A headline today caught our attention, it was about an injunction to have an insolvency solution honoured.
Personal insolvency is a legislation backed process (unlike informal debt deals) and for this reason you can’t unilaterally decide, as a creditor, to opt out of one that is already in existence.
What is interesting at this point in time is that many of the applications we track in the courts when gathering possession statistics are about applications for change of name of the plaintiff. This occurs when loan books are being sold and the proceedings are being altered to reflect the new owner.
There is considerable confusion even within the courts because of this and it may be a case that a person could use this as an opportunity to seek personal insolvency because in the midst of this there is a lower level of likelihood that loan buyers will engage in the process.
Failing to do this means they lose their voting rights and deals can be struck, that isn’t to say a deal can’t be struck anyway, but certainly, if a loan buyer (often called a ‘vulture’) had other plans, their own lack of operational capacity might work against them.
It’s one of the positives of the insolvency regime that this case arose, it proves that the power of formal arrangements can’t be undone, this has always been our gripe with informal bank-lead solutions.