Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Insolvency definition

What does Insolvency mean? In practice, insolvency describes a financial state where a debtor cannot meet liabilities when due, triggering remedies such as administration, liquidation or bankruptcy and informing directors’ duties and avoidance claims. For companies in England & Wales, Scotland and Northern Ireland, the Insolvency Act 1986, s 123 sets two alternative tests: - Cash‑flow insolvency: an inability to pay debts as they fall due. The inquiry is practical and forward‑looking, not confined to today’s bills (Re Patrick & Lyon Ltd [1933] Ch 786; BNY Corporate Trustee Services Ltd v Eurosail [2013] UKSC 28). - Balance‑sheet insolvency: liabilities (including contingent and prospective liabilities) exceed assets on...

England and Wales: Temporary Insolvency Practice Direction (Apr–Oct 2020)—CE‑filing administration appointments, adjournments, remote hearings, video statutory declarations, and CIGA 2020 practice changes [Archived]

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

Background

In the wake of the coronavirus (COVID-19) outbreak, governments around the world imposed extraordinary social distancing rules and lockdowns. Within the UK, these steps severely affected how the courts—and those using them—could perform their routine functions. In response, the courts are operating under revised protocols and procedures—see Practice Note: Coronavirus (COVID-19)—Changes to the court process in insolvency proceedings [Archived]. To build on those adjustments, and to tackle issues unique to insolvency cases, a new Temporary Insolvency Practice Direction (TIPD) took effect on 6 April 2020—see: Issue 96 of Insolvency Service’s Dear IP published, LNB News 06/04/2020 90. The TIPD lapsed on 1 October 2020 and was succeeded by the Temporary Insolvency Practice Direction Supporting the Insolvency Practice Direction (effective from 1 October 2020 to 31 March 2021). That instrument has itself been followed by additional temporary practice directions, the latest of which is due to expire on 30 September 2021—see Practice Note: The Temporary Insolvency Practice Direction Supporting the Insolvency Practice Direction (June 2021) [Archived]. The purpose of the TIPD was to support court users during the coronavirus emergency by removing the requirement for parties to attend court...

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Web page updated on 21/05/2026

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