As a director of a company experiencing financial difficulties, it can be stressful time dealing with creditors who are continually pressing for payment that you can’t afford to settle. There are numerous options available to you. Some companies require minimal debt advice to continue trading profitability. Whilst, for others, it’s a case of damage limitation if insolvency has become inevitable.
HM Revenue & Customs (HMRC) are usually the company’s largest creditor and, for many directors, it can be intimidating dealing with them. HMRC have numerous powers, including issuing a distraint notice to enter the company’s premises and take possession of company assets and, in more serious cases, petition to wind up the company following the issuing of a statutory demand for payment.
If a creditor is unable to collect a debt they may use a debt collection agency or even sell the debt to a third-party.
If the company has a loan that is secured by a legal charge over an asset or property the creditor may enforce the security by taking possession of the asset/property.
If you’ve been served with a statutory demand for a debt in excess of £5,000 and fail to comply within 21 days you are deemed insolvent for the purposes of court proceedings. This may lead to a petition being issued for the winding up of your company. In addition, if you are unable to repay a mortgage and the interest is in arrears the creditor may seek possession of your property.
Alleviating Creditor Pressure
The best way to alleviate creditor pressure is to negotiate an arrangement to give you the extra time required to settle your debts or to deal with any disputes. If you’re unable to do so we can help by putting you in touch with an Insolvency Practitioner and entering into a company voluntary arrangement (CVA). A CVA is a formal repayment proposal presented to creditors as an alternative to liquidation. There are numerous other ways to lessen creditor pressure, which we can advise you on.
We have many years’ experience in negotiating with trade creditors, HMRC and landlords. We can often delay bailiffs and postpone or stop the winding-up process. Even if further assistance is required from either a solicitor or an accountant, we can help to put you in contact with the correct professional for your needs. Therefore, if you’re experiencing creditor pressure and need help and support please contact us on 0330 159 8080 for a free no obligation consultation.