Ian is an expert in the Debt Arrangement Scheme and Business Debt Arrangement Scheme, assisting individuals, sole traders and partnerships.
He also advises on personal debt solutions recommending the best option to resolve problem debt issues.
Insolvency Acronyms Explained
Why Business Loves Acronyms – And Why Insolvency Uses Them Carefully
Acronyms are part of everyday business life. They save time, tidy up emails, and stop meetings from running even longer than they already do. Most of us are perfectly comfortable talking about VAT, PAYE, HR or KPIs without thinking twice about what the letters actually stand for.
They work because they simplify things. Long explanations are compressed into something familiar and manageable, and in most areas of business that’s exactly what they’re meant to do.
In insolvency, though, those abbreviations come with more significance. They’re not just labels for convenience; they describe legal routes that can shape someone’s financial future. Taking a moment to understand them is important.
Below is a guide to some of the most common ones.
Personal Insolvency
DAS – Debt Arrangement Scheme
The Debt Arrangement Scheme (DAS) provides a structured solution. It allows you to repay your debts over an extended period. The key benefits? It freezes interest and charges and protects your assets while you work towards clearing your debt. This approach is ideal for those who can manage regular payments and wish to avoid any more drastic measures.
PTD – Protected Trust Deed
A Protected Trust Deed is a formal agreement between you and your creditors. It usually spans four years, during which you pay back an affordable amount. There's an element of debt relief involved, though it's important to note that your assets may be at risk, and it is formal insolvency. This option suits those who can commit to at least four years of contributions and can afford to make regular contributions.
SEQ – Sequestration
Sequestration, as Bankruptcy is called in Scotland, is often seen as a last resort. It involves transferring your assets to a Trustee, who then uses them to pay off your creditors as much as possible. If you're able to, you will be expected to make contributions for four years. This option is for those facing severe financial difficulties and who have exhausted other avenues.
MAP – Minimal Asset Process
A simplified form of bankruptcy for people on low income with very few assets. It’s quicker, cheaper, and intended for those with no realistic way to repay their debts.
AiB – Accountant in Bankruptcy
Refers to a person and the government body they lead. The Accountant in Bankruptcy oversees personal insolvency in Scotland, including bankruptcies, PTDs and the Debt Arrangement Scheme. They set the rules and keep everything running properly behind the scenes.
Corporate Insolvency
MVL – Members’ Voluntary Liquidation
MVL’s are suitable for a solvent company choosing to close in an orderly way. All debts are paid, and any remaining funds go to shareholders. Often used for retirement or planned exits.
CVL – Creditors’ Voluntary Liquidation
Liquidation is used where an insolvent company can no longer pay its debts as they fall due. The directors voluntarily choose to bring the business to an end, by winding up the company. Trading stops, assets are sold, and the proceeds are shared among creditors.
CVA – Company Voluntary Arrangement
A potential rescue option. The company continues trading while repaying part of what it owes over time, with creditor approval. It can work well, but only where the business is still viable and the creditors agree.
TUPE – Transfer of Undertakings (Protection of Employments) Regs 2006
Where employees are transferred from one business to a new business following the sale of the original employer, all their rights transfer with them to the new employer.
DLA – Directors Loan Account
The balance of monies owed to the company’s director by the Limited Company.
ODLA- Overdrawn Directors Loan Account
The balance of money owed to the Limited company by the director.
RPS – Redundancy Payments Service
The government body who deals with processing redundancy claims in insolvency situations.
IP – Insolvency Practitioner
An insolvency practitioner is a licensed professional who helps people or businesses that can’t pay their debts by managing formal insolvency processes and ensuring assets and funds are dealt with fairly under the law.
And finally, HMRC – His Majesty’s Revenue and Customs. Not an insolvency process, but almost always involved, as tax liabilities tend to surface when finances are under pressure.
Acronyms will always have a place in business. In insolvency, they still help shorten conversations – but they also represent decisions that can have lasting effects. Understanding what those letters mean can make the difference between uncertainty and a clear, workable plan.
If you're feeling overwhelmed by problem debt, reach out to our team of specialist debt advisers. We also offer free, confidential, compassionate guidance to help you explore your options and find the right solution. Email advice@tcdebtsolutions.com or call 0800 046 3328.
About the author
Ian Brown