Debtor Tracing and Ledger Reconstruction

Not automatically, but it changes what has to happen first. A company whose name has been struck off the register is dissolved, and proceedings against a dissolved company face the obvious problem that there is no longer a legal person to proceed against. There is a restoration route, and a creditor is among those who can apply to have a company restored to the register within the prescribed period, after which the claim can be pursued in the ordinary way. Whether it is worth it is a commercial question: restoration takes time and costs money, and it is only sensible where the amount justifies it and where there is reason to think the company or its assets are worth pursuing once restored. We will tell you which of those you are looking at.

A great deal, and we work only from public and lawfully available records. The corporate registry gives current status, name history, registered office, directors, charges and filings. Insolvency and tribunal records show whether a process is on foot. Public filings show whether a company is still trading and, in broad terms, what shape it is in. Directorship records often locate the people when the entity itself is a shell. What we do not do is anything requiring access to information that is not lawfully available to us, and a tracing service that offers to obtain a debtor's bank balances or call records is offering something you should not accept.

Usually not, because the record is wider than your accounting system. Purchase orders and correspondence often survive in email long after the paper is gone. Delivery is frequently provable from transport documents or from the debtor's own tax filings, since a buyer who took input credit on your invoice has told the tax authority it received your goods. Bank credits establish a pattern of payment on the same account. Ledger confirmations signed in an audit may amount to acknowledgements that restarted limitation. The exercise is worth doing precisely because what can be proved is usually more than what is in the ledger, and occasionally a great deal less, which is also worth knowing before you spend anything.

This is the most common and least discussed problem in Indian recovery, and it is why we would rather do this work before a decree than after. The routes worth examining are whether the judgment debtor has assets that were never looked for, whether the business was transferred to another entity in a way that carried the liability with it, whether there is a guarantor who was never pursued, and whether the debtor is a corporate entity against which the insolvency route is now available on an admitted debt. Each of those is a tracing question first. Sometimes the honest answer is that there is nothing there, and knowing that is worth something too, because it ends the spending.

Four things, and in this order. Limitation, because a portfolio full of time barred accounts is worth very little regardless of face value. Documentation, because accounts that cannot be proved cannot be enforced, and face value is not a measure of provability. The status of each debtor entity, because struck off, dissolved and already insolvent debtors are frequently sitting inside portfolios at full face value. And concentration, because a portfolio whose value is really three large accounts is a very different risk from one spread across three hundred. We do this diligence on a sample or in full depending on the size, and report on what the portfolio actually contains rather than what the schedule says.