The insolvency procedures in Scotland presently allow creditors to recover debts by petitioning the court for the appointment of a provisional liquidator at a much cheaper cost than in England.

Proceeding this way allows the clients a fast and effective way of recovering their debts as an alternative to the usual court method. The debt has to be due and in the case of limited companies, petitions can be presented once demands have been served or judgment has been obtained and a charge served.

Thereafter, the court must be satisfied the debtor company is unable to pay its debts as they fall due and will grant the First Deliverance. They have the discretion to appoint a provisional liquidator and if they do so, he then immediately makes contact with the debtor company and takes control of it, for the benefit of creditors. He freezes the bank account immediately.

Similar procedures apply for the personal insolvencies which are sequestrations and apply for debts of over £1500. Interim Trustees’ appointments may also be sought at first instance and a court date is appointed, approximately 4 weeks hence, which is the date the debtor must pay the debt by with expenses or be sequestrated. For more information on insolvency remedies, click here.