News and Debt Articles 2009 Archive
2009 Archive of articles about Business Debt Advice, and Personal Debt Advice for Company Directors, Sole Traders and Self-employed business people.
2009 Debt Articles
I am self employed and have a debt problem - what can I do? (23 Dec 09)When times are tough, self employed people get in to personal debt because they borrow in their own name to support their business. There are different solutions which can be used to overcome these problems.
Will debt management or an IVA affect my credit rating? (22 Dec 09)If you have debts which you are unable to repay, you may well consider undertaking a debt management plan (DMP) or individual voluntary arrangement (IVA). These two solutions are very different although their effect on your credit rating will be the same.
A company voluntary arrangement costs less than pre-pack admin (21 Dec 09)If your company is in trouble and you are looking for ways of preserving investment cash, a company voluntary arrangement could be a more affordable rescue solution than pre pack administration.
Can I declare bankruptcy and run my business? (17 Dec 09)What is the effect of Bankruptcy for Directors, Sole Traders and Employees. What other options are also available if bankrupcy would be detremental to your business.
Can I be responsible for someone else's debt? (17 Dec 09)With thousands cases of debt repayment problems coming to light each month, should other family members be worried that they will be left responsible for unpaid debts?
What happens if I receive a County Court Judgement? (16 Dec 09)not responding to and ultimately not paying a CCJ can have very serious consequences for a business. If you find yourself in this position, it is possible that your business is insolvent and you should act swiftly to agree on and implement a business rescue plan.
I have mortgage arrears - what can I do? (15 Dec 09)Approximately 10,000 homes are repossessed each quarter following mortgage arrears. This is a significant number of families who are affected by the stress and upheaval of losing the roof over their head. With a better understanding of their situation and the remedies available, this number could be significantly reduced.
What happens if I get a Winding Up Petition? (14 Dec 09)Winding up petitions are being increasingly used as an aid to business debt collection because of the serious consequences for a company if they are ignored. If you receive a winding up petition it is vital to act quickly or risk losing your business. We give some options you can take.
Can I use a debt relief order? (11 Dec 09)Debt relief orders were introduced to help people on very low incomes resolve their debt problems. There are a number of strict criteria that you have to meet before you are eligible to carry out a debt relief order. This is because the orders are aimed at helping people who are surviving on very little money each month.
When can I use Phoenixing - Pre Pack Administration (10 Dec 09)In many circumstances the phoenix (pre pack admin) process should be considered a very real option for business rescue. However we also look at some circumstances when phoenixing may not be appropriate.
Should I declare bankruptcy? (09 Dec 09)Bankruptcy is often thought of as something to be avoided at all costs. However, if you have unsecured personal debts which you cannot repay, it could the best way to solve your financial difficulties.
When should I use a Company Voluntary Arrangement (07 Dec 09)A company voluntary arrangement could be the ideal business rescue solution. If your business is failing due to debt which you are unable to pay and you are spending your time juggling creditors rather than running your company.
When should I use an Individual Voluntary Arrangement (IVA) (04 Dec 09)According to the Insolvency Service, over 4000 people use an individual voluntary arrangement each month to resolve their personal debt problems. Clearly the IVA is a very popular debt management solution but is it right for everybody?
Pre pack administration and possible problems with the HMRC (03 Dec 09)Pre-pack administration or phoenixing can be a useful rescue solution for businesses in financial trouble. However you may find taking advantage of this option might get hindered if HMRC decide they want a VAT deposit. When is this likely to occur?
When should I use a debt management plan (02 Dec 09)On the face of it, a debt management plan seems like a very good way of resolving a debt problem. However, this solution may not be right for everybody. Some points to help you decide what is right for your situation.
Bank Charges - Its either pay now or pay later (01 Dec 09)Bank charges should be both reasonable and transparent and there are many examples of situations where this has not been the case. I believe that historically, the level of some fees levied on bank customers who have used unauthorised overdraft facilities have been excessive and unacceptable.
Pre Pack Administration may not be the answer if you owe money to your company (30 Nov 09)Pre-pack administration is often an extremely good method of rescuing a struggling business, however where the director has borrowed money from the company, an alternative solution is to consider a Company Voluntary Arrangement (CVA).
My company is in trouble because a client has declared insolvency (23 Nov 09)The situation where one of your major customers has become insolvent while owing you money is all too common in today's economic climate. Here are some key operational actions you should consider:
Should you stick with a Debt Management Plan or change to IVA? (19 Nov 09)With Debt Management Plans often lasting for many years would debtors be better off considering an IVA or even bankruptcy?
An increase in bad debts will result in more winding up petitions (18 Nov 09)Debt collection strategies such as the issuing of winding up petitions are likely to be more widely used as the number of companies in financial difficulty continues to increase into 2010 and 2011.
Is Your Business in Trouble? Consider undertaking a Company Voluntary Arrangement (17 Nov 09)If your business is in trouble you may be better off undertaking a Company Voluntary Arrangement rather than struggling to raise the funds necessary for a Pre-Pack Administration
Company Voluntary Arrangement may save your Business (10 Nov 09)If it looks like you are facing insolvency, particularly where there is a large debt burden, a company voluntary arrangement (CVA) may be a good solution to rescue your business.
Using a lump sum Individual Voluntary Arrangement (IVA) to solve Self Employed and Sole Trader debt problems. (29 Oct 09)For a Director, Sole Trader or someone who is self employed, if your business has failed, you may not be in a position to maintain monthly payments into an IVA. There is an alternative lump sum IVA which may well be the right personal debt solution for you.
Threshers owner on the verge of administration
(29 Oct 09)
First Quench Retailing has hired KPMG's restructuring team and is considering a range of options including pre-pack administration and Company Voluntary Arrangement insolvency procedures, or a sale.
Top tips for dealing with creditor legal action (19 Oct 09)
If you receive a county court claim from one of your creditors your first reaction may be to bury your head and hope it goes away. However to avoid an unrealistic payment demand being issued against you, the problem should be tackled head on.
HMRC Fast track Time to Pay Scheme under threat (16 Oct 09)The government's tax and VAT Time to Pay scheme designed to help companies with their cash flow during the recession, may be more difficult to use if the business support centre is closed. Whatever the outcome of the changes, it seems likely that the number of business insolvencies will continue to increase into 2010.
Self employed and in financial difficulty - 4 options to solve your debt problems (13 Oct 09)Many sole traders and the self employed prop up their business with personal borrowing. If things go wrong, the individual is left with large personal debt which they cannot repay. What options are there available to resolve these problems?
CVAs (Company Voluntary Arrangements) become increasingly acceptable to creditors (30 Sep 09)The outdoor and leisure clothing retailer Blacks is planning to resolve its financial difficulties by agreeing a Company Voluntary Arrangement (CVA) with its creditors. Yet more evidence that creditors are starting to understand the value of CVAs for restructuring struggling companies
Resolving directors personal debt problems with Debt Management (28 Sep 09)When a company gets into financial trouble there are a number of business rescue solutions available. The problem for directors is that corporate rescue solutions do nothing to resolve any debts taken on by them personally. One answer which should be considered is a Debt Management Plan.
Resolving directors personal debt problems with an Individual Voluntary Arrangement (IVA) (24 Sep 09)When a company gets into financial trouble there are a number of business rescue solutions available. The problem for directors is that corporate rescue solutions do nothing to resolve any debts taken on by them personally. One answer which should be considered is an IVA (individual voluntary arrangement).
I have a Statutory Demand - What does this Mean? (17 Sep 09)If you have received a statutory demand, you have three weeks in which to respond to it. There are basically four options depending on your business' circumstances, which are explained in this article.
Do the benefits of Pre Packs (Phoenixing) outweigh the criticisms? (15 Sep 09)Pre Pack liquidation or Phoenixing has become the subject of much debate over the past 12 months. It is my view that these arguments against the pre pack process are fundamentally flawed.
How to do a pre pack liquidation or phoenix (14 Sep 09)You may be considering simply cutting your losses and closing your business. However the business idea and certain elements of the current business may still be viable. A pre pack liquidation (commonly known as the Phoenix process) allows a new company to be formed using the viable parts. Follow this process below.
Are still more home owners likely to default on their mortgage? (11 Sep 09)
Despite the obvious optimism surrounding the number of repossessions in the first half of 2009, there are still significant reasons for concern. Unemployment is continuing to rise and the economy still weak.
How to do a Company Voluntary Arrangement (10 Sep 09)If your company is under serious pressure, but if the historic debt was removed, the business remains viable, then a Company Voluntary Arrangement (CVA) could be the answer. There are a number of steps you need to follow.
Liquidation - how do I close my company? (09 Sep 09)If you have decided to close your company then you will need to put the business into liquidation. We describe the process you will need to follow.
Pre Pack and Phoenixing - Tips to ensure pre pack success (08 Sep 09)Undertaking a business pre pack liquidation is by no means a recipe to ensure that the new phoenix business will be a success. However, considering the areas in this article will certainly help to avoid some of the pitfalls of the pre pack process.
House Prices - Will they rise or fall in the coming months? (08 Sep 09)While commentary about improvements in the economy abound and claims that the recession is over, the question on many people's minds is have house prices also reached the bottom?
Avoid house repossession - What is the pre action protocol? (07 Sep 09)With the onset of the recession in 2008, experts predicted that the number of home repossessions would again significantly increase. In order to try and minimise the number of people who are at risk of losing their home through repossession, the government has put in place the mortgage pre-action protocol so that it is more difficult for a mortgage lender to obtain a repossession order.
Raising company finance - what is factoring and invoice discounting? (07 Sep 09)Due to the credit crunch and many banks' unwillingness to lend, businesses are struggling to raise money to finance their activities. Factoring and invoice discounting allow a company to improve its cash flow by borrowing against legitimate invoices that have been raised.
Business loans fall by record £8.4bn in July in corporate debt write-off (02 Sep 09)
Yesterday's figures suggest that despite the BoE's efforts, banks are hoarding liquidity rather than bolstering lending.
Can a landlord seize goods in lieu of rent? (02 Sep 09)Landlords do have a legal right to seize goods from a defaulting tenant in lieu of rent arrears. This process is called distrait. The question is how to protect against this.
Avoid Company Bankruptcy (Liquidation) using Business Refinancing (27 Aug 09)In the midst of an economic downturn, many companies find themselves at risk of failure because they do not have enough cash to maintain their day to day business activities. High Street banking institutions are currently extremely reluctant to lend because of the huge bad debt risks. There are other funding options which should be considered collectively known as business re-financing.
Landlords back Focus CVA (Company Voluntary Arrangement) (26 Aug 09)
A CVA in action - Creditors have approved a company voluntary arrangement (CVA) for Focus DIY, saving almost 5,000 jobs at the troubled retailer
Settling debt while in a debt management plan (27 Aug 09)
If you are in a debt management plan and would like to make a settlement offer to your creditors, what gives you the best chance of sucess?
Avoid Company Bankruptcy (Liquidation) using a Pre Pack or Phoenix (26 Aug 09)If your company is no longer financially viable in its current form, you may be looking at closing (or liquidating) the business. However, if you believe that the business idea remains a good one, you should look at a Pre Pack Liquidation or Phoenix.
Avoid Company Bankruptcy (Liquidation) using Company Voluntary Arrangement (CVA) (26 Aug 09)Before deciding to liquidate your company, it is worth considering whether there may be a possibility of saving the business. One option you can consider is a Company Voluntary Arrangement (CVA).
Business Refinancing - Is the Enterprise Finance Guarantee Working? (21 Aug 09)The Enterprise Finance Guarantee scheme (EFGS) is designed to is to boost lending to small and medium sized businesses. Has it worked?
Cash Flow - A strategy for debt recovery in the difficult recessionary times (20 Aug 09)One of the main reasons for business failure during recession is late or non payment of debts. If you are struggling to persuade your customers to pay, there are a number of actions you can take to get them to part with their cash.
Deferring company tax is covering up a ticking time bomb of insolvency (19 Aug 09)Having taken advantage of the tax deferment scheme, companies should be using this breathing space to restructure their business. In reality, companies are basing their ability to pay tax in the future on the view that the economy will improve in the short term and there will be an upturn in trading conditions.
If a customer has a Company Voluntary Arrangement (CVA), how can we collect the debt owed to us? (14 Aug 09)Unfortunately, with the difficult trading conditions in which many companies are finding themselves, the use of procedures such as company voluntary arrangements is likely to become increasingly common. This is bad news for creditors who will find themselves with unpaid accounts.
Inland Revenue debts on the increase as recession continues (13 Aug 09)Non payment of HMRC debt will ultimately put a business in significant risk. They will eventually apply for the issue of a winding up petition.
CBI study shows businesses find it easier to get credit (10 Aug 09)
Among firms seeking credit in the past three months, 27% said that availability had improved, while 10% said it had worsened
Company Liquidation does not have to be the end of the road for businesses (29 Jul 09)If a company is struggling and unable to continue trading the directors may decide to close the business by a creditors voluntary liquidation. When the liquidator looks to try and sell the assets of the company for the best price there is nothing to stop a director of the original business setting up a new company and making a bid for any or all of the assets which can then be used in a new enterprise.
Business Turnaround - Options to get your company back on firm ground (28 Jul 09)The current economic climate is proving challenging for many businesses. Many businesses will be adversely affected either directly or indirectly by the economic situation. As such, it is vital for directors to anticipate this and understand the business turnaround options available which may prevent them from losing their company all together.
I have received a Winding Up Petition - What actions can I take? (27 Jul 09)More recently, creditors have started to use winding up petitions specifically as debt collection tools. As a company director, it is very important for you to understand your options if a winding up petition is received.
Pre-Pack Liquidation made possible through Asset Refinancing (23 Jul 09)One of the problems which company directors face when considering a pre-pack liquidation solution is their ability to fund the purchase of the old company's assets and good will. One way this can be financed in the current climate is through asset refinancing
Winding Up the old company is important before starting the new (22 Jul 09)
When a company finds itself in a position where it just cannot afford to it pay its outstanding debt, the directors often ask me whether they can just close the doors on the business and wait for HMRC to issue a winding up order. In the mean time, the directors plan is to start a new business and carry on trading. There are two important factors to consider in this scenario
Over 200 pre-packs non compliant (22 Jul 09)
The handling of more than 200 pre-packaged administrations failed to comply with rules under Statement of Insolvency Practice (SIP) 16, a report reveals today
Bank says Business Lending Falls (20 Jul 09)
The flow of lending to firms fell at a slower pace in May and major lenders approved more mortgages in June, the Bank of England said on Monday, but analysts remained cautious about the outlook.
NEWS Shock at 45 Portland jobs go at Ceewrite (17 Jul 09)
NEWS Cooper Matthews involved in Company Administration.
Avoid Compulsory Liquidation and protect yourself as a director (14 Jul 09)
If the liquidator believes that the directors did not act properly during this period (particularly in the area of minimising the creditors losses), then they can accuse the directors of wrongful trading. If this accusation is upheld, the directors in question can be made personally liable for the company's debts.
Business Refinancing - Alternatives to the government Enterprise Finance Guarantee (14 Jul 09)
Despite the Governments claims that the Enterprise Finance Guarantee (EFG) would be the cornerstone for businesses to trade out of the recession, companies are still struggling to raise vital finance with the support of the scheme.
Debt Settlement Scams: 5 Tips To Avoid Them (07 Jul 09)Know some useful tips to stay away from debt settlement scams.
Business Refinancing - Raising Money in the Credit Crunch (02 Jul 09)
The credit crunch throughout 2008 and 2009 has put severe restrictions on the amount of money banks are willing to lend to their business clients. This situation is having huge implications for the development of businesses in the UK.
NEWS Cooper Matthews adds Business Refinancing to its Company Rescue Portfolio (01 Jul 09)
(London 01/07/09) Cooper Matthews (www.coopermatthews.com) the corporate rescue consultancy has added business refinancing to its portfolio of solutions for resolving corporate insolvency problems
Winding Up Orders now used as Debt Collecting Tools (30 Jun 09)
Winding up (or compulsory liquidation) is the closest thing to bankruptcy for a limited company. The process is normally initiated by one or more of a company's creditors who feel that the company should be closed and cease trading. over the past 12 to 18 months I have seen more and more creditors using winding up petitions to force creditors to pay outstanding debts.
Company Administration is not the best solution to save a failing company (26 Jun 09)
The theory behind company administration is that it allows a business to make a strategic review of its operations and implement often significant changes to allow it to trade profitably into the future. However, the very fact that a business has been put into company administration often leads to even greater trading difficulties.
What happens when an Administrator is appointed and how are staff affected? (24 Jun 09)
Given the current economic climate, it is unfortunately to be expected that an ever greater number of companies are going into administration. Staff are understandably worried and want to understand what administration is and what it means for their personal situation
I have a Winding Up Petition - What Does this Mean? (16 Jun 09)
If you receive a Winding up Petition, this could have very serious consequences for both you and your business. It is therefore very important to understand what a Winding up Petition is and the implications of receiving one.
I have a County Court Judgement - What does this Mean? (10 Jun 09)
Since the autumn of 2008 and the onset of what is being reported as the country's worst recession since the 1930's, more and more businesses are finding that they have been issued with a County Court Judgement commonly known as a CCJ. The purpose of this article is to explain what a County Court Judgement is, why they are issued and what the ramifications of receiving a County Court Judgement are.
Is a Company Voluntary Arrangement only half a solution to save a Failing Business? (05 Jun 09)
On the face of it, a Company Voluntary Arrangement is beneficial for both the company and its creditors. Despite these potential benefits, many insolvency professionals have long regarded Company Voluntary Arrangements with scepticism because they believe there is a likelihood of early failure.
Access to Personal Finance is as vital as Business Finance if we are to beat the recession (04 Jun 09)
I have come across many examples of small business owners or directors who use personal borrowing to supplement their business cash flow. This practise may not strictly be the right way to finance a business but certainly it has for a number of years, been the reality for many businesses.
Top Five Company Insolvency Warning Signs for your business (01 Jun 09)
The first quarter of 2009 saw difficult trading conditions for many businesses across the UK. The official Insolvency Service figures showed that in the first quarter of 2009, the number of companies being put into liquidation in England and Wales increased by over 50% compared to the same quarter in 2008. I would suggest that during these difficult economic times, directors and senior managers take special notice in the following areas.....
Company Liquidation - What is Liquidation and when should it be used? (16 May 09)
If you do not want to continue running your business or you think it is in difficulty and cannot continue to trade, then you need to get good information about your possible options. One area which you will need to consider is company liquidation. The purpose of this article is to explain in simple language what company liquidation is and when its use might be appropriate.
Record Insolvencies - How can Business Phoenixing Help? (13 May 09)
According to the latest Insolvency Service figures for England and Wales published on 1st
May 09, nearly 5000 companies went into liquidation in the first quarter of 2009...
...With increasing numbers of businesses finding themselves in serious trouble, more and
more company directors and shareholders are faced with a decision whether to invest more
of their own funds into the business to allow trading to continue...
(11 May 09)
As the recession continues to bite, more and more businesses are finding it difficult to continue trading. However, very often these difficulties are not because customers have stopped buying completely. Rather, they are buying in reduced volumes and asking for lower prices. Facing these circumstances, many businesses could continue to trade if they did not have the burden of servicing legacy debts....
Insolvency Practitioners we use are members of one of:
