What should I do if my company cannot pay its debts?

Published: 16/02/2022 By Jane Price

There has been a huge increase of creditors applying to the courts seeking County Court Judgements (CCJ’s) demonstrating that companies who are owed money are taking a tougher stance on recovering debts, in many cases to ensure their own survival.  If you are a director of a limited company that is struggling to pay its debts as they fall due the company is most probably insolvent.

But what should you do?

Start by taking our insolvency test here. This short insolvency questionnaire will assess what options may be most appropriate given the unique circumstances of your business.

Then get some advice, its as simple as that.

However, it is vital directors take advice from a licenced insolvency practitioner like turpin barker armstrong as soon as a they become aware the company may be insolvent.  As doing nothing could result in facing legal action for wrongful trading or fraudulent preference, an insolvency practitioner will be able to tell you exactly what position your company is in.  

Don’t wait to receive a winding up petition from an irritated creditor. Our advice is to take action quickly.  You could save your business.  

If advice is sought early enough the various routes open to a director could be:

Restructuring a company

 Company Voluntary Arrangement
 Company Administration

Closing a company

Creditors Voluntary Liquidation (CVL)

We can assist with all insolvency processes but we try to promote a rescue and restructure culture with all our clients. Give us a call today for an informal chat to see how we may be able to help. Call 020 8661 7878 or email insolvency@turpinba.co.uk