ABSTRACT
However, the threat of bankruptcy or liquidation may well produce payment in full and a solicitor should always consider this particular remedy with his client.
There are also other advantages to be considered, namely:
• the appointment of a liquidator or a trustee in bankruptcy could enable other routes to be explored for the benefit of creditors. For example, the activities of the directors in a company can be investigated, possibly to the financial advantage of the creditors (see 13.5);
• previously, the automatic availability of VAT bad debt relief in an insolvency situation as opposed to other debt recovery situations was considered to be an advantage. This has been eroded somewhat over the years by changes in the VAT bad debt relief scheme which is now much more widely available on bad debts generally than before. For details of the scope of the current scheme, reference should be made to any local office of HM Customs & Excise.
