF PARTS
COMPANY INSOLVENCY - COMPANIES WINDING UP
Part I - Company Voluntary Arrangements
Part II - Administration Orders
Part III - Receivership
Chapter I - Receivers and Managers (England and Wales)
Chapter II - Receivers (Scotland)
Chapter III - Receivers Powers in Great Britain as a whole

Part IV - Winding Up of Companies Registered Under the Companies Acts
Chapter I - Preliminary
Chapter II - Voluntary Winding Up (Introductory and General)
Chapter III - Members Voluntary Winding Up
Chapter IV - Creditor' Voluntary Winding Up
Chapter V - Provisions Applying to both kinds of Winding up
Chapter VI - Winding Up by the Court
Chapter VII - Liquidators
Chapter VIII - Provisions of general application in winding up
Chapter IX - Dissolution of companies after winding up
Chapter X - Malpractice before and during Liquidation: Penalisation of companies and company officers: Investigations and prosecutions
Part V - Winding Up Unregistered Companies
Part VI - Miscellaneous Provisions applying to Companies which are Insolvent or in Liquidation
Part VII - Interpretation for first group of parts

THE SECOND GROUP OF PARTS
INSOLVENCY OF INDIVIDUALS - BANKRUPTCY
Part VIII - Individual Voluntary Arrangements
Part IX - Bankruptcy
Chapter I - Bankruptcy Petitions - Bankruptcy Orders
Chapter II - Protection of Bankrupt's Estate and Investigation of his Affairs
Chapter III - Trustees in Bankruptcy
Chapter IV - Administration by Trustee
Chapter V - Effect of Bankruptcy on certain rights, transactions etc
Chapter VI - Bankruptcy Offences
Chapter VII - Powers of Court in Bankruptcy
Part X - Individual Insolvency: General Provisions
Part XI - Interpretation for second group of parts

THE THIRD GROUP OF PARTS
MISCELLANEOUS MATTERS BEARING ON BOTH COMPANY AND INDIVIDUAL INSOLVENCY
GENERAL INTERPRETATION
FINAL PROVISIONS
Part XII - Preferential debts in company and individual insolvency
Part XIII - Insolvency Practitioners and their qualifications
Part XIV - Public Administration
Part XV - Subordinate Legislation
Part XVI - Provisions against debt avoidance (England and Wales Only)
Part XVII - Miscellaneous and General
Part XVIII - Interpretation
Part XIX - Final Provisions