New proposals will leave creditors to fend for themselves
7/26/2010Creditor bodies are more vulnerable than ever to companies and directors that cannot pay their debts according to leading law firm, DWF.
This warning comes after the Insolvency Service's announcement that it is proposing to cut its running costs by 11 per cent.
The Insolvency Service is an executive agency of the UK's Department for Business, Innovation and Skills (BIS) which administers and investigates the affairs of people of companies that become bankrupt, and establishes why they became insolvent.
Paul Marsh, head of personal insolvency at DWF said: "The Insolvency Service's primary function is to investigate the conduct of insolvent companies and individuals. If there is a reduction of resource at a time when we are seeing record numbers of insolvencies, the ability to perform this role will be compromised.
"Furthermore, the Insolvency Service has recently placed more resources into asset realisation, which is not the agency's primary role. This change of emphasis at a time when available resources are being reduced will only result in less resource being made available for investigation into the conduct of insolvent individuals and companies.
"Surely the most simple solution is to allow insolvency practitioners to concentrate on asset realisation, which is what they are good at, and the Insolvency Service to concentrate on its primary function of investigation and protecting the public interest.
"Although this decision will ultimately make a cost saving for the Government, it will come at a high price for creditor bodies who will be more susceptible than even to unscrupulous individuals and companies unable to settle their debts."
DWF's personal insolvency team is the largest in the UK. For more information about the team contact Paul Marsh on 0151 907 3299.
ENDS
Notes to editors
DWF LLP is one of the fastest growing law firms in the UK. With over 1,100 people based in Leeds, Liverpool, London, Manchester and Preston, DWF provides a range of services grouped in the following sectors:
Corporate
Finance & Restructuring
Litigation
Real Estate
People
Insurance
Private Client
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