If a client is still trading

At the time of writing, individuals could still apply for a ‘statutory moratorium’ (see here) to protect themselves from enforcement action such as an earnings arrestment (if employed) or a bank arrestment or attachment or a creditor applying to have them declared bankrupt – the duration of the statutory moratorium protection at the time of this review was six months.

You may also be able to advise the client about the implications of continuing to trade, such as the risk to assets and further indebtedness.

Specialist advice is needed if the client has any business debts or complex business issues, such as a disputed tax debt. The client also needs specialist debt advice before deciding how best to proceed with their debts. A specialist adviser looks at the client’s overall situation (at home and in the business) and discusses how any action the client takes could affect their ability to continue trading. For example, a sole trader plumber who relies on trade credit for their business supplies may struggle to meet the credit limits imposed by bankruptcy or the Debt Arrangement Scheme. The client needs to be prepared to inform the supplier about this if they borrow more than the limit imposed by the legislation. Such a disclosure could put the client’s supply at risk.