If you are currently experiencing creditor pressure caused by escalating debt issues then, unfortunately, you have no time to squander. Do not worry too much though as you are not the first director of a company to struggle under the burden of creditor pressure and you certainly won’t be the last. The resolution to this pressure does not always have to be the worst case scenario either, as sometimes a simple restructuring can solve the problem and get your business back on track again. In other cases, insolvency may beckon and therefore your aim should be damage limitation.
No matter the situation, read on to see how you can deal with creditor pressure professionally and effectively.
This is perhaps the most common and most powerful creditor for all businesses in the UK; therefore it can be quite daunting working with them. They have the authority to issue a distraint order and obtain possession of your company property in order to be sold at auction. Any money raised will go towards compensating what the company owes.
Here at Clarke Bell we will ensure your options are crystal clear and that you understand the rights you have in your current situation. We can enable some time to negotiate with your creditors and delay bailiffs whilst we attempt to rescue your situation. This will allow us to postpone or totally avoid a winding-up process and ensuing liquidation.
A creditor may decide to pass your debt on to a collection agency or sell the debt to a 3rd party; especially if they have been unable to collect the amount owed from you directly via way of a payment demand. If a loan has been secured over an asset or property, a creditor may also be able to take possession of the asset or property. They can then serve you a written notice and request you pay off your loan and any interest accrued.
When Can a Creditor Take My Business To Court?
A creditor has the right to take your business to court for an involuntary formal insolvency procedure, which in most cases follows on to bankruptcy. This may only occur if your business owes a debt of £750 or more and only after you’ve been served with a statutory payment demand (of which the company has failed to comply with across a period of 3 weeks).
Bankruptcy Filings and Insolvency Procedures
In most cases, the main aim of insolvency is to safeguard and augment the best interests of your creditors. Nevertheless, there are a number of boundaries to this rule as some proceedings may abolish the need to reimburse certain debts. A creditor can also legally dispute a bankruptcy claim and they have the legal right to be heard in any such filing. What’s more, their presence does not have to be made at the 1st bankruptcy hearing to be able to challenge a claim.
Keeping the Pressure at Bay
The most effective way of alleviating creditor pressure is to agree on a repayment method that is mutually satisfying and beneficial to both parties. This will provide extra time and some much needed leniency whilst you pledge that the debt will be paid. If you are unable to come to such an agreement then it is highly recommended you seek the services of a licensed and professional Insolvency Practitioner.
Here at Clarke Bell we can help you create and propose realistic repayment plan that will be passed on to your creditors. We will work closely alongside both parties to ensure a satisfactory resolution is created for both parties.