Charles Dickens is a British institution. His serial writings had a significant impact on the social consciences of the day, often highlighting the poverty and other hardships which existed in the early part of the 19th century. This may be hardly surprising as his books often drew from his own personal experiences. Born in 1812, his father, John Dickens, was a clerk in the Royal Navy. Aged only 12, the young Charles was sent out to work at a boot-blacking factory after his father had been imprisoned in Marshalsea debtors’ prison as a result of a £40.00 debt which he had failed to repay. This real life experience was fictionalised in the book, “Little Dorrit”.
According to the latest analysis from KPMG, the number of companies in Scotland declaring insolvency has risen by 46% in six months. Experts at KPMG have attributed the dramatic rise to instability in the current economy, particularly pointing to Brexit as a leading factor.
Head of restructuring, at KPMG, Blair Nimmo said:
"The ongoing Brexit discussions and change of Prime Minister and Cabinet have undoubtedly created a climate of uncertainty, but there are wider challenges at play, creating a toxic mix of issues for businesses going through a period of distress."
The analysis highlighted that there had been 698 corporate insolvency appointments in the period running from January 2019- June 2019. In the preceding six-month period, there were 479 corporate insolvency appointments.
Many business owners are unaware of the different limitation periods for reclaiming debts in Scotland and England. Failure to observe these strict time limits could make all the difference to the success of your business or have severe repercussions for cash flow and even solvency. Many business owners believe that the limitation periods for debt is the same in the two jurisdictions, but in Scotland, the limitation is five years, whereas in England it is six years. Business owners and teams managing the debts and cash flow of the business need to be aware of these time limits and the laws which govern their contracts with clients.
Financial help website, Scottishtrustdeed.co.uk recently created a report on the state of insolvency in Scotland, based on figures from 2018. In this post, we look at some of the key findings from the report, which may help you to identify liabilities in your business and in your personal circumstances.
The latest report from the Accountant in Bankruptcy (AiB) outlines that 4,664 people were declared bankrupt in 2017/2018, representing a 1.8% increase year on year. In addition, 73% of bankruptcy applications were made by individuals as opposed to creditors. Glasgow and Edinburgh had the highest numbers of bankruptcies, but this is to be expected given their higher populations, and doesn't give an accurate reflection of where the highest risk for bankruptcies lie. It is, in fact, more rural or 'fringe' areas such as Dundee where the biggest risk is concentrated.
You couldn’t successfully argue that Nicholas Wilson wasn’t persistent. That’s because he spent 16 years on a crusade to establish that HFC Bank and John Lewis Financial Services had overcharged thousands of people on debt payments. Both lenders are now part of HSBC.
English local authorities have been criticised for their overzealous debt recovery practices. In an article in July’s edition of “Local Gov”, the extent of the problem was highlighted, with council tax arrears accounting for no less than a third of debt issues which Citizens Advice deals with. This is a staggering figure, particularly when one considers that it exceeds credit card debt problems by 8%.
“No Mean City” is a 1935 novel. Describing life in Glasgow’s Gorbal’s district and the razor gangs, it painted a grim picture of violence and deprivation. It took generations for the city to lose this image, and today the Gorbals is now quite a trendy area with upmarket flats, restaurants and a theatre area.
But does Glasgow still deserve the “no mean city” epithet? Thousands of women employed by the city council will say that it does. And why should this be so?
The National Trust for Scotland (NTS) has experienced significant difficulty in their finance teams, with many of their suppliers waiting on payments for months.
One such supplier has now engaged the services of a debt collection agency to recover payment, saying that he is owed thousands by the charity and has waited many months for payment.
Official figures have shown that many more Scots have been declared insolvent this year compared to last year. Personal insolvencies have risen over the previous four years, with a total of 12,788 people facing bankruptcy or protected trust deeds (PTD) in 2018/2019. This was up by thousands compared to 10,602 people going bankrupt in the previous year.
There has been an 18.6 per cent rise in PTDs, which are formal, voluntary arrangements to transfer a person’s estate to creditors. However, traditional bankruptcies have actually fallen by 5.1 per cent.
“Vulnerable Debtor” is a phrase with which many in consumer debt recovery are familiar. Basically, it is a phrase which should alert a creditor to be cautious when attempting collection from a debtor who is “vulnerable”. Debtor vulnerability can take many forms and can display itself as a physical illness or where the debtor has psychological problems - often stress-related.
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