Updated: 21st January 2021
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.
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.
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.
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.
13th May 2021
The government and HMRC have issued a warning to businesses to be on the lookout for operators within their supply chains who may be committing fraud via the use of mini umbrella companies.Read More
12th May 2021
The British Retailer Consortium (BRC) is arguing for the creation of a new arbitration process to help find a solution to the issue of billions of pounds being owed.Read More