Understanding Debt Consolidation
Managing multiple debts can be overwhelming, but consolidating them into a single, more manageable payment may offer relief. Debt consolidation involves combining several debts into one, potentially with a lower interest rate or more favourable terms. This strategy can simplify your finances and reduce monthly payments, but it\’s essential to understand the available options and […]
What Happens if an Insolvent Company Owes Money to a Director?
It’s not uncommon for directors to lend funds to their own companies, often in the form of director’s loans. These loans provide essential financial support during startup phases or tough financial periods. However, when the company becomes insolvent, directors may face challenges in recouping their money. Here’s what happens when an insolvent company owes a […]
Understanding Personal Guarantees: What Business Owners Need to Know
A personal guarantee is a legal commitment where a company director agrees to repay a business loan or debt if the company itself cannot. This arrangement helps businesses access credit or financing by providing added security to lenders. However, personal guarantees can put personal assets at risk if a company struggles financially, making it essential […]
Understanding Insolvency for a Company Limited by Guarantee
If you\’re unclear about what a company limited by guarantee (CLG) is, or what occurs if it becomes insolvent, this article will clarify these points. A CLG differs from a company limited by shares, where shareholder liability is limited to their capital investment. Governed by the UK\’s Companies Act 2006, CLGs include entities such as […]
Understanding a Scheme of Arrangement: A Comprehensive Guide
If your company is considering restructuring its debt while continuing to trade, you may find a scheme of arrangement to be a suitable option. This process is distinct from a company voluntary arrangement (CVA) and is governed by different legislation. It also stands apart from other debt resolution methods such as a creditors\’ voluntary liquidation […]
A Guide to Business Recovery Options For Insolvent Businesses
If your company is facing financial difficulties, it\’s crucial to have a clear understanding of the various business recovery options available. Should your business require urgent support, it is advisable to contact experienced insolvency practitioners without delay. In 2023, the total number of company insolvencies reached 25,158, the highest since 1993 and a 14% increase […]
UK Businesses Under Severe Financial Pressure Amid Economic Headwinds
In the closing months of 2023, a staggering 47,000 UK companies found themselves teetering on the edge of insolvency, with a 25% surge in businesses grappling with \”critical\” financial issues, a recent study reveals. This worrying trend marks the second quarter in a row where critical financial distress has amplified by a quarter, according to […]
Reflecting on Debt and Insolvency in the UK: A 2023 Overview
Introduction The past year has been pivotal for the landscape of debt and insolvency in the UK. With the economy still rebounding from the effects of the pandemic and adjusting to new global challenges, 2023 witnessed significant developments in these areas. This article provides a comprehensive review of the trends, changes, and implications in the […]
Scheme of Arrangement
A Scheme of Arrangement can be a lifeline for companies aiming to restructure debt whilst maintaining their trading activities. It\’s an alternative to a Company Voluntary Arrangement (CVA) and different from other debt solutions like a Creditors’ Voluntary Liquidation (CVL) or administration. A Scheme of Arrangement is a court-approved process under the Companies Act 2006, […]
Dissolving a company with debts
Dissolving a company with outstanding debts is a topic often surrounded by confusion and concern. The formal process of closing a company, known as dissolution, involves removing the company from the Companies House register, either through a strike-off application or post-liquidation or administration. Legal Obligations to Creditors It\’s important to understand that creditors must be […]