Depending on your situation, there are a number of options available, Whether the best option for your company is a formal insolvency procedure or a business recovery plan, it is best to speak to an experienced professional as early as possible.
It is cheap, easy and fast. When a limited company is placed into liquidation, the shareholders and directors are not personally liable for the debts of the company, unless personally guaranteed. Once the company is in liquidation, creditors cannot take legal action against either you or the company (except for any P.G.’s). Only a licensed insolvency practitioner is legally able to act as liquidator.
Why is Voluntary Liquidation Tax Efficient? The MVL process allows the shareholders to close a solvent Company and for the surplus assets to be distributed to them by the Liquidator who must be a Licensed Insolvency Practitioner (IP).
What is a CVA – The company voluntary arrangement is a formal arrangement with the company’s creditors typically being paid over a 5 year period, repaying a fixed amount which is lower than the actual outstanding debt, which allows a business to continue to trade whilst repaying its debts at an agreed rate.
A highly successful recovery tool. The administration process allows the reorganisation of an insolvent company while protecting it from its creditors, within the administration the company’s plans are formulating the rescue of the business and maximising the assets realisation to maximise the outcome for the company’s creditors.
Make a fresh start. A Bankruptcy order is a court order that you can apply for if you can demonstrate to a Judge at County Court that you can’t afford to pay all of your debts. One of your creditors can apply for a Bankruptcy Order to be made against you if you owe them more than £750. Bankruptcy affords you the protection of the court from your creditors. Once the order has been made, they are no longer allowed to pursue you for the debt, ever again. This allows you to free yourself from overwhelming debt and make a fresh start.
An Individual Voluntary Arrangement is a contract between you whoever you owe money to, – you creditors. You pay an agreed monthly amount, almost certainly for 5 years to your Supervisor, a Licensed Insolvency Practitioner of your choice. The Supervisor takes his fees from the fund and pays the balance to your creditors in proportion to the amount of their debt. If the payments are made on time as per the agreement, the debts are deemed to be settled in full and final settlement of all claims.
A Debt management plan is an agreement between yourself and creditors brokered by a Debt Management company who agree to collect and pay over monthly instalments to your creditors. Some people can restructure their repayments into a more convenient plan and you won’t necessarily have to sell your home as part of the agreement. However, Interest usually continues to be charged so it takes years to reduce the debt. Debt Management Plans are becoming increasingly popular with banks and credit card companies who see a better return over a longer period than is the case with an IVA, and of course, Bankruptcy, which offers the lowest average returns to the Banks and credit card and asset finance companies.