Scotland: process for pursuing—establishing apparent insolvency or an inability to pay debts
Produced in partnership with Joan Devine and Rachael Bicknell of Addleshaw Goddard LLP
Scotland: process for pursuing—establishing apparent insolvency or an inability to pay debts

The following Restructuring & Insolvency practice note produced in partnership with Joan Devine and Rachael Bicknell of Addleshaw Goddard LLP provides comprehensive and up to date legal information covering:

  • Scotland: process for pursuing—establishing apparent insolvency or an inability to pay debts
  • Coronavirus (COVID-19)/CIGA 2020
  • Entities that may be sequestrated or liquidated
  • Eligibility to petition for bankruptcy
  • Qualified creditor in a bankruptcy petition
  • Apparent insolvency in bankruptcy
  • Eligibility to petition for liquidation
  • The definition of ‘inability to pay debts’
  • How an inability to pay debts is evidenced in the liquidation process
  • Summary

Coronavirus (COVID-19)/CIGA 2020

This content is affected by the coronavirus (COVID-19) pandemic. For further details, take a look at our Coronavirus (COVID-19) toolkit. For related news, guidance and other resources to assist practitioners working on restructuring and insolvency matters, see: Coronavirus (COVID-19)—Restructuring & Insolvency—overview and News Analysis: Corporate Insolvency and Governance Act 2020—winding up petitions and statutory demands (Scotland).

Regulations to extend both Scottish Coronavirus Acts for a further six months have been approved by the Scottish Parliament. This means that the provisions in Part 1 of both Scottish Acts, subject to certain exceptions deemed no longer necessary, will now expire on 31 March 2021.

Entities that may be sequestrated or liquidated

A creditor can petition the court for the bankruptcy (also referred to as sequestration) of a debtor under the Bankruptcy (Scotland) Act 2016 (B(S)A 2016) (see Practice Note: Scotland: the process for applying for sequestration) or the liquidation of a company under the Insolvency Act 1986 (IA 1986)(see Practice Note: Scotland: compulsory liquidation). For a glossary of commonly used Scottish insolvency terms, see Practice Note: Glossary of Scottish insolvency words and expressions.

A creditor may petition the court to sequestrate the estate of a living or deceased individual, a partnership (including a dissolved partnership), a limited partnership (including a dissolved limited partnership), an unincorporated body, a body corporate or a trust (see B(S)A 2016, s 6 and

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