Bankruptcy

As we finally emerge from the pandemic, there is good news and bad in the Coronavirus (Recovery and Reform) (Scotland) Bill for creditors seeking to recover debts rightfully due to them.

The Bankruptcy (Scotland) Act 2016 sees amendment being made in respect of the amount a debtor needs to owe before a petition can be brought for their sequestration (bankruptcy).

The ‘pandemic’ limit of £10,000, which intended to give individuals some measure of protection during the darker days of 2020/21, is to be repealed and replaced with a new limit of £5,000. This represents an increase on the pre-pandemic limit of 66% but is far more palatable, especially to SMEs struggling with cash flow following the pandemic, and who have been unable to pursue legitimately owed debts in the last two years.

If you would like to discuss the recovery of debts due to your business and/or the new sequestration limits, please do not hesitate to contact David Alexander or David Gray. Please contact by email dalexander@gilsongray.co.uk/ dgray@gilsongray.co.uk or by telephone 0131 516 5354.