What is Insolvency?
Insolvency occurs when a company or individual’s liabilities exceed its assets. When the total amount owed cannot be raised in time to pay off debt when it’s due, a company is technically insolvent. The best way to think about insolvency is to see it as a state of being. Being insolvent is the umbrella term for all UK subcategories, and under insolvency law, there are a number of avenues available.
What is Bankruptcy?
Bankruptcy is a specific legal process when a court declares that an individual is insolvent and can no longer pay off their debts. The individual must owe a minimum of £5,000, and either upon the petition of the court or the individual’s own petition, the Court orders that the individual is bankrupt. A civil servant known as the Official Receiver is appointed to oversee their bankruptcy.
Similarities & Differences between Insolvency & Bankruptcy
Insolvency is an umbrella term, of which bankruptcy is one of the many options available under insolvency law. Bankruptcy is generally a last resort option, and certain steps can be taken to avoid this and to implement other insolvency options. Under insolvency law, the most common alternatives to bankruptcy are individual voluntary arrangements (IVAs), and debt relief orders (DROs).
Prevention over treatment
If you’re worried about becoming insolvent, the best course of action is to seek independent advice from rescue and recovery experts before it’s too late. Procedures can be put in place to ease cash flow and avoid insolvency, some of the most common being:
- Negotiating with creditors via an informal arrangement
- Sole trader voluntary arrangement
- Chasing up your debtors
- Selling assets
If you’d like help or advice, get in touch with us. We’re happy to talk to you over the phone or arrange a Skype meetup. Recognising when you’re in trouble is a key business skill and there are many ways to avoid bankruptcy.
Voluntary Liquidation Quote
How much will it cost to liquidate your business?
|Office equipment, and fitting||£0.00|
|Plant & Machinery||£0.00|
|Debtors (only include non-financed debts)||£0.00|
Liquidation is likely to crystallise any outstanding personal guarantees, so you will need to consider carefully how to deal with these prior to liquidating. There are options available that we are happy to discuss, but it is important to understand the potential effects of the guarantees prior to liquidating.
We can organise attendance at your premises to assist with staff redundancies. There is an added charge of £350 for this (already included in your quote). We find that it can really help staff move their claims forwards, and understand the procedure better. Where possible, we work with the local Job Centre so that exiting staff are aware of training opportunities and the most efficient ways of making benefit claims.
Buying assets from the liquidator
Please contact our office or book an appointment if you want to buy assets back from the liquidator. Once we have details of your assets, we can organise independent valuers to review (either on paper or by site visit, depending on the asset types), and we can then agree a fair figure for the purchase.
It may be possible to pay for the assets over a period of time, though it is likely that security would be required.