Creditor communications are essential. When your company has become insolvent you should look to inform the creditors as soon as possible about the situation, but how do you go about doing this?
It’s only natural that you would be concerned about how and what to say to your company’s creditors and hopefully we can shed some light on how to start in this blog.
Firstly, do not ignore any correspondence from your company’s creditors at any stage. In doing this it will cause confusion and frustration on the creditors part. If you receive a call or a letter from a creditor or someone that is acting on behalf of your company’s creditors then you should either respond with all the necessary information about your company’s situation or if you are unsure about exactly what information you would require you should contact a company that can represent you and take over communications with the creditors’. It is not possible for us to list the specific parts of information required for your company as every situation is different and what might be required for one company may be different to what is required from another.
Providing you have all the necessary information to give to the creditors then going forward it would be wise to keep them fully informed at every step, regardless of your company’s position. If things get worse you need to be honest as it will not do you any favours sticking your head in the sand and waiting until the very last moment to divulge what’s gone on.
There are many different types of creditors and they don’t all act or react in the same way. If HMRC is one of your creditors we would suggest that you get in touch as we communicate with them on a daily basis and are very well placed to give you detailed advice that fits in with your specific situation.
That being said it may be that all you require is time to sort a temporary cash-flow issue. If this is the case we would certainly recommend speaking with a professional that can assist in the step by step management of creditor communications given the sensitive nature of your situation. In order to avoid liquidation you may be able to look at a survival solution such as a company voluntary arrangement. Jameson Smith & Co can help with all of the above and if you are in any doubt you should just pick up the phone as we help UK directors every day with similar situations. Even if there is nothing that we can do to help we will always provide you with helpful advice and point you in the right direction without charging you a penny.
Written by: Mike Smith