ABSTRACT
This chapter looks at methods, other than those contained in the Insolvency Acts, of avoiding liquidation or bankruptcy. It starts by considering the processes which may lead to an informal resolution of debt problems. Whether the debtor is a low-income individual in debt to his landlord and electricity supplier or a multi-national enterprise owing millions of pounds to dozens of banks, the basic need is the identical one of agreeing a rescheduling of obligations in order to remove the threats posed by indebtedness. Any agreement to reschedule debts arrived at by the parties will only be binding on them if the principles of contract law so provide so this chapter considers some of the relevant points of contract law. The final two sections of the chapter explain two formal processes whose history pre-dates the Insolvency Act 1986; these are the county court administration order for individuals and the scheme of arrangement under s 425 of the Companies Act 1985.
