Even the best managed companies sometimes hit a rocky patch where mounting debts can no longer be paid through cashflow or normal financing. This is commonplace and no cause for embarrassment. Many would say that it is simply a part of doing business.
Nevertheless, it can lead to extreme stress and feelings of helplessness with no obvious way out in sight. This is where the services of an experienced insolvency practitioner are invaluable. There are indeed a number of options that are used by companies up and down the country every week to ease pressures and resolve stresses.
What Can An Insolvency Practitioner Do For Me?
Acting as a buffer between you and your creditors, HMRC or the courts, we immediately take the pressure from these sources off your shoulders. Clients have told us that this alone has provided them with their first good night’s sleep for some time.
We are specialists in steering a course through the rocky waters of company rescue. Not all businesses can be brought to full recovery but having expertise on your side helping to deal with courts and creditors ensures the best possible outcome for all parties.
What Options Are Available To Me To Meet My Debts And Liabilities?
The legal framework surrounding companies in difficulty provides several effective paths. Your insolvency practitioner will assess the status of your business and your liabilities and will recommend the best course of action. Usually it will be one of these, but the final decision is down to the directors:
This may be the preferred option where the business is thought to be viable but faced with mounting debts that cannot be easily paid. There are several options here including dipping into the alternative finance market as opposed to the mainstream banks and finance providers. Read more here.
CVA (Company Voluntary Arrangement)
This is an agreement reached with creditors to make agreed payments from profits for a period of time. Directors remain in office and in control and no personal guarantees are required. A CVA has proven to be a very valuable mechanism for many businesses.
This is a well defined process to execute a restructuring plan while protecting the company from its creditors at the same time. The main objective is to rescue the company as a going concern. This can be achieved through some internal restructuring or finding new owners to take it forward.
The business is about to enter Administration but is pre-packaged through an agreed arrangement and sold soon after entering Administration either to the current management or to a third party, which enables a seamless transition without interrupting the operation.
It may be that the company cannot be recovered, despite the best efforts of the directors. This is a common occurrence and the process of liquidation is well established. The objective is to extract maximum value from the assets of the business so as to repay as much as possible to the creditors. There are two possible approaches (creditors’ voluntary liquidation and compulsory liquidation) to be considered.
Your Next Steps
There comes a point where directors may be under tremendous stress and floundering about how to resolve their debt problems. It makes sense to engage the experts who can take that weight off your shoulders and find the best way forward. Contact us today for a confidential and free professional consultation, which can be at a location of your choosing.