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Is your company struggling with business debt?

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  • Time To Pay Arrangement
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  • Dealing With Creditors
  • Restructure / Debt Consolidation
  • Exit Strategy / Closing Company

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Company debt

If you’re suffering from business or company debt, there are solutions to help alleviate the issue and get you or the company back on track. Recovery may involve negotiating with creditors or restructuring the company through administration. If the debt has reached such a level that the company needs to close, there are options to offer a smooth shutting down rather than being forced into compulsory liquidation.

How can we help with company debt?

We are a firm of licensed insolvency practitioners (IP) with years of experience resolving company debt issues for firms of all sizes. We can work with you to fully understand your company’s current situation and guide you through the available options. A thorough analysis will take place to establish whether it’s possible to rescue the company, or if it needs to close.

Our IPs are fully qualified to carry out a range of recovery and insolvency procedures, meaning you will be guided from start to finish, and expert advice will always be on hand.

Do you want to continue the business?

If your business is insolvent, but the core of the business is viable, it may be possible to save the company and allow the business to continue operating. In these cases, the following arrangements would be suitable.

Company Voluntary Arrangements (CVA)

Company Voluntary Arrangements (CVA) could be a viable rescue device for directors who feel that a company has a future and are prepared to work hard to save it. A CVA involves a company making contribution payments to an IP over a set period, based on what the company can afford. The IP then distributes this money to creditors on a pro-rata basis. After payment of the final distribution; the company is discharged from the CVA. The company can then carry on trading unencumbered from its previous liabilities.

A CVA is an effective way to continue trading while the debt is repaid in a manageable way.

Read more about Company Voluntary Arrangements (CVA).

Administration

If your company debt has gotten out of control and your business could collapse under creditor pressure, administration is a powerful tool that can help get the situation under control. Administration will stop all pending creditor action and prevent them from taking further steps to reclaim their monies. It will also allow us to thoroughly analyse your company’s financial situation and propose the ideal rescue or recovery solution.

Read more about Company Administration.

Re-Financing and Re-Structuring

In some instances, it may be appropriate to reduce company debt through the introduction of capital or investment. There are a variety of ways in which we may seek to do this, and the options available depend on the individual circumstances surrounding a company. However, options such as asset-based lending, invoice financing, sourcing investment, financial restructuring and consolidation through loans will all be considered.

We offer a fast and efficient service with nationwide coverage from a network of regional offices, meaning a free consultation can be arranged at a time and location that suits you.

If you’re the director of a company encumbered with debt, get in touch today to arrange a free, confidential consultation with no obligation.

View our other site on refinancing and funding options.

Company Debt

Do you want to close the company?

In some cases, the company’s debt can be so extensive that it isn’t possible for the business to continue trading, or you simply don’t want to carry on and want to put the company to bed.

Creditors Voluntary Liquidation (CVL)

If your company debt has reached levels where the chances of recovery are slim, a Creditors Voluntary Liquidation (CVL) could be the ideal way to prevent further losses to creditors. It can also help reduce the possibility of Wrongful Trading action being brought against directors. A CVL will mean the end of a company and its debt, but not necessarily the demise of a business.

Read more about Creditors Voluntary Liquidations (CVL).

Do you want to restart the company?

In some instances, the core business may be viable but would be better operating in a new company, separate from the old company and free from its liabilities to its creditors.

Pre-Pack Administration

Pre-Pack Administration involves selling off an insolvent company’s assets and business to a new limited company (newco) and allowing the business to continue trading free from the debts of the old company (oldco). Staff, works in progress and other aspects of the company could be carried over, though this will depend on the individual circumstances. Pre-Pack Administration is normally only allowed if it’s deemed in the creditors’ best interests.

Read more about Pre-Pack Administration.

Debt to HMRC

If you fall behind on repaying Corporation Tax, Pay As You Earn (PAYE), National Insurance (NI) or Value Added Tax (VAT), we can offer solutions to allow your company to repay its obligations to the tax office.

Time to Pay Arrangements (TTP)

For a company struggling with HM Revenue & Customs (HMRC) arrears, a Time to Pay Arrangement (TTP) could be the answer. These allow you to make repayments in instalments over a short period rather than all at once. Doing so will free up cash flow for the day to day running of a business and allow the company to continue trading. HMRC are most likely to accept a TTP if they feel confident that the arrangement will be correctly managed, the repayments honoured and that the debt has arisen as a result of a short-term problem, not an inherent problem with the Company’s solvency.

We have a wealth of experience dealing with the tax office and have developed strong working relationships. We can approach HMRC on a company’s behalf to negotiate a structured repayment plan. If HMRC refuses to accept the proposal, your company’s current situation can be re-investigated, and an alternative solution will be sourced.

Read more about Time to Pay Arrangements (TTP).

We have a team of fully licensed Insolvency Practitioners offering regulated advice with no obligation.

Other considerations

When dealing with company debt, you may find yourself asking other questions. You might be concerned whether you’ll be personally affected by the debt, or whether bailiffs will come knocking at your door to repossess assets to pay off the amount owed.

Personal debt

If you’re the director of a limited company, the limited liability that the company provides will normally keep its debt separate from your personal finances, unless you’ve signed personal guarantees. The same is true if you have personal debt; the company shouldn’t be affected by your personal outgoings unless you’ve borrowed from the company and have an overdrawn director’s loan account, which needs to be paid back within nine months.

Read more about Personal Debt & Sole Trader Debt.

Worried about bailiffs?

A common concern for those suffering from both personal and company debt is whether bailiffs will turn up at your premises or residence to repossess your assets to recover the debt. What powers bailiffs have and what they can do if they are sent on your creditors’ behalf is dependent on the type of debt you owe and who to.

Read more about bailiffs, the powers they have, what they can take, and your rights against them.

In summary

If you’re suffering from company debt, there are several options to pay back your creditors and help the company recover. These options range from restructuring via administration, refinancing, proposing a Company Voluntary Arrangement or a Time to Pay Arrangement. Alternatively, if there is little to no chance of rescuing the company, it can be closed down through Creditors Voluntary Liquidation to avoid accusations of wrongful trading.

How we can help

At Wilson Field, we offer free, impartial advice with no obligation. Our consultants have many years of experience in dealing with companies and businesses of any size, and our team of licensed insolvency practitioners can help you reach the best outcome for you and your company. If company debt is pushing your business into insolvency, contact us today.

Authored by Lisa Hogg

Lisa Hogg

Director & Licensed Insolvency Practitioner

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