Wylie & Bisset reminds professionals of merits of Business Debt Arrangement Scheme
Chartered accountants Wylie & Bisset is advising professionals and other intermediaries with business clients concerned about financial distress resulting from the current social distancing measures to consider a DAS Debt Payment Programme.
A Debt Payment Programme under the Business Debt Arrangement Scheme is a business statutory debt management tool available to Scottish businesses. It can only be set up by an insolvency practitioner.
Gordon Chalmers, partner and insolvency practitioner at Wylie & Bisset, said that, if approved, a Debt Payment Programme allows all debts of the business to be repaid over a period of up to five years. If creditors have started the legal process of recovery, then a Business DAS will stop this action going further.
He said: “If approved, the plan will freeze all interest and charges. To be eligible for the scheme, you must demonstrate that the business: has more than one creditor; has a place of business in Scotland and operates under Scots Law; can sustain a payment to repay debts off within five years; has declared all its assets to an Insolvency Practitioner.”
When a business applies for the plan, an insolvency practitioner must provide a declaration that the business: has a reasonable prospect of being able to complete the Debt Payment Programme; can make the payments within five years and is trading or is operating in the purpose for which it was formed.
The types of business that can apply for this scheme include: a partnership; a limited partnership; a corporate body other than a company registered under the Companies Act 2006; a trust and an unincorporated body of persons, such as a football club.
Read all of our articles relating to COVID-19 here.