Insolvency Processes

Business Recovery & Insolvency

Learn more about the process of insolvency

Company Liquidations
Insolvent liquidation is the process of dissolving a company and using the value of its assets to pay creditors. There are two kinds of liquidation: compulsory and voluntary.

Compulsory: If a business is unable to pay back its debts, its creditors may choose to apply for a winding up petition. If their application is successful and the debt cannot be paid before the court date, the company’s accounts may be frozen when the court issues a winding up order and any assets are liquidated.

Voluntary: Creditor’s voluntary liquidation is when a director and shareholders agree that a company cannot afford to pay back its debts and should move to wind up the business. After this resolution, an appointed liquidator will take control of the company and oversee the liquidation process.

Solvent Liquidation (MVL)
If a company is solvent, but wishes, for whatever reason, to cease trading and liquidate its assets, a Members’ Voluntary Liquidation is the most appropriate path to take.

Once a declaration has been made and an insolvency practitioner has been appointed as liquidator, they will take control of winding up the company as quickly and cost-effectively as possible.

The main benefit of an MVL, other than minimising the time and cost of closing a business, is reduced tax liabilities.

Capital gained from liquidation is taxed more favourably than dividends – by using this service you simplify the process, while maximising value.

Personal Insolvency
Bankruptcy is an option many people consider when unable to pay their debts, but it is a serious process that has a long-lasting effect on your financial affairs and your ability to secure credit.

Alternatives to bankruptcy include debt management plans that allow you to agree an affordable repayment schedule, a debt relief order (DRO) if you owe less than £15,000, and an individual voluntary arrangement (IVA). An IVA involves negotiations with creditors to pay back some or all of your debts over an agreed period of time.

Administration
When entering administration, control of the company will be placed in the hands of an appointed insolvency practitioner who will make decisions that are in the best interests of all stakeholders. They will attempt to find a solution to the company’s debt problems or find a buyer for the business.

Administration is a powerful procedure and is typically taken when pressure from creditors is too great for a business to run properly. It does, however, provide protection against legal action, halt the deterioration of the company’s finances, and doesn’t have to be a lengthy or expensive process.

In most cases the outcome of administration will either be a CVA (Company Voluntary Arrangement), which sees the company return to solvency having negotiated with creditors or the sale of the company and its assets. The most efficient method of sale being a pre-pack administration.

Pre-Pack Administration
A pre-pack administration involves agreeing the sale of an insolvent company’s assets before entering administration. Not only does this save time, but also reduces the stresses put on a business by a lengthy administrative process.

The process may involve selling the assets to current owners or finding a third party who is willing to buy the business, depending on what is the most appropriate course of action.

A pre-pack not only minimises the damage done to the goodwill or reputation of the business by restructuring as quickly and smoothly as possible, but also provides the best chance of saving jobs and rescuing a business that has the potential to succeed.

Company Voluntary Arrangement
Sometimes the pressure of debt and being chased by creditors can lead to an otherwise viable business being unable to survive.

Usually the best result for all parties is for a company to keep trading and find a way to turn the business around. This avoids the difficulties that come with liquidation or administration and avoids the loss of jobs and equity.

A CVA allows you to retain control of the company and gives you the breathing room necessary to concentrate on restructuring or refinancing the business in order to get things back on track.

With the agreement of creditors, a deal can be reached that allows a company to pay back some or all of its debts over a certain period of time without the stress of legal threats or more serious insolvency procedures.

For more information, or if you have further questions about any of these insolvency processes, please do not hesitate to contact us.

Who we are

  • Insolvency specialists
  • Finance Experts
  • Credit Insurance
  • Debt Services
Contact us Teamwork graphic

Speak to an expert

Concerned about your company? Call Simon Lowes, Insolvency Specialist, or fill out the form below for a callback.

Thank you for contacting us, we will be in touch soon.
CreditMan | Simon Lowes

Other services

Our Services Icon 3

Credit Insurance

Financial protection is usually top of the agenda for the majority of business owners. Credit Insurance transfers the risk away from a business to the credit insurer, protecting the policyholder.

Our Services Icon 4

Debt

Our carefully selected partners can assist with debt recovery and collection in UK and overseas. They are also able to assist with enforcement issues and tracing missing debtors on your behalf.

Our Services Icon 2

Finance

No longer are businesses reliant upon bank lending alone. They now have the flexibility to go out and source finance from various offerings taking in to account what is right for their business and its needs.

Free company review and strategy plan

Concerned about your company? Contact us for your full FREE review of their financial position and strategy plan.

Contact us

CreditMan Daily Newsletter

The latest notices to your inbox

Subscribing to CreditMan guarantees that you can stay up to date with insolvency notices, news, articles and events relating to your industry.

  • Daily business recovery & insolvency notices
  • Relevant business news and expert commentary
  • Events and training to improve your network and skills
Sign-up today
Daily newsletter preview image
  Creditman Approved Services

Solutions
Based Business Finance

  • UK's leading business funders
  • Free Brokerage Service
  • Full Market Access

Corporate Insolvency Support for UK Businesses

  • 35 Years Experience
  • 100+ UK Offices
  • Confidential Director Support
  • Insolvency Market Leader

Struggling to get your invoices paid

 

Contact us for a Free Consultation Today!

Business Debt Recovery planning image

This site uses cookies to monitor site performance and provide a more responsive and personalised experience. You must agree to our use of certain cookies. For more information on how we use and manage cookies please read our PRIVACY POLICY