Glossary of Corporate Recovery & Insolvency Terms

To ensure you get the maximum benefit from the information contained within this website, we have provided a glossary of the most frequently used terms you are likely to come across in the world of insolvency and business recovery. We accept however, that it is not possible to cover every phrase or term and, as such, should you require further information, we would urge you to contact your local Harrisons office, who will be only too pleased to assist you.

Administration/Administration Order

This is a process by which the directors of a company, its creditors or the holder of a qualifying floating charge place the company into administration by filing the requisite appropriate notices at court. Administration protects the company from its creditors, while the Administrator prepares a proposal for the creditors.


The licensed insolvency practitioner appointed to deal with the Administration of the company by either the directors, creditors or holders of a qualifying floating charge.

Administrative Receiver

A licensed insolvency practitioner who has been appointed by the holder of a debenture (more often than not banks), to realise the company's assets on behalf of the debenture holder.

Administrative Receivership / Receivership

The process under which an insolvency practitioner is appointed receiver by a debenture holder to realise the company's assets on its behalf. This process has become less common since September 2003 when the Enterprise Act 2002 came into force.


A formal application to the Court, the effect of which is to cancel the Bankruptcy Order.


Property and goods belonging to the company, partnership or individual

Bankruptcy Restriction Order (BRO)

BRO’s were introduced on 1 April 2004 whereby a bankrupt who has been dishonest or in some other way to blame for their bankruptcy, may undertake or have a court order made against them which will mean that the restrictions within the bankruptcy continue to apply despite discharge for a period of between two to 15 years.

CCJ/County Court Judgment

A decision in favour of a creditor in respect of the debt they are owed.


A security interest taken over the property of a company or individual by one of its creditors to protect itself against non-payment. Typical examples are a mortgage or debenture

Compulsory Liquidation

This occurs where a petition is made to the court to wind up the company. Such petitions are normally presented by creditors.


A person who is owed money by a company, partnership or individual

Creditors' Voluntary Liquidation

A process by which the directors of a company convene a meeting of shareholders and creditors to place the company into insolvent liquidation. This is done with the assistance of a licensed insolvency practitioner instructed by the directors.

Creditors' Meeting

A meeting held at which creditors can put forward their views and vote on resolutions put before them.

Company Voluntary Arrangement (CVA)

An agreement put forward by a company to its creditors through a licensed insolvency practitioner, usually to agree a full and final settlement with the company's creditors. This is normally done either by making a monthly contribution over a period of time or a one off payment to creditors' in settlement of their claims.

D Report

All liquidators (insolvent liquidations only), administrators and administrative receivers are required to submit a report to The Insolvency Service on the conduct of all directors and shadow directors of a company over which they are appointed. The Department of Trade and Industry will, in appropriate circumstances, carry out an investigation into the affairs of the directors and may choose to commence disqualification proceedings against those directors who they believe are unfit to act as company directors

Debenture / Mortgage Debenture

A type of security, usually held by banks, which includes a floating charge over the company's assets. Depending on when it was dated it gives a right to appoint administrative receivers or an administrator over the company.


A sum distributed to the creditors of the company.


A person who owes money to the company, partnership or individual

Debt consolidation

Taking out one large loan to pay off a number of smaller debts.

Debt management plan

A repayment scheme to pay off part or all of your debts.

Directors Disqualification

A procedure whereby a director has a court order made against them or gives an undertaking to the Secretary of State, which makes it an offence for that person to be involved in the management or directorship of a company for the period specified in the order. (See D Report)


This is where goods are seized and ultimately sold towards payment of a debt. Distraint is generally available to HMRC and the landlord of the business premises in respect of unpaid rent.

Equity in a property

The surplus funds following the sale or re-mortgage of your house, after having paid off all of the mortgage/secured creditors.

Fixed Charge

A charge held over specific assets. The company will not be able to dispose of such assets without specific consent of the chargeholder. An example of this would be a charge over land and buildings, whereby they cannot be sold without the chargeholder's consent.

Floating Charge

This is a type of charge held over all of the assets of a company not subject to a valid fixed charge. Such assets can be used in the ordinary course of business and include, stock, office equipment, motor vehicles.

Insolvency Practitioner/Licensed Insolvency Practitioner

Under the Insolvency Act 1986, only persons who are licensed insolvency practitioners can act as liquidators, supervisors of voluntary arrangements, administrators, administrative receivers and trustees in bankruptcy. It is a criminal offence for anyone who is not a licensed insolvency practitioner to act as one. Furthermore, any purported appointment by someone who is not licensed could be void.

Individual Voluntary Arrangement (IVA)

A formal agreement between the debtor (not a company) and his creditors administered by a licensed insolvency practitioner usually in full and final settlement of all debts.


The amounts owed by a company, partnership or individual to its creditors.


The Official Receiver or licensed insolvency practitioner appointed to act as liquidator of a company or partnership.


A licensed insolvency practitioner, who assists in preparation of the proposal and convening of the meeting of creditors in a company, partnership or individual voluntary arrangement prior to its being approved by creditors.

Official Receiver

A civil servant working for the Department of Trade and Industry who deals with the affairs of a company in liquidation.

Partnership Voluntary Arrangement (PVA)

A voluntary arrangement for a partnership over the partnership assets. A licensed insolvency practitioner has to be appointed as the nominee/supervisor.

Personal Guarantee

A guarantee of payment given by someone, more often than not a director of a company, in respect of a company’s liability(ies).

Preferential Creditor

A creditor who is entitled to receive certain payments in priority to floating charge holders and other unsecured creditors. These creditors include occupational pension schemes and certain monies due to employees.

Proof of Debt

A form to be completed by creditors, in all insolvency procedures, which details the basis on which they are owed monies.

Provisional Liquidator

Either the Official Receiver or a Licensed Insolvency Practitioner appointed by the court to safeguard the company's assets pending the making of a winding up order. 

Proxy Form

If a creditor cannot attend the meeting of creditors themselves and wishes to appoint someone to represent them, they must fill in this form and return it to the convener of the meeting.

Retention of Title (ROT)

Suppliers of goods, often have standard terms and conditions whereby they retain ownership/title of the goods they have supplied, until they have been paid for them.

Secured Creditor

A creditor who holds security over the assets of the company, normally in the form of a charge or debenture. Secured creditors do not normally vote at meetings of creditors, choosing instead to rely on their security.

Shadow Director

A person, although not formally registered as a director at Companies House, on whose instructions the directors/employees of a company are accustomed to acting.

Statement of Affairs

This is a document which has to be verified by Affidavit, completed by the company's director[s], which gives details of all of the company's assets and liabilities and creditors.

Supervisor of CVA/PVA/IVA

A licensed insolvency practitioner, who has been appointed to supervise the voluntary arrangement agreed between the company/partnership/individual and its creditors and to ensure the terms are fully complied with.

Trustee in Bankruptcy

The licensed insolvency practitioner appointed by either the Official Receiver, or the creditors, to deal with the affairs of the bankrupt.

Unsecured Creditor

A creditor who does not hold security (such as a mortgage) for money owed. Noted unsecured creditors are HMRC and general suppliers.

Undischarged Bankrupt

An individual against whom a Bankruptcy Order has been made and has not yet received their discharge.

Winding-Up Order

An order of the court for the compulsory winding up of a company or partnership. See compulsory winding up above.