Published: 22/05/2022 By Hannah McCormackWe always talk about our rescue and recovery mindset and that not all companies in financial distress require an informal insolvency procedure but what other options are actually out there for directors?
In a series of blogs we will go through some of the informal options that could be available to you and your company in order to get things back on track.
First up is an informal arrangement with your creditors:
In order for an informal arrangement with outstanding creditors to be an option this needs to be addressed early on, before relationships are strained and creditors become frustrated.
The idea is to reach an informal agreement to repay the whole debt(s) over an agreed period of time.
An informal arrangement can be an ideal solution as they cost much less in regards to fees, to put in place than a formal insolvency process. However, you have to rely on the goodwill of all parties to adhere to the agreement as it will not be legally binding; unless you decide to draw up formal documentation but that will incur extra costs.
It also needs to be noted that within an informal arrangement interest and charges will not be stopped, unless this is also agreed as part of the arrangement with the creditors. This may mean your debt levels could still continue to increase each month, depending on how much you can afford to repay each month.
Speak to one of our expert advisors who will be able to go through what is affordable and if an informal arrangement would be a beneficial outcome for you and your company.
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