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Your Rights Surrounding Insolvency

By: Suzie Harris - Updated: 24 Oct 2012 | comments*Discuss
Insolvency Company Individual Iva Cva

Insolvency means that you don't have enough money to be able to make repayments on your debts.

Company Insolvency

When a company is insolvent, it is because the creditors have petitioned for the liquidation of your company. Your rights at this stage are limited. You will have to comply with the demands of the receiver during the process. You will retain all your personal belongings unless you have used any of them to secure credit, i.e. used them as collateral for loans or mortgages.

You also have the right to buy the assets back at low cost from the receiver, enabling you to trade again once the winding up is complete. You cannot insist that you stay employed by the company during the process as it is likely that unless needed you will be one of the first redundancies from your company.

Avoiding Liquidation

If your company has more assets than debts then you have the right to apply for a CVA (Company Voluntary Agreement) to enable you to avoid going into receivership or liquidation. It is vital that you seek advice from your accountant as soon as you think there is a problem. It may be that a brief spell in administration is all that's needed to get the company's cash flow back on track and trading again.

Individual Insolvency

As an individual who is insolvent you have the right to approach an Insolvency Practitioner for advice. It may be possible that you can enter into an IVA (individual Voluntary Agreement) to satisfy your debts. If this is not possible then you can file for Bankruptcy.

If you have debts that you feel are not as a result of your own doing, or that they are not justified you can apply to have them removed from your files. You will need evidence of the debt, proof of disagreement and a sworn affidavit regarding the debts. You are within your rights to dispute any debt that you feel you do not owe.


Debt companies can buy debts that have been dismissed by large lenders from as far back as the early 90's for low sums and are only now chasing them. If you lost your home in the 90's and there was a shortfall on the mortgage you may find that only now are you being chased by the debt companies. If you get such a demand it is vital that you contact organisations such as the Citizens Advice Bureau, to get advice on how to deal with these demands. You do have consumer rights and they will be able to help you deal with these credit vultures.


If you are facing insolvency, or think you will be shortly, you need to get help now. There are plenty of places that offer Information and Advice to individuals and companies. Use their services, you have rights and you are not alone.

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