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What Is Receivership?

Last updated: August 12, 2021

The quick answer

Receivership is where a bank or lender appoints an Administrative Receiver who must be a Licensed Insolvency Practitioner. This can only happen on a debenture created before the 15th September 2003. After that date they must appoint an Administrator.

You may also be thinking of an LPA Receiver. This is someone appointed to manage and sell a property by a lender.

In more detail

So there are two types.

An LPA Receiver

A Law of Property Act Receiver is appointed by a fixed charge lender (mortgage or loan) over a property. They will do this if you default on the loan terms. They do not need to go to Court to be appointed.

An Administrative Receiver

The  law changed in 2003 and Administrative Receivership has been gradually phased out. It was replaced by Administration. It is that bank that could appoint an Administrative Receiver just to get in the bank’s loan, mortgage or overdraft and they only had a duty to the bank. Therefore they would often ignore the other creditors and the employees which could leave them in a very precarious and uncertain position. Since 2003 an Administrator when appointed must deal with all creditors and employees as well.


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.

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Author: David Kirk - ACA FABRP
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David Kirk

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