The catastrophic effect the Corornavirus shut down has had on what were previously viable businesses is unprecedented. Even after life returns to some form of normality, the loss of revenue some businesses have suffered will have a detrimental impact on their future ability to trade on. In these challenging times, it is worth remembering that our Business Recovery Team, is here to find a solution that may offer an alternative to ceasing to trade.
For example, Limited Companies can access Company Voluntary Arrangements but solutions are not only tailored to assist large business. Smaller, unincorporated business can also access debt relief through Business Debt Arrangement Schemes.
This can be used by Scottish partnerships, trusts and unincorporated bodies which are in debt.
This programme offers a solution to viable businesses who have experienced a catastrophic event, to help them trade on until they recover.
This is a debt payment programme which allows a business to pay its existing debts over a period of no more than 5 years, whilst stopping all further interest and charges. In addition, this programme protects it from creditors taking debt recovery action. This means the business can deal with its debts whilst continuing to trade thus avoiding unnecessary insolvency procedures. This could protect the business and personal assets as well as potentially saving businesses and jobs.
An Insolvency Practitioner must provide debt management advice to the business and if it can be established that the business is viable and has a genuine chance of successfully completing the process, the business entity can apply for a debt payment programme. It is a requirement of DAS that ongoing liabilities are met in addition to making the agreed payments towards the existing debt, which can be paid weekly or monthly. If the programme is not maintained, or if current creditors are not paid then the Debt Payment Programme may be revoked and all interest and other charges can be applied retrospectively by the creditors.
Get in touch
If you would like further information or to discuss any of these matters, please contact a member of our Business Recovery and Insolvency team.