Dealing with spiralling legal fees

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Updated: 21st January 2021

I can't pay my business legal fees

Business legal fees can quickly grow into significant debt, particularly if you’re subject to complex tax investigations or employment tribunals. If working capital is already under strain, the ensuing financial situation can ultimately threaten a business’ future.

As an example, if your legal fees amount to £750 or more and the debt is undisputed your creditor may be able to take winding up action against you, leading to the liquidation of your company.

What happens when I owe legal fees that my business cannot afford to pay?

If your creditor has unsuccessfully tried to collect payment, they may decide to send a 21-day statutory demand for the debt to be settled in full. If this demand isn’t met it provides official proof that the debt exists, and they may be able to petition for your company’s winding up.

It’s essential to keep communications open and try to negotiate to pay your legal fees in instalments, as although it’s likely to attract additional charges, the extra time to pay your business legal fees can make a huge difference to the overall financial position of your organisation.

What can I do about unpaid business legal fees?

Legal expenses insurance

If you have commercial legal expenses insurance in place you may be able to call upon the policy to pay some or all of your fees. Legal expenses insurance typically covers the legal fees arising from day-to-day operational activities, as well as standalone incidents such as damage to your premises.

Alternative finance

You may be able to secure an alternative form of finance that would provide a boost to your working capital, either in the form of a cash lump sum or regular cash payments through the month.

Company Voluntary Arrangement (CVA)

Company Voluntary Arrangements allow companies experiencing temporary financial problems to get back on their feet. If you can’t afford to pay your business legal fees and there’s more than one debt, we may be able to restructure your debt after formal negotiations with creditors.

Real Business Rescue specialises in business recovery and has professional contacts with alternative lenders around the country. Please contact one of our partner-led team to arrange a free same-day consultation. We work from a large network of offices throughout the UK so you’re never far away from professional help when you need it.

Jonathan Munnery


0800 644 6080
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