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The Advantages And Disadvantages Of Receivership

The quick answer

Receivership or an LPA Receivership is used by banks to enforce their loan when a borrower defaults.

The advantage to a bank or lender is they get control of the security, for example, a freehold property, so it can be sold.  They do not need to go to Court to appoint an LPA Receiver.

The disadvantage for the borrower is they lose control of the property and maybe liable for any shortfall on sale.

In more detail

If you are a borrower, it is something you want to avoid unless you cannot pay the debt back and you are at the stage where you do not care what happens anymore.

To a lender or bank either appointing a Receiver or a Law of Property Act Receiver it gives them control of the asset they have lent on and they can secure it, insure it and arrange for it to be sold without the borrower interfering in that process.

The costs and expenses of an LPA Receiver can be added to the loan. We can quote a fixed cost for an LPA Receivership. 

The disadvantage to Receivership is probably the end of the lender and customer relationship and the property may not sell and cover the loan in full. In some cases the borrower may have given a personal guarantee.

Contact Us Today

To find out more about receivership and discuss your options please contact us today. We offer free initial advice and can arrange to meet or talk by Zoom or Skype.


If you need insolvency advice the earlier you talk to someone like us the better as you will have more options. We can help, contact us today.

More questions in this section

David Kirk


David Kirk ACA FABRP

We have just worked with Kirks to complete the closure of our company. Everything went smoothly and professionally. I would recommend this firm and the staff who were very very helpful and quickly finalised everything. Thank you Kirks.
Carol Hill



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David Kirk

Licensed Insolvency Practitioner