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can an insolvency practitioner have higher success rate at recovering trade debt from a liquidated company ?

Hi Everyone

I have been approached by a company offering debt collection services. The company suggests they have a higher success rate on recovering debt with liquidated companies than we could achieve by dealing with the administrators ourselves. 

My understanding was that once a company was in liquidation then all non preferential creditors received a % share of any monies left after the preferential creditors.

So how is it possible that by using the services of an insolvency practitioner, rather than dealing with the administrators directly, you have a have a higher success rate on recovering your debt ?

My inital thoughts were that this was just a sales pitch, but i would appreciate your thoughts on this.


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08th Jan 2013 02:27

Is the Debt collection firm offering his services or offering to buy the debt?

If it's the firm are trying to purchase the debt, it may be worth looking a the re-use of a similar name and the directors' personal liability (Section 216 & 217 of the Insolvency Act 1986) to see if this has any relevance to the company in Liquidation.

Other than that I don't see how using an IP would be of much help - although the know the law and will be comfortable to call the Liquidator out on any decisions made that don't properly benefit the creditors. They may also seek to cap the Liquidator's remuneration depending on whether or not a resolution has been passed previously... There's a few things that can be done to increase your chances of a return but nothing that an individual couldn't do themselves with a bit of research.

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