A person can borrow money whilst subject to a freezing order - but only in certain circumstances. Our team can help advise anyone facing this complex issue when dealing with a freezing injunction situation.
Case law demonstrates that a freezing order does not prevent a respondent (the person subject to the order) from incurring new liabilities and thereby increasing his overall indebtedness, provided the action in question does not diminish or reduce the value of the frozen assets.
For example, where the respondent seeks to place security over an asset subject to the freezing order.
However, it remains a risk to an applicant that further unsecured creditors could be incurred by the respondent and in the event that the respondent is subsequently declared insolvent the increase in the value of unsecured creditors will diminish the returns for all creditors (including the applicant).
Francis Wilks & Jones is the county’s leading firm of freezing injunction solicitors. We are experts in what we do. Whatever your enquiry regarding freezing orders, we are here to help.