Every business experiences cashflow challenges at some point in its lifecycle. It is not always easy to recognise when help is needed, or to acknowledge that you have lost control of the situation. It is important to remember though that there are steps you can take, and generally, the earlier you seek help, the more options are likely to be available to you.
The sections below highlight some of the many ways in which our debt & insolvency specialists can help businesses experiencing financial problems.
If you are struggling to find a way of paying your creditors, the spiral of debt may seem inescapable. All is not necessarily lost; administration could be an option for you. It is a way of rescuing your business through the appointment of an administrator who restructures your business in order to pay its debts. Crucially, it releases much of the pressure placed on you by your creditors. Our debt & insolvency lawyers will guide you through the process, advising on your rights and your responsibilities.
When your bank or your creditors have decided that they have waited long enough for their money, they can apply for the appointment of a receiver whose job it is to take over the management of your business. The receiver’s aim is to make enough money to pay some of your liabilities, including the sums owed to those who initiated the receivership. This process does not necessarily spell the end of your company and liquidation does not have to be the next step. Talk to our debt & insolvency team about achieving the best possible outcome.
If your business is unable to pay its debts then your shareholders, or a creditor, can put the company into liquidation, which means that it is brought to an end. A liquidator is appointed to realise any assets in order to pay liabilities. You may be forced into liquidation by a creditor, but there are circumstances in which voluntary liquidation is a sensible step to take (to avoid wrongful trading, for example). Our debt & insolvency specialists could help protect your position, whatever stage your debt problems have reached.
Company Voluntary Arrangements
When creditors are putting you and your business under pressure, you may feel that negotiation is impossible. However, a company voluntary arrangement is a process of compromise which could allow you to pay your unsecured creditors an agreed amount with the remainder of your debt being written off. Talk to a debt & insolvency lawyer about whether a company voluntary arrangement could be an option for you.
Individual Voluntary Arrangements
If you are unable to pay all of your personal debts, but could afford to pay some, an individual voluntary arrangement could be right for you. Our debt & insolvency team could help you negotiate payments to your creditors, releasing you from liability to pay any more and stalling or eliminating the risk of bankruptcy.
If you are struggling to pay personal, as opposed to business, debts then bankruptcy could be imminent. The process can be started by a creditor, or by you. Either way, it is important that you protect assets including your family’s interest in your matrimonial home. Our debt & insolvency specialists are here to advise on the right steps to take, at the right time.
Book Debt & Asset Recovery
The commercial reality is that you may be unable to pay your creditors until you have been paid money that you are owed. Our expert debt & insolvency lawyers can help you recover book debt and any assets that are due to be returned to you because of a debtor’s default on payments.
While your business or personal property may be precious, it is also a valuable asset that you could sell to satisfy your debts. The ramifications of losing your premises or your home can be serious, so talk to our commercial property lawyers about how this could work for you. If you decide to press on with the sale, or are forced into it, we can drive the legal process through while protecting your personal and professional position.
If you supply goods then your contract should say that you own those goods until they are paid for. Similarly, if you buy goods and do not pay for them, the likelihood is that they are not yours. When it comes to valuing and selling assets to pay debts, this issue can cause difficulties. Our debt & insolvency team can help establish whether or not the goods you have supplied or received belong to you, and represent you if this results in a dispute with another party.
Personal Liability & Disqualification
It is not always the case that a business’ liability cannot become attached to you individually. If you have given a personal guarantee against a company loan, for example, you should be aware that default could lead to you being responsible for the debt. However there are other cases in which directors can be personally liable, often when they have been judged to have acted improperly – wrongful or fraudulent trading, for example. Our debt & insolvency lawyers can help you limit your exposure to personal liability, advise you if things go wrong, and represent you in any directors’ disqualification proceedings.