Bailiff: This was the term for someone whose job it is to collect a debt on behalf of a Creditor. Since 21 April 2014 they have been called Enforcement Agents.

Balloon loan: A loan where a series of small payments is followed by a final large ‘balloon’ payment.

Bankruptcy: A method employed to help repay debts when a business does not have enough finances to keep up with repayments.

Bankruptcy order: An order made by the court that confirms and commences the period of a Debtor’s Bankruptcy.

Bankrupt: A person who against whom a Bankruptcy Order has been made.

Bankruptcy Petition: A request (known as a Petition) made to the court when a Debtor has failed to or cannot pay their debts and someone wishes for a Bankruptcy Order to be made.

Bankruptcy register: The bankruptcy register contains the details of all individuals who have been made bankrupt.

Bankruptcy restrictions order or undertaking: When a Bankrupt has been dishonest or in some other way to blame for their Bankruptcy they may have a court order made against them or give an undertaking which will mean that bankruptcy restrictions continue to apply after Discharge for a period of between two to fifteen years.

Balance sheet: A report that lists your assets (what you own) and liabilities (what you owe).

Bid rigging: A collusive fraud where an employee helps a vendor illegally obtain a contract that was supposed to involve competitive bidding.

Billing scheme: Is a fraud aimed at the payments system of a business. Its main purpose is to manipulate that system and cause the business to make a fraudulent payment to the employee. Though it is a payment to an employee, the business still records it as a legitimate business expense in its records.

Bribery: The offering, giving, receiving, or soliciting anything of value to influence an official act.

Bookkeeping: The process of recording all transactions within an organisation.

Bootstrapping: When someone uses their own money to fund their business.

Capital: Describes the total worth of a business in monetary terms.

Cash flow: A document that shows that money coming in and out of. business during a time period, usually a month.

Cash flow projections: A document that predicts the cash flow.

Charging order: This is an order of the court providing a (previously) unsecured creditor with a charge over property to secure their debt.To obtain a charging order a creditor must go to court, obtain a CCJ, and make two further court applications to obtain firstly an Interim Charging Order followed by a Final Charging Order. Once the Final Charging Order is granted the creditor holds a secured charge over the property. The Charging Order will need to be paid off on a subsequent sale of the property and provides the creditor with the opportunity to ask the court for permission to sell the property to obtain payment for their debt.

Collateral: When a loan is secured against an asset. If the loan can’t be paid, the asset is seized.

Companies House: Private and Public Limited Companies are required to make all their information public via Companies House (CH). CH also act to incorporate or dissolve companies.

Company Voluntary Arrangement (CVA): In simple terms this is a contract between a company and its creditors to repay some or all of its debt over a period of time.

Composition: This is an agreement between a Debtor and his/her/its Creditors. The compounding Creditors agree with the Debtor, and between themselves, to accept payment of less than the amount due to them, in full satisfaction of their claim.

Compulsory Liquidation: When a company is unable to pay its debts then a Winding Up Order is made following the presentation of a Winding Up Petition. This starts the process of Winding Up. Once a company is wound up it is in Compulsory Liquidation and either the Official Receiver or an Insolvency Practitioner will be appointed as Liquidator to Realise the company’s assets to attempt to make payment to the company’s creditors.It is most commonly used by a creditor who is owed more than £750, but it can also be used by the secretary of state on public interest grounds or by shareholders who think it is just and equitable to wind up their company.Unlike a Voluntary Liquidation, the directors and shareholders have no say in the initial choice of Liquidator.

Company Directors’ Disqualification Act 1986: This sets out how and when a person may be disqualified from acting as a company director. It provides that a director can be disqualified for between two and 15 years either as a result of providing an undertaking not to act as a director or by formally being disqualification order from the court.

Connected persons: Directors and their Associates, and Associates of a company.

Conflict of Interest: Fraud in which employees, managers or executives put their personal interest above the company’s interest. Usually resulting in an adverse effect on the organisation.

Corruption: Dishonesty that involves the following schemes; Bribery, Conflicts of Interest, Economic Extortion and Illegal Gratuities.

Court-appointed receiver: A person appointed to take charge of assets, usually when they are subject to some legal dispute. The procedure may be used other than for a limited company, for example, to settle a partnership dispute or in equitable execution (e.g. in a divorce).

County Court Judgement (CCJ): When someone takes someone else to Court for not paying debt. The Court then makes it a legal obligation for the debt to be paid. If it’s still not paid, the company can take further action.

Creditors: Someone who is owed money.

Creditors committee: A group of between 3 and 5 Creditors appointed to assist the Office Holder during the course of an Insolvency process. The Creditors Committee often makes decisions on behalf of the general body of Creditors.

Creditors meeting: A meeting of the Bankrupt’s/company’s creditors where resolutions are passed or important decisions about the Insolvency Process are made. These can include, for example the basis of remuneration of the Trustee in Bankruptcy, Liquidator or Administrator. All creditors are entitled to attend and vote at meetings either in person or by proxy. In some Insolvency processes they provide the opportunity for Creditors to attend and question those previously in charge of the company.

Creditors petition: If a creditor is owed £750 or more, they can petition to make the person or business who owes them bankrupt.

Creditors Voluntary Arrangement: A deal whereby a percentage of the debt is paid over a period of time to ease pressure from creditors.

Creditor’s Voluntary Liquidation: A liquidation of the company initiated by its Shareholders or an Insolvency Practitioner.

Credit limit: The maximum amount of money you can borrow from a lender.

Credit rating: A tool that banks and lenders use to assess how likely you are to pay a loan back.

Credit score: Your ability to pay back loans and monies throughout your lifetime is calculated. The outcome of that calculation is your credit score.

DBIS: DBIS is the Department of Business, Innovation and Skills is a Government agency which acts in the interest of all and aspires for higher productivity in all industries by promoting enterprise, innovation and security. They also aid in employment issues such as redundancy and run the Insolvency Service in England and Wales.

Debenture: A legal instrument creating security over a company/LLP’s assets. The Debenture may contain a Fixed Charge and/or Floating Charge. It must be registered at Companies House within 21 days of creation to be 100% valid.

Debt consolidation: Combining various monthly loan repayments into a single monthly loan repayment. Helpful in reducing interest payments.

Debtors: The person or business who is owed money.

Debt financing: When someone borrows money with an agreement to pay it back with interest.

Debt Petition: When a debtor decides to become bankrupt.

Debt service coverage ratio: A ratio of the cash someone has available to pay a debt.

Declaration of solvency: A summary statement showing the assets and liabilities of a company together with a statement that the company will be able to pay its debts together with interest and costs within 12 months of the liquidation commencing. It is required in a Member’s Voluntary Liquidation to demonstrate that the company is solvent. It is sworn by the majority or all (where they number less than 2) of directors. Making an incorrect declaration (i.e. where the business is insolvent) can have severe consequences.

Depreciation: When the value of an asset decreases over time.

Directors: The decision makers and controllers of a company. Unlike sole traders, their personal money is not at risk, if they run into debt issues.

Directors Disqualification: When a Director is disqualified for acting recklessly or committing insolvency offences. A Director could be disqualified if his/her company goes bankrupt.

Directors Loan Account: When a Director borrows money from his / her own company.

Discharge: When a Bankrupt is no longer subject to the automatic restrictions of Bankruptcy they are said to be discharged. Until that time a Bankrupt might also be known as an undischarged bankrupt. Discharge occurs after 12 months unless the Discharge is suspended, which usually only happens if the Bankrupt has failed to co-operate with the Official Receiver or Trustee in Bankruptcy, or has been guilty of wrongdoing prior to being made Bankrupt.

Disabilities of a bankrupt: It is a criminal offence for an undischarged bankrupt to, amongst other things: act as a Director or take part in the management of a limited company, obtain credit of over £250 without disclosing his/her status, trade in a name other that that under which he/she was made bankrupt and hold certain public and other offices

Dissolution: A processes that legally breaks up a company that no longer wishes to trade. In order to start the process, a company must stop trading for three months.

Distraint: A processes that legally allows the agents of a landlord to enter their tenants (business) properly and remove goods and assets to reclaim debt. No court order is needed.

Distress: A distress gives a landlord the right to sell tenant assets to retrieve rent arrears

Dividend: A payment made out of assets Realised by the Licensed Insolvency Practitioner who is holding the office of (for example) Liquidator to Creditors of the Bankrupt or Insolvent Company. Dividends are paid at the same rate to everyone within a particular class of Creditor.

Economic Extortion: A scheme which involves an employee demanding payment from a vendor in order to make or influence a decision in that vendor’s favour.

Embezzlement: The theft or fraudulent appropriation of money through deception.

Equity financing: When someone funds your business in exchange for owning a slice in the business.

Extortionate credit transaction: A transaction where credit is provided on terms that are exorbitant or grossly unfair, compared with the risk accepted by the creditor. This transaction may be challenged either by an Administrator, a Liquidator or a Trustee in Bankruptcy.

FICO score: A method used by lenders to determine whether they should lend someone money or not.

Floating interest rate: An interest rate which changes with economic and market conditions.

Fictitious expense: Where an employee invents an expense and then request a reimbursements for it. This can include receipts from companies who provide fake or novelty receipts.

Fictitious revenue: Created when an employee rings or enters a false sale into the companies accounting system or register. Many times fictitious revenues are created in Payroll Commission Schemes to increase the sales reps commission. The employer believes the sale to be legitimate and issues a commission check to the salesperson.

Financial statement fraud: The intentional misstatement of financial statements by omitting critical facts or disclosures, misstating amounts, or misapplying GAAP.

Fixed interest rate: An interest rate which stays the same no matter what happens in the economy.

Fraud prevention: All efforts and means extended to deter fraud from occurring; involves eliminating perceived pressures, perceived opportunities and / or rationalisations; any action that discourages or diminishes the likelihood that fraud will occur.

Fraudulent trading: When a company trades knowing they can’t pay back debts.

Front loading trading: A fraudulent process where representatives of legitimate or fraudulent MLM’s are required to buy large, expensive amounts of inventory.

Going concern: Where the company is continuing to trade for the current period and can cover its costs and make money.

Grace period: A grace period is when debt repayments are paused to allow the debtor to find the means to pay the debt without incurring an additional cost, interest rate or other charges.

Ground floor opportunity: A classic marketing scheme that makes people believe that they will make money simply because they are one of the earliest investors in a new venture.

Guarantor: When a loan is secured against another person. If someone can’t pay back the loan, the guarantor is legally obliged to do so.

Headhunter fees: Fees paid as a commission for recruiting someone to fill a position; often paid in multi-level marketing organisations.

HMRC: Her Majesty’s Revenue and Customs: the Government body which regulates and collects PAYE, NIC, VAT, and Tax.

Illegal gratuities: Similar to bribery, except that there is no intent to influence a particular business decision, but rather to reward someone for making a favourable decision.

Informal agreement: An agreement between a debtor and creditor to reduce repayments without the need of a third-party mediator or legal proceedings

Income statement: A document that shows how much a business has spent and earned over a period of time.

Injunction: A court order to do something

Insolvency Act 1986: Someone who takes control of a failing business to rescue or restructure it, or to close it down.

Insolvent liquidation: A Liquidation where the available assets are insufficient to pay all debts. An insolvent liquidation will either take the form of a Compulsory Liquidation or Creditors’ Voluntary Liquidation.

Insolvency Practitioner (IP): Someone who takes control of a failing business to rescue or restructure it, or to close it down.

Insolvent: A state of a company who does not have enough funds and assets to pay debt at any given time. Liabilities (what they owe) exceeds assets (what they own).

Insolvent company: A company that cannot pay a debt when the time to pay it comes.

Insolvent Partnership Order 1994: An Order setting out the procedures for dealing with insolvent partnerships. The Order provides for winding up an insolvent partnership as an unregistered company, with or without concurrent insolvency proceedings against individual partners; for the joint bankruptcy of individual partners, without winding up the partnership as an unregistered company; and for the application of the administration and company voluntary arrangement procedures to insolvent partnerships.

Individual Voluntary Agreement (IVA): When an individual is insolvent and cannot pay debt, an IVA gives them a chance to be relieved of debt and start fresh.

Interim Order: When someone applies for an IVA (see above) they can ask the court to protect them from legal or bankruptcy actions by someone they owe money to i.e. their creditors.

Investigating Accountants: Accountants who review a business on behalf of a bank who is considering them the business money.

Invoice factoring: When a business sells the invoices they are owed to a factoring company.

Invoice kickbacks: Fraud schemes perpetrated by an employee and the employee’s vendor or customer. It usually involves the employee buying goods or services at an overstated price.

Joint Several Liability: When more than one person is responsible for a specific debt. A creditor can therefore chase any partner in the debt and recover whatever funds possible.

Kiting fraud: Conceals cash shortages by transferring funds from one bank to another and recording the receipt of on or before the balance sheet date and the disbursement after the balance sheet date.

Law of Property Act 1925: Governs transactions in law and property. Contains statutory powers of receivers appointed under a fixed charge.

Levy: A levy is when property or assets are seized in order to pay a debt.

Loan to value: When a lender values an asset to see if it could be sold to repay a loan before agreeing for it to be a collateral in the loan agreement.

Liability: Any business expense that needs to be paid.

License holder: A person who holds an Insolvency Licence issued by one of the recognised professional bodies.

Lien: The name given to collateral secured against a debt.

Line of credit: When a lender offers a pool of funds that a business can draw upon any time and access quickly.

Liquidation: The process of dissolving a company by selling all of its assets. The business ceases to exist.

Liquidation committee: Another name for a Creditors Committee appointed in a Liquidation.

Liquidator: The person who conducts the Liquidation.

Liquidity of an asset: Determines how easily an asset can be sold. The easier it is to sell, the more ‘liquid’ it is.

Long term debt: Any debt that takes longer than a year to pay back.

LPA receiver: As defined by the Law of Property Act 1925, an LPA Receiver is a person (not necessarily an insolvency practitioner) appointed to take charge of a mortgaged property by a lender whose loan is in default, usually with a view to sale or to collect rental income for the lender. An LPA Receiver may be used, for example, upon the failure of a property developer, whose borrowings will largely be secured on specific properties.

Mandatory Injunction: Court order to make someone do something.

Mareva Injunction: Court order preventing the disposal of assets.

Members Voluntary Liquidation: The company is solvent and the directors make a Declaration of Solvency confirming that the company is able to pay its debts and liabilities together with costs and interest in full within 12 months. Any surplus is distributed to shareholders who will be able to claim Entrepreneurs Relief on this distribution and pay tax at 10 per cent.

Merchant cash advance: A loan calculated based on a companies revenue, with repayments made based on revenue too.

Misfeasance: Breach of duty by a company/LLP’s directors/members in respect of their dealings with company/LLP funds or property. A Liquidator has a right to sue a the offending party for Misfeasance to recompense the company Creditors.

Net worth: The sum of subtracting assets and liabilities.

No Fault Bankruptcy: Under the Enterprise Act 2002, the UK Government significantly relaxed the rules regarding bankruptcy. From April 2004, the sole trader or partner in a partnership who has a failed business can file for bankruptcy and be discharged from that bankruptcy within, for example, 12 months. The condition is that the reason for the failed business cannot be due to fraud, misfeasance, recklessness or anything similar.

Nominee: The person who brokers a deal with creditors on behalf of a company or individual who owes them money. A nominee is usually an Insolvency Practitioner.

Occupational fraud and abuse: The ACFE in its publications has identified several categories of occupational fraud schemes which are the basis of how we detect and prevent fraud. You can view those identified categories in the report the nation which is available in a free pdf download on their website.

Office Holder: A Liquidator, Provisional Liquidator, Administrator, Administrative Receiver, Nominee or Supervisor of a voluntary arrangement, or Trustee In Bankruptcy.

Official Receiver: The Official Receiver is a civil servant in The Insolvency Service and an officer of the court. They will be notified by the court of the bankruptcy or the winding up order. They will be responsible for administering the initial stage. This stage includes collecting and protecting any assets and investigating the causes of the bankruptcy or winding up.

Partnership: When more than one person owns a business.

Partnership Voluntary Agreement: Same as a Company Voluntary Agreement but applying to a business set up as a partnership (see above).

Pay As You Earn (PAYE): This is a Government scheme where your tax is deducted from your monthly wage and paid for you by your employer.

Pension fund: Contributions made towards a pot of money that will be available for a person when they retire.

Personal guarantee: When the business owner acts as a personal guarantor for their business loan. So if they can’t pay back the loan, they will have to use their personal money to do so.

Petition: A written application to the court and used by creditors, individuals or directors to commence proceedings to wind up a company (Compulsory Liquidation) or place it into Administration, or make an individual Bankrupt.

Preference: A type of transaction carried out by a company’s directors prior to an Insolvency process commencing, or a Debtor prior to bankruptcy, intended to favour one creditor over another (also known as putting them in a better position).

Preferential creditor: A Creditor who is paid ahead of unsecured Creditors and floating charge Creditors. Occupational Pension Schemes and Employees (for £800 of wage arrears and all holiday pay) are the most common. May people think HM Revenue & Customs hold this elevated status, but did you know HM Revenue & Customs lost this status on 15 September 2003?.

Principle: The amount outstanding on a loan minus interest.

Private Limited Company: A company’s who stock cannot be owned publicly by anyone. Limited to 50 Shareholders.

Prohibitory injunction: A court order to make someone stop doing something.

Proof of debt:A document of form submitted by a Creditor providing details of what is owed to a Creditor.

Proof restriction: When a creditor puts a restriction on the property during an IVA.

Provisional liquidator:The name given to a Licensed Insolvency Practitioner appointed to safeguard a company’s assets after presentation of a Winding Up Petition.

Proxy form:A form giving a creditor or a member/shareholder the right to vote at a creditors’ or members’ meeting when they cannot be present by appointing a proxy holder to vote on their behalf.

Public examination: When a company is in Compulsory Liquidation or in Bankruptcy proceedings, the Official Receiver may, at any time, apply to the court to question the company’s director(s) or any other person who has taken part in the promotion, formation or management of the company; or the bankrupt. Failure to attend a public examination can lead to an arrest warrant being issued.

Public Limited Company (PLC): A company’s who stock can be owned by anyone in the public domain.

Purchase schemes: Purchase schemes with company funds can consist of personal purchases through false invoicing, on company credit cards or other credit accounts.

Realising an asset: Realising an asset means selling it or disposing of it to raise money, or collecting it in in the case of debtors or cash at bank.

Recognised professional body: An organisation able to authorise its members to act as Licensed Insolvency Practitioners./li>

Receiver: Someone who is responsible for collecting a bank’s debts.

Receivership: When a company defaults on a loan or payment the debt holder can call on a receiver to go into the company to sell the companies assets in order to pay back some or all of the debt. The company in receivership will lose control of the business while the receivers sell the assets and the company will usually be liquidated, the business may be sold and there is usually a loss of jobs.

Redundancy: When a staff member is either permanently or temporarily dismissed for a non-performance-related issue. For example, the business may be struggling financially or there is no need for a specific department.

Reservation of title:A clause used in a contract by a seller to retain legal title to the goods they have supplied until such time as they are paid for. Under the Sale of Goods Act title passes upon delivery unless this default position is changed within the terms and conditions of supply/purchase. It is a complex and continually evolving area of law./li>

Rescission: A procedure that cancels or rescinds a Winding Up Order. Similar to Annulment in a Bankruptcy./li>

Retention of title: A clause that lets a supplier keep ownership of products/services supplied until certain conditions are met.

Right to offset: If your credit card and the current account are with the same a bank, in some circumstances the bank can take money from your current account to pay your credit card debt – without your permission

Sales schemes: Can occur through creating fictitious sales, altering sales receipts and altering commission rates.

Scheme of arrangement: A compromise or arrangement between a company and its creditors or members or any class of them under section 425 of the Companies Act 1985, which may involve a scheme for the reconstruction of the company. If a majority in number representing three-quarters in value of the creditors, or members, or any class of them, agree to the compromise or arrangement, it is binding if sanctioned by the court. Section 425 may be invoked where there is an administration order in force in relation to the company, where there is a liquidator or provisional liquidator in office, or where the company is not subject to any insolvency proceedings.

Secured Creditor: A Creditor who holds security over a person’s/company’s assets, e.g. a bank, or other financial institution. This class of Creditor is paid from the proceeds of the sale of the security – i.e. before unsecured creditors.

Secured loan: A loan that is secured against something else e.g. an asset or another person (guarantor). If a loan can’t be paid, the asset will be sold or the guarantor will have legal responsibility to cover the debt.

Segregation of duties:The division of tasks into two parts, so one person does not have complete control of the task.

Shadow director: Someone upon whose instructions and decisions the de jure and/or de facto directors act. A shadow director often acts behind the scenes because there is a reason he/she cannot be appointed.

Shell company:A fake entity that is solely created to bill a company for goods or services it does not receive. A shell company could also be set up to mirror an existing company already used as vendor only this company has a spelling deviation in the name allowing it so the perpetrator to register it as a viable business. When this fraud scheme occurs, the perpetrator writes the check to the shell company, endorses the back of the check and deposits it into the shell bank account. They enter the payment on the books and records as a payment made to the actual vendor. Banks and business managers don’t always notice the deviation in the spelling and think the payment was legitimate.

Simultaneous Voluntary Arrangements: A mechanism to link together a number of simultaneous individual voluntary arrangements to protect the partnership and individual debtors. It allows the partnership arrangement to deal with partnership debts and individual arrangements to deal with any individual debts. It also protects the individual partners from the fallout of the partnership debts to the individual.

Small Firms Loan Guarantee Scheme: Small Firms Loan Guarantee Scheme: By providing a government guarantee against default by borrowers, the Scheme enables high street banks and other financial bodies to lend between £5,000 and £250,000 to new and existing businesses. The DTI underwrites 75 per cent of the loan. So if the company failed the bank will be able to claim up to 75 per cent back form the DTI.Shareholders Owners of the business, someone who has bought shares on the open market if it is a quoted PLC. Or owns a stake in a limited company. They have a say in how the business is run and earn a share of the profits as a dividend.

Sole trader: An owner of a business who is wholly responsible for the day to day running of the business and its debts. They are generally small firms with few employees.

Special manager: Often a professional appointed to assist the Official Receiver, Liquidator or Trustee in Bankruptcy in managing an insolvent’s business.

Statement Of Affairs: Statement Of Affairs: A statement of what you own, what assets you have and your liabilities and cost of living to summarise your financial affairs.

Statutory Demand: Usually this action is taken after a creditor has obtained a Judgment. It is a formal demand for payment of an undisputed debt (over £5000 from 1 October 2015) – the debt must be paid within 21 days of the demand being issued. Failure to pay a statutory demand can lead to a winding up petition or bankruptcy being issued. In any event, the creditor has to pay to issue this document/action and therefore he/she/it is now becoming much more serious.

Summon: Order to appear or to produce evidence to a Court.

Supervisor:The Supervisor collects payment of CVA/IVA contributions and ensures that contributions are kept up to date; failure to keep up to date can cause the supervisor to default and abort the CVA/IVA leading to liquidation/bankruptcy.

Tax fraud: Wilfully and intentionally violating the legal duty of voluntarily filing income tax returns or paying the correct amount of income, employment or excise tax.

Time order: A time order is when a court can change the terms of a credit agreement.

Term loan: A type of loan which is paid back at specific intervals as opposed to regular monthly payments.

Timing differences: Occur when the calculation of net income for accounting purposes varies from that determined for income tax purposes. Timing differences are temporary in and journal entries are used to reverse the difference over time.

Token payment: A token payment is when a debtor pays an arbitrary sum to its creditors when it can’t make the pre-agreed monthly payments. A token payment could be as low as £1.

Trading out: Working through problems, this phrase is used where you continue to trade through tough times in order to rectify your problems and improve your company’s health. Trustee in bankruptcy A Person who holds property in trust for another. In bankruptcies the IP holds the property of the bankrupt in trust for creditors and is referred to as the trustee. Turnaround practitioner An advisor who specialises in helping ailing companies solve their problems and get back on their feet, a simple analogy of this would be to describe a turnaround practitioner as a company doctor.

Transaction at value: The disposal of a company’s or individual’s assets or any other transaction which occurs at a significant reduction to true value within the 2 years prior to Liquidation or Administration, or within the 5 years prior to Bankruptcy. Transactions at an undervalue can be challenged by a Liquidator, Administrator or Trustee In Bankruptcy. The outcome of any challenge can be the recovery of the assets disposed of or payment being recovered from either the beneficiary or (in the case of a company) the directors.

Trustee in bankruptcy: The name given to the Insolvency Practitioner or Official Receiver in any Bankruptcy. The Trustee in Bankruptcy’s duty is to Realise the assets of the Bankrupt in an attempt to secure repayment for the Bankrupt’s Creditors.

Unsecured loan: Loans not secured against collateral (such as an asset) or a guarantor.

Unsecured creditor: Any creditor who does not hold security over the insolvent individual’s/company’s assets. This class of creditor will be the last in the queue to receive a Distribution from the insolvency procedure.

Value Added Tax (VAT): A duty that is paid on qualifying goods of 20% above the company’s selling price less any VAT paid for goods the company has bought in the same period. This is collected by companies for the HM Revenue & Customs.

Voluntary liquidation: Creditors’ Voluntary Liquidation (CVL): relates to an insolvent company. It is commenced by resolution of the shareholders, but is under the effective control of creditors, who can choose the liquidator. Members’ Voluntary Liquidation (MVL): A solvent liquidation where the shareholders appoint the liquidator to Realise assets and settle all the company’s debts, plus interest, in full within 12 months.

Vendor fraud: An overcharge for purchased goods, the shipment of inferior goods, or the non-shipment of goods even though payment is made.

Walking possession: A bailiff (for the County Court) or Sheriff (for the High Court) has visited your premises and obtained entry. He /she has asked for payment of the proven debt. If you have not paid this plus the court and his costs he can “take possession” of the goods, equipment, fixtures, stock etc on the premises. Effectively if you do not reach a deal or pay in full he can remove and sell the assets in five days. To sell the assets after they are covered in this way is a criminal offence. If the bailiff has obtained a walking possession he can force entry to recover the goods after the 5 day period.

Warrants: In law, a warrant can mean any authorisation. Often in statute the warrant of a particular person is required before certain administrative actions can take place. As the creditor has not been paid under the judgement the creditor can apply to the court for a warrant of execution. If the debtor is in another area the court can forward this to the local court. A notice of warrant will be issued to the debtor. If payment is not made a bailiff of the court can be sent to collect payment or seize goods.

White collar crime: White-collar criminals are opportunists, who over time learn they can take advantage of their circumstances to accumulate financial gain. They are educated, intelligent, affluent, confident individuals, who were qualified enough to get a job which allows them the un-monitored access to often large sums of money. Many also use their intelligence to con their victims into believing and trusting in their credentials. Many do not start out as criminals, and in many cases never see themselves as such.Financially motivated nonviolent crime committed by business and government professionals. Within criminology, it was first defined by sociologist Edwin Sutherland in 1939 as “a crime committed by a person of respectability and high social status in the course of his occupation”.

Windfall: A lumpsum amount generated during an IVA or bankruptcy that helps towards paying off debt.

Winding Up Petition (WUP): A tool that can be used should a debtor continuously refuses to pay its debts so the company presents its petition to the Court to have the company closed down.

Winding Up Order (WUP):When the Court agrees to the petition for the company to be placed in Compulsory Liquidation.

Working capital: The amount of money a business needs for meeting its daily running costs.

Writ: Writ issued by the court directing a sheriff to levy execution upon a debtor’s goods.

Wrongful trading: A Director may be held liable for wrongful trading if they allowed the company to continue in business when they knew or ought to have known that there was no prospect of meeting the company liabilities as they fell due. Put simply lying about the current state of the company and hiding from reality.