Corporate insolvencies in Scotland are up 4.5% in comparison to the same period last year and, therefore, agreeing to the best debt recovery plan for your business is crucial. The Accountant in Bankruptcy (AiB) for Scotland announced figures for Q1 in the 2018-19 tax year, offering a mixed view on the debt recovery options taken by businesses and their creditors.

Local Authority Debt recovery subject to change

Following the proposal of the Barclay Review (Recommendation 18) Local Authority debt recovery is under review. Recommendation 18 supports the view of aligning recovery timescales for non-domestic rates with Council Tax, effectively taking enforcement action earlier in the tax year. In the Partial Business and Regulatory Impact Assessment (Section 13), proposals are weighed up for replacing the existing criminal penalty for non-provision of information with a new civil penalty. The consultation closes on 17 September.

Assessing your business for debt recovery

Companies struggling may wish to apply for a scheme to support their trading through a cashflow difficulty, seeking informal agreements with their creditors or opt to go into administration, winding down their business or declaring bankruptcy. Each option offers different benefits to the creditor and debtor in terms of ongoing business and trade and the level of realisable assets:

  • CVAs – Creditor Voluntary Arrangement
  • DMP – Debt Management Plan
  • DPP – Debt Payment Plan; details published under the Debt Arrangement Scheme (DAS)
  • IVAs – Individual Voluntary Arrangement
  • Compulsory or Voluntary Liquidation
  • Voluntary or Protected Trust Deeds
  • Bankruptcy

Contact Us

If you need advice on debt recovery options for your business, speak to one of our legal experts today.