Following the enactment of the Insolvency Act, 2015 (No. 18 of 2015); by way of Legal Notice No.1 of 2016, the following provisions of the Act came into operation as of 18th January 2016:
- Parts II, VI, VII, VIII, IX, X, XI, XII
- The Third Schedule
- The Fourth Schedule
Parts I, III and V, the First Schedule and the Second Schedule were brought into operation as of 30th November 2015 through Legal Notice No. 224 of 2015. In essence, the only provisions of the Act that remain to be operationalised are Part IV, Part XIII and the Fifth Schedule.
The Act has been hailed for its remarkable attempt to overhaul insolvency provisions under the Bankruptcy Act (Cap 53), Companies Act (Cap 489) and Section 89 of the Law of Succession Act (Cap 160). Some of the notable changes include the legal-rescue of insolvent businesses rather than winding them up by providing several alternatives such as rescheduling of debt to lengthen the repayment period instead of commencing bankruptcy proceedings in court. Subsequent to the Insolvency Act, natural insolvent persons could remain “bankrupt” forever. Now as a matter of law, a debtor will automatically be discharged from their debt after three years.
In conclusion, as it had been previously stated, the Insolvency Act consolidates the laws with respect to insolvency. This is in a bid to not only provide for and regulation of the bankruptcy or liquidation of natural persons, incorporated and unincorporated bodies but, also to enable their affairs to be managed for the benefit of their creditors. The latter is done by providing alternatives to bankruptcy and liquidation.