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Key changes to insolvency rules in April 2017


The most significant changes to insolvency legislation (in England & Wales) in the last three decades will be introduced on the 6th April 2017, aimed at modernising and updating present procedures. The Insolvency Act was introduced in 1986 and any existing rules and amendments will be consolidated into a single piece of legislation, which should streamline systems and communication.

Insolvency solutions will fundamentally remain the same, but the aim is to improve the overall insolvency system, allowing for procedures to be more efficient, increase creditor engagement and reduce costs for all parties involved.

Here we have a look at the key changes to Insolvency legislation;

Remove requirement to hold physical creditor meetings (S.98 Meetings)

Currently a physical meeting is held to appoint the Liquidator and understand the financial position of the insolvent company. The majority of meetings take place with only the Insolvency Practitioner and Director/s, with no creditors attending. This can add cost to the insolvent estate and arguably be a waste of valuable time.

Physical meetings will now be abolished; instead creditors will be asked to make decisions by electronic voting or virtual meetings. Physical meetings can still take place at the request of creditors.

Enable electronic communications with creditors

The way we communicate has transformed significantly in the last three decades, so the modernised Insolvency legislation is geared towards the take up of electronic communication and reduction in traditional post between Insolvency Practitioners and creditors.

There will be more freedom to use emails by lifting certain restrictions and limitations. Creditors will also be able to log into the Insolvency Practitioners website to access reports and decisions without the need for written communication or phone calls. This will allow communication to be significantly faster and more cost effective.

Opt out

Creditors, who see no benefit of being actively involved in the insolvency process, will be able to opt out of receiving correspondence from insolvency practitioners, but will still be entitled to dividends if they become available.

Small dividends

Creditors with claims for less than £1,000 will no longer need to submit proof to the Insolvency Practitioner. Instead, accounts and financial records will be checked to automatically include them on the list of creditors.

Final meetings abolished

To help speed up the process further, no final meetings will be called to conclude insolvency proceedings and formally release the Insolvency Practitioner from their duties. This process will now be dealt with by email with creditors.

Deemed consent

In most decisions, Insolvency Practitioners will work on the basis of deemed consent, unless objected by at least 10% of creditors (in value or number). If an objection is received, then a creditor can request they revert back to a physical meeting or make a decision via electronic voting or a virtual meeting.


While there are other amendments, we’ve discussed the key changes to the insolvency rules above. An overhaul of the existing legislation has been under consideration for a number of years and the new changes will help modernise working practices. The language used in the new rules will also be modernised to make it more user friendly and avoid misinterpretation.

The most positive changes will be how Insolvency Practitioners communicate with creditors. The use of digital communication should lead to more creditor engagement and speed up decision making.

There may be some issues implementing the new decision making procedures, but the insolvency industry and creditors will need to be prepared to ensure a smooth transition from old to new.

We hope this overview has been helpful.  If you would like more information, or have a client who may need our services, please don’t hesitate to contact me on 0115 871 2921 or by email

Bridgewood is one of the leading debt solutions firms in the Midlands, delivering value for money solutions with a compassionate and supportive approach.

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