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Aggressive Creditors & Liabilities: Rethink & Refinance
Under the provisions of the Insolvency Act 1986, a company and its Directors need to be careful when continuing to trade knowing the company is insolvent.
In basic terms, once realising a company is insolvent, Directors are deemed to be personally liable for increasing debts from the point that the insolvent position is apparent – either from one’s own realisation or when receiving advice.
As ever with Corporate and especially Insolvency Law, there are massive complications, differing perspectives, and options open to Directors. The undoubted keys are to take action coupled with the correct practical advice from professionals who know what they talking about.
Our phrase above is highlighted because if any company is struggling it needs to use the sentence above as a mantra to ensure ‘all bases are covered’.
To add more detail here we would add:
1. Take action. As with any issue in business life, you have to take on the issues, whatever form they take. Insolvency is an unpalatable issue but if you know the true facts. The worst case is not always as bad as you think.
2. Correct Practical Advice. There are far too many experts in the world – fact. Professionals very often speak beyond their brief. Insolvency dare I say it is an art form., there are the usual basics but every case is different. Armed with the best practical advice, it is then for the Directors to plan the best route for the company, the creditors and then themselves.
The Right Route
Having decided the route forward it then all about implementation be it with an Insolvency Practitioner or any other relevant professional.
Armed with the knowledge and the strategy forward then Directors can see the way forward because up to that point of realisation, “it’s usually heads down battling on all fronts”. I would not be so patronising to say it can be a point of relief, but when someone is forced into difficult position things do become clearer.
Having helped hundreds of businesses through this mire, we would remind we are not Insolvency Practitioners. Instead, we are Debt Strategists and look at the whole perspective of insolvent companies including, the liquidation itself, personal guarantees, DDU’s, potential company asset repurchase etc.
The pressures and stress involved in a failing company are immense. Talk to someone (hopefully us!) as it vital work out the best route to take. Also, view our Insolvency Advice & Business Turnaround Services for more information.
If you want a FREE consultation call Karen on 02895 217 373.
Thanks for your time.