The Insolvency Act 1986 sets out a number of transactions that can be legally challenged and made invalid by a Court.

This is used to recover assets an individual may have tried to put beyond the reach of his/her creditors should they become Bankrupt.

This could include selling assets for less than their true value, or even giving away assets. Known as Transactions at an Undervalue.

If someone choses to pay part, or even all, of one debt whislt not paying another this can constitute a Preference. The question is asked why have you chosen to pay one debt and not the other ? Often trade suppliers are paid and the Inland Revenue are not, this would be a preference.

Similarly Extortionate Credit Transactions where an agreement is entered into where the terms are clearly unraesonable can be challenged.

All three of these actions can only be challenged in a bankruptcy and not in an Individual Voluntary Arrangement. However if an action is considered to be a Transaction Defrauding Creditors, this can be challenged under Bankruptcy and IVA.