Creditors Portal & Information | Harveys Insolvency & Turnaround

Creditors Portal & Information

Information For Creditors

If your customer has entered into insolvency proceedings, at the very least, your cash flow will have been dented & you are probably facing a bad debt. Larger bad debts can impact your profitability & can take many weeks &/or months to return to normal levels. Where we have been appointed to act as insolvency practitioners (IP) to one of your customers, we work hard to minimise your loss & will keep you informed about the case & your prospect of recovering the sums due.


We recommend that you frequently review your customers as a whole & the sums due. If you have suffered a loss recently, we would recommend that you promptly review your customers to identify those whose level & age of debt or financial position concern you so that you can take positive action. Experience tells us that your early action can vastly improve your position.

 

If you would like to know more about how we can help you, please contact us.


The Creditors Portal & Information section of our website provides useful information for creditors & employees, along with access to our reports & documents pertaining to insolvency appointments we are undertaking.


Creditors Reports

Download your creditors reports 
& documents here 
Creditors Reports & Documentation

Reports for our insolvent clients are provided to creditors, directors & shareholders electronically to improve communications & reduce the cost. 


These & other relevant documents are published for creditors & shareholders via our secure portal. We will have provided all known creditors with written notification, a login & password for the insolvent case which provides access to our portal. The 'Creditors Reports & Documentation' button on the left takes you to our portal login area. 


Please contact us should you experience any problems whilst logging in or downloading.

Our Standard Charges & Pricing

We do as much as we can to be open & transparent about our fees & the costs associated with all the work we do. Like most professionals our normal basis of charging is on time costs based on charge out rates which vary depending on the grade & experience of individuals involved. We believe that our charge out rates are very competitive. We provide a more personal, but otherwise similar level of service to the larger national business rescue & insolvency firms, but at less than 50% of the price.


Advisory Work

We don't charge you for the initial advice or will not charge until we agree the terms of an engagement with you. The only exception is non business related cases, such as consumer debt problems, where we will charge a fixed fee for initial meetings.


We always agree a basis for charging before work commences, either as a fixed fee, time spent on your matter or on a percentage of results achieved. If we are charging on a time basis we will give you an estimate of the total fee & agree further fees arising over & above that estimate, if required.


Formal Insolvency Work

In formal insolvency appointments we normally charge for work undertaken on a time incurred basis, subject to the law & guidelines stated by our professional body & legislation. When we apply for fees we furnish creditors, shareholders & directors, as appropriate, with our fee policy & an estimate of the anticipated total fees & a supporting narrative. The  Statement of Insolvency Practice (SIP) 9 can be found at:

https://www.icaew.com/-/media/corporate/files/technical/insolvency/regulations-and-standards/sips/england/sip-9-e-and-w-remuneration-of-insolvency-office-holders-eff-from-6-apr-10.ashx) 


This states the basis on which IPs should charge & report on fees. The following link  provides ‘A creditor’s guide to fees’ for each type of proceedings:


     ✔  Administration 
     ✔  Liquidation 
     ✔  Trustee in Bankruptcy   
     ✔  Voluntary Arrangements


https://www.icaew.com/technical/insolvency/understanding-business-restructuring-and-insolvency/creditors-guides 

Insolvency 
Practitioner Fees

Guide to your rights as an employee 

Harveys' approach to employee rights
 
Be assured that when Harveys are instructed to act for an insolvent employer, we ensure that all employee claims are treated as follows: 

✔    CN Codes are provided as early as is possible to employees.

✔  All known employees with rights are given an opportunity to claim from the RPS.

✔  P45s & all employee tax matters are completed as soon as is possible.

✔    Pension contributions are considered & outstanding monies  recovered from the RPS & paid to the scheme where possible.

✔  Where pension schemes require the appointment of an independent trustee, they are addressed quickly. 

✔  When documents are prepared at the outset of a case, where information is provided by the employer we will calculate the employees' contractual or ERA anticipated claim for us to estimate what the employees’ positions are likely to be. 

✔  In the course of preparing for a preferential or unsecured  distribution to creditors, we will review the known employees'  position, reconcile our calculation with the RPS & ensure the  employees' full rights are carefully considered and addressed.


RPS Guide       
https://www.gov.uk/your-rights-if-your-employer-is-insolvent

RPS Forms  
https://www.gov.uk/claim-redundancy

RPS Contact
Tel: 0300 123 1100 


Please refer to the guide on the right to your statutory & contractual rights & their treatment in insolvency. 

Basis Of Calculation

Employees of an Insolvent Company or Trader?

 If your employer has become or is insolvent & you are owed money by them, it is more than likely you will be entitled to make a claim to the Redundancy Payments Service  (RPS)  for some or all of the money you are due.  Employees' claims initially fall into two categories: 

  1. The amount you can claim from the RPS.
  2. What is payment under your contract of employment & in the absence of a contract what your entitlement is under the Employment Rights Act 1996  (ERA) .

1. Redundancy Payments Service Payments

Employees can only submit a claim to the RPS once they have been provided with a  CN code.  This will be provided by the  IP  engaged by your employer after their appointment.


The RPS guide on your rights if your employer is insolvent can be found here: 

https://www.gov.uk/your-rights-if-your-employer-is-insolvent


If you have a CN code for your employer, you will find the application & the guidance here: 

https://www.gov.uk/claim-redundancy


The scheme operated by the RPS will pay sums due to a maximum statutory rate of £700 per week (2023/4 rate, increases annually on 6 April) for the following: - 


 

✔    Arrears of wages due to a maximum of eight weeks. 

   

✔    Accrued holiday paid to a maximum of six weeks.

   

✔    Pay in Lieu of Notice  (PILON) , where an employee meets minimum service requirements & this is  calculated based on your notice rights under the ERA. One week for each complete year  served, to a maximum of 12 weeks.

   

✔    Redundancy pay at statutory scale as defined by the ERA. 

 

In return for paying employees, the RPS will, for the greater part, take your place as a creditor in the proceedings. 


The RPS & IP should make sure you receive your entitlements as quickly as possible. However, no claims can be processed until after the actual commencement of the insolvency proceedings when the IP is entitled to submit information on behalf of the employer. 


These payments do not consider the contractual claim of the employee or any shortfall if your wages are above the maximum statutory sum; if you have no contract or your contract is silent on a particular right, employees are protected by rights stated under the ERA. 


2. Employment Contracts & Shortfalls

We understand that employee claims can be complex & it is not easy for all employees to interpret & or navigate a contract of employment or the ERA. Because of this, Harveys calculate all employee claims throughout the proceedings & where we need employees' comments, we contact you again at the appropriate juncture. 


Employees have two creditor statuses, which are defined by the provisions of the Insolvency Act 1986: 


 

✔   Preferential Creditor for: Arrears of wages up to a total of £800; &  All accrued holiday pay. 

   

✔   Unsecured Creditor for: Arrears of wages above £800.  Notice pay. Redundancy Pay.  Expenses.

 

 If you have a contract of employment, your claim in the proceedings will be calculated based upon your contract. If no contract exists or your contract is silent in specific areas, the ERA or case law prevails.  By applying for & receiving payments from the RPS, referred to earlier, you agree that they have subrogated rights to your preferential or unsecured claim against your employer. 


A subrogated right means you have given them priority to be paid first, in full or part, before you receive any payments directly from the employer. The subrogated sum is still broken down into the preferential & unsecured categories & then wages, holiday pay etc.  The RPS use a statutory calculation to arrive at a legal sum they are entitled to recover under subrogated rights, which is generally >97% of what they paid you. Any sum due to you which the RPS has not paid is considered separately by the IP. Below we have set out an example of a claim demonstrating the apportionment of:


 

 ✔   Actual Claim due 

 

 ✔   Preferential or unsecured status

 

 ✔   Subrogated or balance to employee 

 

Basis of calculation

Glossary of Terms 


Insolvency jargon translated

  • Adjudicator

    The adjudicator isn't a judge. They are a government official who works for the Insolvency Service & their role is to review & make decisions about an individual's petition to become bankrupt. 

  • Administration

    A type of insolvency procedure which puts a company under the control of a licensed Insolvency Practitioner. See here for further information

  • Administration Order

    A court order on the petition of a company, its director, liquidator or a creditor, placing a company that is, or is likely to become, insolvent under the control of an administrator in order to achieve the purpose of administration.

  • Administrative Receiver

    A licensed insolvency practitioner appointed by the holder of a floating charge. An administrative receiver's powers include the ability to carry on or sell the business & assets of the company comprised in the security to repay the secured & the preferential creditors. See here for further information. 

  • Administrator

    A licensed insolvency practitioner appointed in relation to a company to manage its affairs & to achieve the purpose of administration.

  • Annual Report or Progress Report or Account

    A report produced by the appointee in insolvency proceedings which accounts the progress of the proceedings, assets realised, the creditors' position, the costs & anticipated outcome. The information provided & the timing of the report are as stated by statue.

  • Assets

    Property of value owned by the insolvent entity which will be sold by the appointee (liquidator or administrator).

  • Association of Business Recovery Professionals or R3

    The trade association for the UK's insolvency & restructuring professionals. Does not equate to a professional qualification but carries the right for a member to state MABRP or FABRP.

  • Bailiffs or Enforcement Agents

    Bailiffs are now known as Enforcement Agents (EA). They are authorised by the Courts & granted powers to visit your business premises or homes to recover unpaid debts by way of payment or seizure of assets. They are required to have a current Enforcement Agents Certificate issued by the County Court which you can check on the Ministry of Justice EA register. 


    They act on behalf of creditors with CCJs or High Court Writs or under a right to enforce a debt, such as a landlord's rights. The debtor pays the EA fees on top of the debt. The fees are set out in regulations & are fixed. Also see Enforcement Notice for useful information. 


  • Bankrupt

    An individual person against whom a bankruptcy order has been made by a Court.

  • Bankruptcy

    The process of dealing with the assets, liabilities & a bankrupt (an individual).

  • Bankruptcy Order

    An order made by a Court against an individual at a point where they are unable to pay their debts when they are due.

  • Bankruptcy Petition

    An application to the Court, made by a creditor or debtor, for a bankruptcy order to be made in relation to debt owed & unpaid by an individual. In the case of a creditor, it is a condition that the debt owed exceeds £750.

  • Commercial Rent Arrears Recovery (CRAR)

    Enforcement action taken under the Taking Control of Goods Act (1988), in which a Landlord directly instructs an Enforcement Agent to recover rent owed for more than 7 days. The recovery action is limited to rent only & cannot include service charges or insurance. 


    Also see Forfeiture, Bailiffs/Enforcement Agents /Enforcement Notices for related information  


  • Charge

    A charge is a legal right registered against a company giving a creditor first rights to designated assets of the borrower. This is registered at the Registrar of Companies.


    A charge can also be registered against an individual's or business's land or property which is registered at the Land Registry.


  • Companies House

    A government body that stores information on all the limited, plc or foreign registered companies & limited liability partnerships registered in the UK. The legal entity is obliged to file documents such as accounts & information about directors/shareholders. This information is available to the public. 


  • Company Voluntary Arrangement (CVA)

    A legal procedure available to limited companies that gives time for it to repay its debts in part or full. The company can continue to trade during a CVA.  The Insolvency Practitioner acts as a supervisor. Please click here for further info 

  • Composition

    A composition is an agreement between a party who owes money with their creditor(s) who consent to accept a lesser sum in satisfaction of the amount due.

  • Compulsory Liquidation

    The liquidation of a company via the Court, normally arising from a petition being presented to the Court by a creditor. Please click here for further information 

  • County Court Judgement (CCJ)

    A CCJ can be made against you on the application to Court for monies due & unpaid to cause payment. An undefended application is likely to result in an automatic CCJ. An application can be made for disputed debts to cause the matter to be settled.  

      

    The CCJ is the Court ordering you to pay the debt within an allocated time. If you fail to pay the creditor can take action such as instructing Enforcement Officers, issue a statutory demand or petition for your bankruptcy or winding up.


  • Creditor

    A party (corporate or individual) who is owed money.

  • Credit Rating or Credit Score

    A credit score, also known as a credit rating, is a number that reflects the likelihood of you paying credit back. The higher your credit score, the better your chances of being accepted for credit by banks, financial institutions & suppliers. Your score can become poor where you do not pay your debts on time or at all, applying for credit too often in a calendar year or having CCJs.


    A credit score influences your chances of getting credit cards, loans & supplier credit. It applies to companies & individuals.


  • Creditors’ Committee

    A small group of usually 3-5 creditors who are owed sums in an insolvency who volunteer to represent the interests of all creditors. Typically, they act as a sounding board for the insolvency practitioner. They can also be asked to approve resolutions on behalf of the wider creditor group. Creditors’ committees are rarely formed.

  • Creditors’ meetings

    Please see Decision Procedure

  • Creditors’ Voluntary Liquidation (CVL)

    The liquidation of a company incepted by its directors. Please click here for more information.

  • Debenture

    A document that is drawn up in relation to sums advanced by a creditor & secures the creditor's position over (specific) assets which is often referred to as a fixed & floating charge debenture. Also see ‘Charge’, ‘Fixed Charge, ‘Floating Charge’. 

  • Debt Management Plans (DMP)

    A DMP is an informal agreement between an individual & his/her creditors to pay all their debts.


    These are mostly handled by debt management companies or debt charities, not insolvency practitioners or the Official Receiver. Please click here for more information.  



  • Debt

    A sum of money owed to you or  money you owe.



  • Debt Relief Orders (DRO)

    A formal process of dealing with personal debt where you cannot afford to pay your creditors in full. The total debts must be less than £20,000 & assets of less than £1,000. You must be able to afford to pay a fee of £90 & contributions to the debts for a period of no more than 12 months. At the end of the period the individual is debt free. 


    Most student loans, child support payments, fines & debts incurred through fraud are excluded in a DRO & remain payable. 


  • Debtor

    An individual or company who owes money.

  • Decision Procedure

    The process by which an insolvency practitioner asks creditors to make decisions in an insolvency proceeding. This is applied from the commencement of insolvency proceedings where a company is put into CVL or where an administrator seeks consent to proposals.


    The decision procedure can be a virtual meeting, physical meeting, or by correspondence. 


    Where appropriate an insolvency practitioner can make a decision to treat the matter as ‘deemed consent’. The decision is made by the passing of time & no or inadequate challenge being made to cause the alternative decision procedure. 


    A decision procedure can evolve from deemed, virtual or correspondence to a physical meeting where it is sought in time by one of the following: - 

     10% of creditors in value 

     10% of creditors in number; or 

     10 creditors 


  • Department of Business, Innovation & Skills (DBIS)

    A Government department which runs the Insolvency Service in England & Wales. It has been formerly known as the DTI & BISS.

  • Director

    A person or a group of people who are responsible for the affairs of a limited company.  They are protected from liability for a company’s creditors if they act properly.

  • Discharge

    The restrictions for a bankrupt or DRO have come to an end. This is usually on the one year anniversary of the bankruptcy order or DRO. Exceptions apply to discharge where it is a criminal bankruptcy order, or a bankruptcy restriction agreement or order has been made in the intervening period, or the bankrupt has had repeated bankruptcy orders over specific periods.


    Discharge does NOT revert assets subject to the bankrupt estate back to the bankrupt if they are not already sold.

  • Dissolution

    A process that legally brings the life of a limited company to an end.  To start a dissolution process the limited company must have ceased trading for at least three months.

  • Dividend or Distribution

    When sufficient assets are realised & costs provided for, the insolvency practitioner shall, where funds permit, make payments to  creditors in their respective priority rights. This may be pence in the £ on the sum owed.

  • Employment Rights Act 1996 (ERA)

    The law which protects employees' rights where there is no contract or an employment contract is silent.



  • Enforcement Notices

    A Notice of Enforcement is the first stage of the enforcement process & gives 7 clear days to pay. Failure to take positive action in this time will result in enforcement. Your debt has then gone beyond the ability to dispute with the EA; you will need to pay it, then dispute it. If disputed you need immediate specialist legal advice. 


    If you are unable to pay in full within the 7 days, the EA will still need to attend with a view to taking control of your goods, even if you make an offer to pay by instalments. The EA will seek to identify a list of your goods (an inventory) that may be sold if the debt is not paid. This process is called “taking control” & places your goods under the legal control of the EA. The EA can allow you to keep the goods at the address & a short time in which to raise cash. In this event you will have to sign a Control of Goods Agreement (CGA). This confirms that you will keep the goods safe & in the same condition, not to dispose of the goods, nor allow another CGA to be put in place, without notification. This is legally binding. If you do not sign the agreement, the EA will consider taking good immediately.


    If you share your premises or have 3rd party goods the EA must give you or the owner time to evidence title. They are not entitled to enforce on other parties' goods. In most cases EAs do not have an automatic right to enter your premises. In cases where this applies the police can attend with them. Also see Bailiffs/Enforcements Agents.


  • Factoring

    A service provided by a financial institution which buys the right to an invoice for a % of its value from the service or goods provider. The invoice is assigned (transferred) to a financial institution & payment is collected directly by them. 

  • Fixed Charge

    A form of security over specific assets preventing the debtor from dealing with the assets without the consent of the secured creditor (fixed charge holder). Fixed charge assets are commonly buildings & land or items with a unique identity such as a serial number. In a company it is usual for the company’s goodwill to be a fixed charge asset. 



  • Floating Charge

    A form of security granted to a creditor over general assets of a company. When a company becomes insolvent the floating charge usually crystallises. Floating charge assets are fluid assets such as cash, stock, WIP, chattels, book debts. 

  • Forfeiture (landlord context)

    A legal remedy available to landlords to instruct EA’s to re-enter their property for non-payment of rent without notice; this action ends the lease. The only remedy is for a tenant is to apply to the Court to re-instate the lease, but this also requires all rent arrears to be paid to the Court before a hearing. Landlords can only use this remedy when referred to in the lease agreement & where no other remedy such as CRAR has been used in the same quarter. Also see CRAR & Bailiffs or Enforcement Agents for relevant information. 

  • Guarantee

    A legal commitment to repay a debt if the principal borrower fails to repay. It is common for directors to provide personal guarantees to lenders or suppliers who provide funding or supplies to their company.

  • Individual Voluntary Arrangements (‘IVA’)

    A formal debt solution to pay back debts over a period of time. Please click here 

  • Insolvency or Insolvent

    The most common definitions being:  

    Cashflow test: Unable to pay debts as and when they fall due

    Balance sheet test: Having insufficient assets to meet all debts 


  • Insolvency Act 1986 (IA)

    The Insolvency Act 1986 is the legal framework for all matters relating to personal & corporate insolvency in the UK.

  • Insolvency Practitioner (IP) or Office Holder

    Licensed Insolvency Practitioners are qualified individuals who are authorised by a governing body (that is approved by the government regulator) to act as an office holder in formal insolvency proceedings.  


    Properly authorised & licensed IPs who are appointed to act in insolvencies hold a current license (granted annual on 1 January), PI insurance, a bond & can be verified on their regulator's website. 


  • Insolvency Service (IS)

    A government agency that helps to deliver economic confidence by supporting those in financial distress, tackling financial wrongdoing & maximising returns to creditors. The IS house divisions such as the OR & RPS.

  • Interim Order

    A period of time in an IVA or CVA in which a Court Order is in force that stops all legal action or enforcement by creditors without the Court’s permission. 

  • Invoice Discounting

    A finance facility that allows businesses to get early income from a financier against the value of their sales ledger. When the you send out an invoice to your customer, a proportion of the total amount becomes available from the lender, providing an invaluable source of working capital throughout the month.



  • Landlords

    See Commercial Rent Arrears Recovery (CRAR) & Forfeiture 

  • Law of Property Act Receivership (LPA)

    The UK Law of Property Act passed in 1925 is a statute that contains provisions that give a secured creditor the right to appoint a receiver over the property of a debtor. Please click here for more 

  • Liquidation

    The process where the assets of a company are sold & or converted to cash & paid to satisfy its liabilities as far as possible. In the event of a surplus, after payment of all liabilities plus statutory interest, this will be distributed to the shareholders.

  • Liquidator

    A name given to a person who is responsible for dealing with the winding up of a company.  A liquidator must be a Licensed Insolvency Practitioner or the OR.

  • Member

    The owner of a company or a partner of a limited liability partnership. Also known as stakeholder & shareholder.

  • Members’ Voluntary Liquidation (MVL)

    A process that enables members  to appoint a liquidator in order to formally close down a solvent company. Please click here for more information 

  • Moratorium

    A period of time where enforcement action is prohibited in pending insolvency or insolvency proceedings.

  • Nominee

    A licensed insolvency practitioner nominated in an IVA, CVA or PVA proposal to act as supervisor. 

  • Official Receiver (OR)

    The Official Receiver (OR) is a civil servant & an officer of the Court, who deals with bankruptcy & compulsory liquidations although a licensed insolvency practitioner can replace them as liquidator or trustee in bankruptcy. The OR’s primary duty is to investigate the reason for insolvency & that the debtors account for their losses. 

  • Partnership Voluntary Arrangement (PVA)

    Please see Company Voluntary Arrangement (CVA)

  • Personal Guarantee (PG)

    See Guarantee

  • Petition

    A petition is a written application to the Court including the legal information required under statute for relief or remedy. For example a winding up petition or petition to bankrupt.

  • Preferential Creditor

    Creditors whose debts are preferential as defined by the IA. Most common being the employees for £800 arrears of wages plus accrued holiday entitlement. 

  • Proof of Debt

    A document submitted by a creditor to the office holder or the OR that states their debt.

  • Provisional Liquidator

    This is the name given to a licensed insolvency practitioner appointed by the Court to safeguard a company’s assets after the presentation of a winding up petition, but before a winding up order is made by the court. A temporary measure.



  • Proxy

    Authority given by a creditor or member to another individual (the proxy holder) to represent them (attend, speak &/or vote) at a decision procedure. The proxy may be a general proxy, giving the proxy holder discretion on voting, or a special proxy requiring them to vote as directed.

  • Receivership

    If a company defaults on a loan or payment to a secured creditor they can appoint a receiver over the company to sell its assets to pay back some or all of the debt. This is rarely used since Administration became prevalent in 2003. 

  • Redundancy

    Employment termination through no fault of the employee, as a result of the job becoming redundant.  Redundancy pay is a statutory monetary entitlement under the employee's contract of employment or the ERA which, in insolvency, is paid to the employee by the RPS. 



  • Redundancy Payments Service (RPS)

    A division of the Insolvency Services, which can take the place of the insolvent employer & settle some of its debts to its employees & steps in the shoes of the employee in the company, for the sums paid. See Employee section.

  • Retention of Title or Reservation of Title (ROT)

    A provision stated in a contract between a supplier & customer which causes the title to the goods supplied to remain with the supplier until paid for. 

  • Security

    A charge or mortgage over assets that secures the payment of a debt. If the debt is not repaid, a lender, with the benefit of the security, has a right to sell the charged assets.

  • Sole Trader

    An individual who owns a business (which is not incorporated) who is wholly responsible for its day to day running & its debts. Generally small firms with few employees.

  • Statement of Affairs

    A document presented by the director(s) of a limited company or a debtor, which estimates/shows all the assets & liabilities at a specific date on or around the insolvency.

  • Statutory Demand

    A formal demand for payment, which would have followed a letter before action, of an unpaid disputed debt over £35,000 for individuals or £750 for companies, which must be paid or properly challenged within 21 days of being issued. 


    Failure to defend or pay a statutory demand can lead to a winding up or bankruptcy petition being issued.


  • Supervisor

    The insolvency practitioner who is appointed to oversee IVAs, PVAs & CVAs. 

  • Taking Control of Goods & Walking Possession

    The legal practice under which an Enforcement Agent (EA) or HMRC issue a 7 clear day notice to recover a debt.  If the debt is not paid by 7 clear days after the notice,  the EA can call to take control of goods to the value of the debt & costs of enforcement. 


    The debtor will be given a Controlled Goods Agreement (CGA) to sign against goods identified; if refused, goods may be removed immediately. The EA has to give 7 clear days notice of the sale. it’s usually best to agree to the CGA so your goods aren't taken away immediately. If the goods stay, they must not be sold or traded, it is a criminal offence.


    In this period, to avoid your goods being taken & sold at auction you should pay the debt or agree a T2P. 


  • Time to Pay Agreement (T2P)

    A T2P  is an informal agreement to repay your debts in installments over a specific period of time. 

  • Transfer of Undertakings (Protection of Employment) regulations (TUPE)

    Legislation protecting the contract & right of employees where a business is transferred in whole or part. 

  • Trustee in Bankruptcy

    The insolvency practitioner who is appointed to deal with a bankrupt’s estate. 

  • Unsecured Creditor

    A creditor who does not hold security in relation to the debtor. Unsecured creditors are the general body of creditors whose rights to payment fall after preferential creditors. 

  • Winding up

    A phrase to describe the start of a liquidation.