Insolvency Solicitors Glasgow, Edinburgh, Inverness & Aberdeen, Scotland
Insolvency arises when an individual or a business has insufficient assets to cover their liabilities or are unable to pay their debts when they are due. Whether as an individual, or in running a business, you face such a situation, at Complete Clarity Solicitors we understand how stressful this can be and will assist you in achieving the best possible outcome for you or your business. We have experience of dealing with all forms of insolvency appointments and work to explore all other options available as an alternative to formal insolvency.
Bankruptcy, or sequestration, is the formal insolvency procedure for individuals.
Sequestration involves handing over assets to a Trustee who is responsible for selling assets to pay the creditors as much as possible. You may keep some things essential for day-to-day living but may also be required to make some payments from income.
The advantage of sequestration is that you pay only what you can afford of the debts and it protects from further enforcement action by creditors, though it will affect your credit rating.
Other personal insolvency options include:
- Under the less formal Trust Deed process any payments you have been making to creditors cease. Any surplus income you have is paid to a Trustee over a fixed term. The Trustee deals with creditors on your behalf.
- An Individual Voluntary Arrangement (IVA) is an agreement between debtors and creditors allowing debtors to reorganise their financial affairs.
- The Debt Arrangement Scheme is available to Scottish residents which can help by giving time to pay by preventing creditors taking enforcement action. However, it is not available if, for example, no income remains after paying living expenses.
It is the directors’ responsibility to know whether a company is trading while insolvent and they can be held legally responsible for “wrongful trading”. There are a number of procedures open to an insolvent company including:
- Company Voluntary Arrangement
- Administrative Receivership
- Compulsory Liquidation
- Creditors’ Voluntary Liquidation
The first three provide for the rescue of the business. For example, Administration provides a legal suspension of creditor action which can help a struggling but potentially viable company.
Under a Company Voluntary Arrangement (CVA), creditors are legally bound to accept terms of an arrangement which may typically involve monthly payments. This arrangement can be suitable for directors wishing to retain control of a company and trade out of its difficulties.
If you were a director of an insolvent business and are being pursued by its creditors, or are dealing with being disqualified as a company director, we can advise and assist you.
Contact our Insolvency Expert Lawyers in Glasgow, Edinburgh, Inverness & Aberdeen, Scotland
Based in Glasgow, Shawlands and East Kilbride, we provide clear and practical legal services to people and businesses across Scotland. To find out how our insolvency lawyers can help you, or to arrange an initial consultation with one of our insolvency solicitors, call us today on 0808 273 6766 or complete our online form.