There are Four Types of Insovency: Voluntary Arrangements, Bankruptcy , Administration and Winding-up

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This essay aims to describe whether the law provides protection for the creditors who are not secured where the buyer becomes insolvent, and if the secured creditors can benefit from the retention of title clause or floating charge. Insolvency is the legal term that describes the situation where a debtor, which is usually a business or a person, is not able to pay his debts when they are due or in the usual course of business . Insolvency occurs from cash flow and recession. There are four main types of insolvency, voluntary arrangements, bankruptcy , administration and winding-up . Creditors are crucial beneficiaries at the process of insolvency and the law should provide them with the necessary tools to let them keep playing an active role in this process.

When a company goes under, it drifts with many of its creditors. The term ‘credit’ is used to describe someone’s financial standing, or to describe some form of financial accommodation. In this assignment we are concerned with credit in the sense of financial accommodation, which is fixed and floating charges. A creditor is someone who borrows money and repays this at a later date with interest and charges. Moreover, the Consumer Credit Act 1974 was created to regulate credit agreements. Later, the 2006 Act, aimed to create an ombudsman scheme, which would permit borrowers to challenge their case in court, enchase the powers of the Office of Fair Trading and allow debtors to confront unfair relationship with

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