What is the Insolvency Register?

If you are struggling to pay debts you owe, you may come across something called the Insolvency Register. But what is the Insolvency Register, and how can it affect your ability to borrow money, run businesses and apply for additional credit?

There are many different ways for you to seek support with outstanding debt.  In many cases, a debt advisor will be able to tailor you a plan of action which means you can relieve yourself of money owed both quickly and conveniently.

However, as with all forms of debt and relief orders which can follow them, you may find that there can be a knock-on effect of owing money beyond the demanded timescales. The number of insolvencies is actually rising in the UK for both individuals and companies.

Individual Insolvency Register UK

Worried about the individual Insolvency Register UK debtors can be affected by?  Don’t be – this guide is here to help break things down for you.

The Insolvency Register comes into play when you have asked for support with your debt in the form of an insolvency solution.  These options can help to freeze interest activity, or even the pursuit of legal action.  In any case, you may find that you are listed on the Insolvency Register as a result of such activity.

This Register is important to lenders and companies as it advises them as to who has applied for financial support before – and it can help them to ascertain whether or not to lend money or give credit to certain people.

Therefore, before taking out a debt relief order or other type of relief solution, it is always important to remember that there may be short to long term effects of you being unable to pay off your debts.  Don’t worry – as an impartial debt advisor will always be able to help you look at the best solutions available.

When Would You Register for Insolvency?

You would register for insolvency, ultimately, when you find yourself in a position where you are unable to pay the debts demanded of you.  This process can generally occur if you opt for any of the following relief options:

  • Debt Relief Orders – where you pay a small fee to arrange for your debt to be frozen for up to twelve months, and then written off if you are still unable to pay
  • Individual Voluntary Arrangements – where you and an appointed Insolvency Practitioner (IP) work together to devise a proposal for your creditors – where activity can be frozen until you clear off debts through your IP. Learn more about IVAs here.
  • Bankruptcy – where you publicly declare that you can no longer afford to pay your debts, or run your business

It is worth noting that the above options may not apply in Scotland, and should be observed for England, Wales and Northern Ireland alone.  In Scotland, for example, you would apply for sequestration as opposed to bankruptcy.

In any case, all of the above assistance can involve the national Insolvency Service.  For example, a bankruptcy request will mean writing to the Service directly to advise them of your situation.  You’d let them know your income, your savings and assets, and your outstanding debts. 

The Service would then address your application and, if you are successful, they would request that all pursuing creditors freeze unsecured debt action against you.  This would, however, also mean that any assets you have are immediately sold off to pay for debts.

Any insolvency action or debt relief requests will have a knock-on effect for your credit rating and for your appearance on the public Insolvency Register.  This means that your status and history can be found easily should anyone be considering lending you money. 

How Do You Become Insolvent?

You can become insolvent as a result of falling into debt without the means to pay it back.  You will be registered as insolvent if, as detailed above, you register for help to clear certain debts.  Details recorded on the Register when you become insolvent may include:

  • Your full name
  • Your address
  • Your date of birth
  • Your gender
  • Any Insolvency Practitioners involved
  • Any agreements currently underway

Your details can remain on the Register for up to three months after you are ‘discharged’ from bankruptcy – and the same will apply for both DROs and IVAs once they have been satisfied and/or completed. 

In any case, being registered as insolvent can have a large effect upon whether or not you can borrow money or apply for credit in future.  Most support routes can result in a mark being left on file for up to six to seven years, meaning that it is always worth discussing options with a debt advisor before you leap into any relief options feet first.

However, becoming insolvent isn’t always a bad thing.  In many cases, for many people who simply cannot pay their bills, it may be the only option available to take.  Those people willing to pay their debt but are otherwise unable to will apply for insolvency when it becomes clear that they can no longer feasibly afford to keep payments up. 

In many cases, people who avoid paying creditors can find themselves with bankruptcy thrust upon them at the request of an owed party or even the relevant court.

Insolvency Support Services

It’s always a good idea to consult local insolvency support services if you do feel that you will have difficulty paying any debts you currently owe.  These options can have a long-term effect upon your ability to seek financial support in future – which means you should always make such decisions with a clear head and with the support and guidance of a relevant expert by your side. 

The Insolvency Register may be a short-term hassle – but in many cases, becoming insolvent is simply the best course of action to be taking.

If you are worried about debts and would like advice on what to do with regard to any current debt you may be accruing, contact our team today by calling or sending us an email.  Insolvency isn’t ever the end of the world!

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