The Insolvency Law Reform Act 2016 is due to take effect on 1 March 2017. The focus of the legislation is on those who become insolvent or cause insolvency and those who run the resultant administrations. That’s all well and good but what does this mean for credit providers? The principal practical effects on the credit sector will be:
- A greater effort will need to be made during personal bankruptcies to recover because the minimum bankruptcy period will be markedly reduced.
- Insolvent trading claims against directors will be harder to pursue.
- Supply contracts will not automatically terminate if a corporate customer goes into voluntary administration.