|
Insolvency | Return to menu |
 |
||||
| Introduction | As a business
or as an individual, you become insolvent the moment you are unable to pay
your debts as they fall due, or if your assets are less than your liabilities. The pages below explain the various insolvency processes that are available for those individuals or businesses that get into financial difficulties. If you are really finding it difficult to make ends meet, then the time to seek professional advice is well before it becomes impossible. For very understandable reasons, most people leave it far too late to approach an insolvency practitioner. Some of the voluntary options that may have been available to them had they acted sooner, may now be lost to them. You should also be very selective about from whom you seek advice. You only have to pick up the Yellow Pages to find many dubious and unqualified insolvency advisers that operate right on edge of the law. Their advice is often self-serving, and frequently inappropriate. It is worth bearing in mind that once it has been established that a person or business is insolvent, the only person lawfully allowed to offer advice on what should be done next is a licensed insolvency practitioner. This infosheet goes on to describe the different kinds of insolvency proceedings. You may also find the following infosheets of interest. What happens at a creditors' meeting Accounting for bad debt |
|||
| Personal insolvency IVA Bankruptcy |
Many individuals
find themselves in financial difficulties as a result of their own failing
business. As a sole-trader or partner in a business, you become personally liable for discharging any unsettled debts arising from that trade. Other common reasons for personal insolvency arise from the unexpected lose of regular income through redundancy, injury or failing health. If you are worried about your financial position then don't ignore those demand letters. Seek advice about whether one of the two following options might be appropriate for your personal circumstances: |
|||
|
Corporate Insolvency Receivership Administration CVA Liquidation |
In the case
of an insolvent company, there are four different methods of proceeding. Unlike a personal insolvency, the owners (shareholders) and directors of a company cannot normally be held personally liable for the debts of the trading company. The original concept of the 'limited liability' company was to literally limit the responsibility of the directors and owners to settle any claims made against the business. If the liquidated assets of a company are insufficient to settle all the claims, then those left out of pocket cannot seek the balance of what they are owed from either the directors, or the shareholders. The following insolvency remedies are available, depending upon the nature of the problem, and whether the directors initiate the proceedings, or if the creditors start the ball rolling. |
|||
|
||||