Do You Need Insolvency Help?
If you’re the director of a limited company, there can be few greater stresses than that of mounting debt, and the creditor pressure which accompanies it. If you are reading this, the chances are the situation is beginning to feel unmanageable, and you’re researching what your options are at this point.
The good news is that there are often a variety of solutions for insolvent companies needing help. There are rescue mechanisms such as payment plans or going into administration, and then closure methods such as liquidation.
We’ll explain what those are below. And remember, we offer free, confidential and immediate advice for limited company directors so feel free to reach out to us to discuss your situation in person.
How do I Go Insolvent?
Once you’ve realised that you can no longer pay your debts, or that your business liabilities outweigh assets, you need to contact an insolvency practitioner as soon as possible. The principle reason for this is that once a company is insolvent your responsibilities shift from shareholders to creditors.
As a director this puts you in a precarious position because all insolvent liquidations come with a directorial investigation. If you are discovered to have placed your own or shareholder interests before creditors after become aware of insolvency, you could be held liable for charges of wrongful trading.
Contacting a licensed insolvency practitioner at the earliest opportunity will give you access to someone who can take an impartial look at your accounts, the level of creditor pressure, and the solutions available. As our testimonials confirm, just making contact can feel like a tremendous weight lifted.
Help With a Winding up Petition
If you’ve received a winding up petition, you have an especially short window to take action if your company is to be saved. These final demand letters, most commonly sent by HMRC, give you just 7 days to pay before a judge hears your case to rule upon whether you should be compulsorily liquidated. Petitions must be formally advertised in the Gazette as part of the process, after which your bank accounts will be frozen.
This is not a letter you can ignore, do get in touch immediately to hear about options for stopping the petition.
How Much is Insolvency Going to Cost?
For directors already concerned about cashflow, it is often the case that taking action on insolvency is delayed for fear of further costs. The good news is that most liquidations are paid for from the sale of company assets, meaning no money need be found up front. Just what these costs are varies depending on the size of the company, the amount of assets which need to be liquidated, and the time spent doing so.