Insolvency

If your debtor cannot repay their debt (i.e. they are insolvent), sometimes the only option is to take swift aggressive action in the form of insolvency proceedings. Insolvency can be a fast method of recovering money – particularly if your debtor wants to continue in business. Insolvency can be instructed at different stages, either after using ‘fast-track collections’ or after judgment in a court action, where no payment has been made following the first stage of enforcement. We offer two types of insolvency services: bankruptcy and liquidation.

 

Bankruptcy

If you are owed at least £3,000, you can apply to make the debtor bankrupt to recover the money owed. This is an option for individuals, sole traders or partnerships. If a debtor is declared bankrupt, his or her full estate will be handed to the trustee (normally the accountant in bankruptcy). The trustee will usually sell the debtor’s assets to pay its creditors and the costs of managing the bankruptcy.

What do we do?

After receiving your instructions, we will prepare a bankruptcy petition and send it to the court to process. Once processed, we then serve the petition on the debtor. This will take place approximately 1-2 weeks after we receive your instructions.

In what circumstances should this be instructed?

After the Sheriff Officers have carried out a Charge, your debtor may have a few assets worth attachment, although still be trading.

Or

Your debtor may have ceased trading altogether, owing you a substantial amount. In these circumstances, we can petition for your debtor's bankruptcy.

If the debtor is serious about continuing in business or does not want to be declared bankrupt for other reasons, it is likely they will contact us with settlement proposals. We will inform you immediately if this happens. If we do not hear from the debtor we will proceed with a bankruptcy order. You will not incur further expense for this action.

 

Liquidation

Unfortunately, there are instances where debt cannot always be repaid. In this circumstance, liquidating a company can be a final option. After liquidation, a company will stop employing people or doing business, and its assets will be used to pay off debts. Liquidation only applies to Limited Companies and the debt has to be over £1,500.

What do we do?

We present a petition for the appointment of a provisional liquidator. This will take 1-2 weeks after we receive your instructions.

The provisional liquidator will attend the debtor’s premises to assess whether the debt can be paid by third-party funds (usually cash injected personally by a company director or shareholder).

If the provisional liquidator is unable to get the debt settled, he or she will assess whether it is worthwhile to take the liquidation further. We will not proceed to the next stage without discussing the options with you.

Our carefully selected team of insolvency practitioners are able to evaluate your debtor’s solvency at an early stage.

What happens once the petition is granted?

  • If the debtor company pays the debt in full with funds from a third party, we will present a note to the court to have the petition dismissed.
  • If the debtor company is unable to pay the debt but there are insufficient assets within the company to settle the liquidator's fees, we will proceed further with the liquidation. You will not be charged for this further procedure.

Contact Our DEBT RECOVERY Lawyers

Call us on 0141 331 2332
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Contact Our DEBT RECOVERY Lawyers

Call us on 0141 331 2332

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