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Can Receivership Be Stopped?

The quick answer

Yes, but only if you pay off the debt due under it before the date of Receivership. Alternatively, it is worth negotiating with the lender who has the charge on the assets to give you more time to pay or to refinance the debt if this is a realistic possibility.

In more detail

Receivership is nearly always triggered by a secured lender who has not been paid. Often this is a bank.

There are various types of Receivership. Pre 15th September 2003, all banks had the right under a debenture loan to appoint an Administrative Receiver. The law then changed to only allowing the appointment of Administrators. The main reason for this change was that an Administrative Receiver only had a duty to repay the bank, so did not help the general body of creditors to try and recover their money.

Another type of Receiver is a Law of Property Act Receiver (often called an “LPA Receiver”). They are appointed by a money lender – typically a bank over a property asset.

In all cases the lender will only appoint a Receiver if the borrower is in breach of the loan terms and this typically means that the debt or loan has not been repaid in time or instalments have been missed.

A Word Of Advice

If you can repay the debt then the lender will not appoint a Receiver. The alternative is to try and negotiate new terms with the lender and then re-finance or sell the asset yourself beforehand.

More questions in this section

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