Updated: 9th September 2021
We owe thousands on a startup loan that was put on the back-burner recently because we have had so many increases in operating costs. I never thought that putting this loan off would come back to haunt me like this, but apparently the lender has now started turning to legal action as a means to collect. We’ve been told by the lender that we have one month to make a payment or they will be pursuing liquidation as a means of recovery. Is it possible to stop liquidation at this stage?
Fortunately, since your creditor has not yet petitioned the court to wind up your company, it is still possible to stop liquidation at this stage. However, if you wait until you are served a winding up petition then it may be too late, as the bank could freeze your accounts at that time.
The most efficient way to stop liquidation in its tracks is to enter into administration voluntarily. Once an administration order is granted all legal actions taken against your company are halted. This, in effect, means liquidation is postponed while the administrator performs their job of running the company with the goal of satisfying creditors. In the field, we say it draws a ‘ring fence’ around your company to keep creditors from pursuing further action as a statutory moratorium is created.
Real Business Rescue will look at options such as sale of assets, finance and funding, restructuring of your business model or perhaps a negotiated Company Voluntary Arrangement wherein your creditors accept a monthly repayment plan. Often a CVA will wipe out a good portion of your outstanding debt if negotiated by an expert insolvency specialist!
Yes, creditors are willing to settle for a portion of outstanding debt because the alternative isn’t always great for them. They know that compulsory liquidation doesn’t always work to their advantage because of the costs associated with the process which take priority over payment to creditors.
Unfortunately, if you wait until the liquidation is underway then the liquidator appointed by the court or your creditor will probably not be too concerned with the preservation of your company.
17th September 2021
Sales across the UK’s retail sector fell in August for the fourth consecutive month, according to the latest figures from the Office for National Statistics (ONS).Read More
9th September 2021
High levels of debt are causing significant concerns for decisionmakers at small and medium-sized enterprises around the UK, according to a new piece of research.Read More