Informal Services to Avoid Admin or CVL
One important piece of knowledge that I carry with me everyday is always to remember that the last thing that a business owner or company director wants, if in debt, is to place their company into Administration or Liquidation. Their primary aim is always to pay back their company debts in full and avoid insolvency. Like me, I’m sure you will find that when dealing with your own company it is often difficult to make decisions that are free of emotional attachment to the business you have worked so hard for. Unfortunately, in an insolvency situation this can lead to business owners and company directors worsening their own personal financial position by putting more of their own money into the company or by taking on personal finance or personal guarantees in order to support their cash flow and continue trading their companies at all costs when in reality they know that it is not the right thing to do. As Licensed Insolvency Practitioners we do of course still deal with many formal insolvencies (such as Liquidation & Administration) throughout the UK however when setting up my company, I made a conscious decision to ensure that, wherever possible, we do all that is necessary avoid insolvency and to promote business recovery. However, you should be aware that there are many other solutions out there for you that do not involve taking on further risk or paying back far more in interest fees and charges. These are briefly explained below:-
Negotiations With Your Creditors
Repayment Plans – This is of course where we write to your creditors in order to negotiate more time for you to pay back your debts. Now you may be thinking “I can do this myself” or “I have tried this and got nowhere”. Well it should be noted that the chances of reaching a successful agreement are far improved if an Insolvency Practitioner is doing the negotiations as the creditor is aware that the debtor has reached the point where they have had to take insolvency advice and the result of not reaching an agreement would definitely be an insolvency process where the creditor risks not receiving any of their money back. It should also be noted that due to our regular dealings with HMRC and Banks, we have a number of contacts in their recovery or enforcement departments who know that if we propose a repayment plan then it is the right solution.
Reduced Settlements – This is where we negotiate with one or a number of your creditors informally in order to get the debt with them reduced. This is most widely done with single creditors such as Banks and Financiers as quite often these debts are the largest and therefore left until last. On many occasions, the majority of the outstanding debt to this type of creditor relates to interest upon interest and therefore agreements are regularly reached which significantly reduce the final balance to pay (providing you are in a position to offer some form of settlement proposal). At the very least, this negotiation can help to ensure that interest is stopped and the terms allowing the creditor to charge what they have charged, are allowed to be charged, which regularly results in charges or interest being written off. It should however be noted that if all creditors are contacted to reach an agreement then 100% of them must agree for you to be safe from legal action however this is by no means guaranteed.
For more information on these services click on this link to visit our INFORMAL OPTIONS PAGE.
I am sure that you are aware that invoice finance relates to when finance is provided on debts due to a Company in advance of them being due and collected. However, what you may not know is who the best financier is for high risk debts such as contract debts or foreign debts, that you can obtain finance on whole ledgers or single debtors (or even on future credit card sales) or even which financier currently offers the best rates or supplies their finance the quickest. I am pleased to say that these are all questions which we know the answers to due to our vast experience in sourcing invoice finance for clients. It is this experience which has lead us to set up a number of successful working relationships with brokers and financiers to ensure that the best deals are quickly within your reach.
For more information on this service click on this link to visit our INVOICE FINANCE PAGE or contact us on 01788 544 544.
Why Not Try a CVA?
A Company Voluntary Arrangement (“CVA”) is a formal contract with the insolvent company’s creditors to pay back their debts in accordance with the terms of the contract. This can be a repayment over 5 years or less and can be to repay as little as 25% of the total debt (but we rarely recommend proposing a CVA unless it proposes full payment to creditors). Therefore, if all you need is time to pay your creditors then it is worthwhile considering a CVA as a means of formally avoiding Liquidation or Administration.
For more information on this service click on this link for our CVA PAGE.