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What Happens if a Person Claims Insolvency and Does Not Have the Assets to Clear?
It’s hard enough coming to terms with the fact that, as a company, you are struggling with debts and have been classified as insolvent. Usually a Creditors Voluntary Liquidation (CVL) is the right option and if the company has assets it can sell, i.e. machinery, equipment or even premises, they can be sold to pay […]
June 9, 2021
What Happens to the Share Stock When a Company Is Going Into Liquidation?
There’s a reason why people say investing in a company’s share stock is risky and that’s because you may never know when that company could face insolvency, and thereby company liquidation. This is the risk point – as a shareholder, you stand to lose every penny of your investment if the company goes into liquidation. […]
June 2, 2021
What’s the Difference Between a Debt Consolidation Loan and Debt Counselling Services?
Debt consolidation and debt counselling – these two terms can often be misunderstood. In reality, they are different. Debt consolidation is a physical solution to a debt problem, often in the form of a loan. Debt counselling, on the other hand, is a service for individuals, partnerships and businesses struggling with debt and not sure […]
May 26, 2021
Which creditor is exposed to the highest level of risk when lending to a company?
When a creditor lends money to a company, it is taking a risk. Whether the creditor is a bank or other lending institution, a credit card or mortgage provider, bond purchasers or utility companies, or an individual, director or shareholder, lending money is a risky course of action, particularly if the debtor defaults on payments. […]
May 5, 2021
When a privately-held company has no funds legally available to pay a mandatory redemption, do the preferred holders become creditors of the company?
Insolvency for any company is a stressful period. When a private limited company enters into an insolvency situation, the directors are not only responsible to the creditors of the company. They are also responsible to the shareholders. When there are no funds to pay the preferred shareholders when their shares are redeemed, they become creditors […]
April 28, 2021
What is the difference between insolvency and bankruptcy? How do these affect creditors and shareholders of a company?
Insolvency and bankruptcy – it’s confusing to know which applies to your business. Whilst the two are similar, they are also very different and don’t mean the same thing. Insolvency is when a company or an individual can’t pay their debts on time. Bankruptcy is the legal process that follows when an individual has been […]
April 21, 2021
Is it possible not to pay back your debts by hiding your money from creditors?
Not paying back your debts is not an advisable course of action. However, if you decide to go down this route, it’s best to know where you stand and what your legal rights are. Most of the time, your debts will be chased down by a debt collection agency but sometimes, it is the creditor […]
April 14, 2021
Can creditors come after my business for personal debts?
If you’re experiencing debt problems on an individual basis, and you have your own business, you may have been threatened by creditors that they can target your business for personal debts. In some circumstances, creditors can make a claim against your business to recover their debt. However, if you have a limited company, it is […]
April 5, 2021
Why should I choose an insolvency practitioner instead of … Making direct arrangements with creditors?
Being in a position where you’re unable to pay your company’s creditors is extremely stressful. In an attempt to avoid increasing the level of debt, many companies try to negotiate directly with their creditors and agree to an informal arrangement. If the debt is quite small and owed to one creditor, and the creditor is […]
March 17, 2021
When a limited company in the UK goes bankrupt … Do the creditors receive any money or do they lose out?
It’s a worrying time for creditors when a limited company goes bankrupt or enters an insolvency process. The biggest concern, particularly for the smaller unsecured creditors, is whether they will ever receive the outstanding debt owed to them. There is a predetermined order in which creditors are paid during the bankruptcy or insolvency process, according […]
March 12, 2021
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