Is 2010 likely to repeat 2009 for the retail sector?

There is a significant amount of evidence that the retail sector of the UK economy will suffer in much the same way as it did in 2009 over the forthcoming months. R3 the Professional Association of Insolvency and Turnaround specialists reported on 30 November that "Retailers should prepare for New Year bloodbath" based upon opinion from within their ranks see https://www.r3.org.uk/newsandpress/default.asp?page=1&i=4&id=330#PressStory.

However, news on the high street is that retailers have seen a much better christmas than was expected. Is that the case?

Good news of itself may mean much for the wider economy but creditors may see this as an opportunity to push for receovery through formal proceedings on the basis that post christmas the debtor is in the best position it is likely to be in for some time. The financial status of the debtor can only deteriorate as the market hardens for reasons such as: -

1. continuing rise in unemployment that leads to lower confidence meaning less spending on the high street;
2. where expenditure over the Christmas period being higher than epxected what available cash there will be to spend will be diminshed.

All of the above opinion applies to the supply chain to retailers. the example of which is the collapse of Woolworths. The failure of Woolworth's had ramifications beyond those directly involved in the business and estimates suggest that there were a significant number of knock-on insolvencies as a result.

With all of this in mind there is no better time than now to get some advice is the financial situation seems parlous. Failure to do so may limit the options available to you, your business or company as creditors become even more agressive in their approcah to recovery.

Change in the Debt Recovery Procedure

With effect from 6 April 2009 the process at the commencement of debt recovery proceedings is to change. Along with some clarity on the content of the letter, where recovery is for a company or business from an individual further required contents are necessary. In particular the letter should advise the individual debtor of the possibility of free advice in respect of the debt.

National Debtline
Tricorn House
51-53 Hagley Road
Edgbaston Birmingham B16 8TP
FREEPHONE 0808 808 4000
www.nationaldebtline.co.uk

Consumer Credit Counselling Service (CCCS)
FREEPHONE 0800 138 1111
www.cccs.co.uk

Citizens Advice
Check your local Yellow Pages or Thomson local directory for address and telephone numbers
www.citizensadvice.org.uk

Community Legal
0845 345 4345
www.clsdirect.org.uk
Advice (formerly Community Legal Services Direct)


You should allow a reasonable period of time of up to 14 days for the debtor to obtain debt advice. However you need not allow the debtor time to seek debt advice if the claimant knows that

(1) the debtor has already received relevant debt advice and the defendant's circumstances have not significantly changed; or

(2) the debtor has previously asked for time to seek debt advice but has not done so.