• Home
  • About Us
    • Our fees and charges
    • Terms of Business
    • Complaints procedure
    • Agreement to Mediate
    • Team
    • Privacy Policy
  • Consultation
  • Solutions
    • Insolvency Support
    • Negotiated Settlements
    • Personal Bankruptcy Experts
    • Mediation
    • Comparison of Solutions
  • Case Studies
  • Testimonials
  • Blog & News
    • Press & Awards
  • Links
  • Contact us
  • Home
  • About Us
    • Our fees and charges
    • Terms of Business
    • Complaints procedure
    • Agreement to Mediate
    • Team
    • Privacy Policy
  • Consultation
  • Solutions
    • Insolvency Support
    • Negotiated Settlements
    • Personal Bankruptcy Experts
    • Mediation
    • Comparison of Solutions
  • Case Studies
  • Testimonials
  • Blog & News
    • Press & Awards
  • Links
  • Contact us

Advice and support on

  • Insolvency Support
  • Mediation
  • Personal Bankruptcy Experts
  • Negotiated Settlements

Sign up to our newsletter


*no SPAM guaranteed

Recent Posts

  • Give yourself time to think, with the Debt Respite Scheme
  • Preserving your future aspirations in the face of unmanageable debt
  • How sustainable is your debt situation? Your credit report reveals all
  • Strategies for achieving financial freedom from debt
  • Understanding the differences between bankruptcy in England and Wales, and in Scotland

Recent Comments

    Archives

    • May 2025
    • April 2025
    • March 2025
    • February 2025
    • January 2025
    • November 2024
    • October 2024
    • September 2024
    • August 2024
    • July 2024
    • June 2024
    • May 2024
    • April 2024
    • March 2024
    • February 2024
    • January 2024
    • December 2023
    • November 2023
    • October 2023
    • September 2023
    • August 2023
    • July 2023
    • June 2023
    • May 2023
    • April 2023
    • March 2023
    • February 2023
    • January 2023
    • December 2022
    • November 2022
    • October 2022
    • September 2022
    • August 2022
    • July 2022
    • June 2022
    • May 2022
    • April 2022
    • March 2022
    • February 2022
    • January 2022
    • December 2021
    • November 2021
    • October 2021
    • September 2021
    • July 2021
    • June 2021
    • May 2021
    • April 2021
    • March 2021
    • February 2021
    • January 2021
    • December 2020
    • November 2020
    • October 2020
    • September 2020
    • August 2020
    • July 2020
    • June 2020
    • May 2020
    • April 2020
    • March 2020
    • February 2020
    • January 2020
    • December 2019
    • November 2019
    • October 2019
    • September 2019
    • August 2019
    • July 2019
    • June 2019
    • May 2019
    • April 2019
    • March 2019
    • February 2019
    • January 2019
    • December 2018
    • November 2018
    • September 2018
    • July 2018
    • March 2018
    • January 2018
    • May 2017
    • January 2017
    • December 2016
    • November 2016
    • September 2016
    • August 2016
    • July 2016
    • May 2016
    • March 2016
    • February 2016
    • January 2016
    • October 2015
    • September 2015
    • August 2015
    • July 2015
    • May 2015
    • April 2015
    • March 2015
    • February 2015
    • January 2015
    • December 2014
    • November 2014
    • October 2014
    • September 2014
    • August 2014
    • July 2014
    • April 2014

    Categories

    • Bankruptcy
    • Case Study
    • Economy
    • Events
    • Finance
    • Guest
    • Insolvency
    • Mediation
    • Mr Bankruptcy
    • Newsletter
    • Other
    • Personal Guarantees
    • Press Release
    • Turnaround

    Meta

    • Log in
    • Entries feed
    • Comments feed
    • WordPress.org

    What is insolvency?

    by Julian Donnelly

    25th April 2014

    Insolvency:

    \In*sol”ven*cy\, n.; pl. Insolvencies. (Law)

    (a) The condition of being insolvent; the state or condition of a person who is insolvent; the condition of one who is unable to pay his debts as they fall due, or in the usual course of trade and business; as, a merchant’s insolvency.

    (b) Insufficiency to discharge all debts of the owner; as, the insolvency of an estate.

    (c) Relating to persons unable to pay their debts.

     

    The oldest record of insolvency can be found in the Bible:

    DEUTERONOMY 15: 1-2

    “At the end of every seven years you are to cancel the debts of those who owe you money. This is how it is done. Everyone who has lent money to his neighbour is to cancel the debt: he must not try to collect the money: the Lord himself has declared the debt cancelled.”

     

    Brief History of Insolvency

    In ancient times, an insolvent debtor was subject to very harsh treatment. As trade and commerce developed, steps were taken to ease these severe treatments.

    In Ancient Rome, creditors had the right to enslave the debtor as well as his family. In seventeenth century, during golden days of British Empire, a debtor who could not give genuine clarification for unsolved debt had to bear public humiliation.

    In the Victorian era, and even up until the late 50’s, it was not unusual for an individual who could not pay his or her debts to spend a period of time in debtor’s prison.

    The original purpose of a bankruptcy was a solution to insolvency, and not a method of avoiding debt. The aim was to liquidate all assets of an individual’s estate (large or small) in order to pay creditors as much of what was owed as possible. The creditors would accept a portion of what was owed, as it was clearly all that the debtor possessed.

    The aim of bankruptcy in the literal sense remains the same, although there are now many more options open to individuals finding themselves, or their business, insolvent (or close to it).

     

    Personal Guarantees

    by Julian Donnelly

    21st April 2014

    As a director of a limited company, it is standard practice for lenders (and indeed some suppliers) to request that you sign a Personal Guarantee (PG) to act as security for company borrowing. By doing this, the creditor will have recourse to the director personally in the event the company defaults. PGs are not used for sole traders or partnerships (except LLPs) as any debt of the “company” is deemed as a personal liability of the business owner(s) and so a PG is not required.

    If you have been asked to sign a PG, you should always seek independent legal advice before signing anything as the terms can vary (it is not uncommon for the banks to request a legal charge over your home at the same time). It is also worth noting that most banks will keep a PG on file indefinitely, even once the borrowing has been repaid.

    In the event that a PG is called upon, the next step can vary depending on the creditor and the amount being called on. The usual routes are:

    1. The creditor will issue a Statutory Demand. This will give you 21 days to either settle the debt or reach an agreement to pay. If this is not possible, the creditor can start bankruptcy proceedings (providing of course that the debt is over £750 which is usually the case with PGs).
    2. The creditor can apply for a County Court/High Court Judgement. The usual results will be that they then wither get a Warrant of Execution and get the bailiffs in, or they go for a Charging Order to secure the debt against your home.

    If a PG is called upon, the first route is to get legal advice to ensure it is valid. If it has not been drawn up and/or executed correctly, it could well be invalid. The second route is to talk to the creditor (if you haven’t already). Legal action can be a lengthy and costly affair and most creditors would entertain a negotiated settlement as long as there is a strong commercial case for them to do so.

    The best way to protect yourself would be to seek professional help prior to the default event which causes a PG to be called upon. The earlier the professionals get involved, the more tools they have at their disposal to help you. If you have a PG that is being called upon, do remember there is still help at hand, but the available options are somewhat reduced.

    A history lesson

    by Julian Donnelly

    19th April 2014

    Everyone has heard about the “economic cycle”, but few people really understand the history behind it. As the old saying goes “what goes up, must come down” is as true to global economics as anything else. Everyone has heard about The Wall Street Crash in 1929 which started the Great Depression. More recently, there have been crashes in 1987 (“Black Wednesday”) and the dot-com bubble in 2000. These crashes have always had some kind of catalyst.

    The first financial crash in the Western world can be dated back to 1622 when the Holy Roman Empire debased its coins, triggering the equivalent of a modern banking panic. That was followed by the 1637 tulip boom-and-bust in Holland and the 1720 South Sea bubble.

    Eight more crashes then occurred in the 18th century, culminating in the Hamburg commodities bubble of 1799. Then in the 19th century, the pace of financial disasters sped up with 18 financial storms erupting in Europe, and increasingly in the US too. These included bank crises that hit the US in 1819, 1837, 1847, 1857, 1873, 1884, 1890. A financial crisis even struck Australia in 1893.

    The 20th century saw an incredible 33 market storms with the best known being the stock market crashes of 1929 and 1987.

    What lessons are to be learned from this? Every time, there have been people saying that the old fundamentals of economics no longer apply, only to find that of course they do! Remember all the dot-com millionaires who kept saying that it was a brand new economic model, so old rules don’t apply (like Cashflow and profit?). Gordon Brown even claimed to have “abolished the cycle of boom and bust” when Chancellor. The commodities may have changed over time, but the fundamental rules of economics never do!

    Sign up to our newsletter

    Useful links

    • Home
    • About us
    • Consultation
    • Blog & News
    • Press
    • Contact us

    Solutions

    • Insolvency Support
    • Mediation
    • Negotiated Settlements
    • Personal Bankruptcy Experts

    Social

    • Facebook
    • Twitter
    • LinkedIn

    The Old Rectory Business Centre
    Springhead Road
    Northfleet
    Kent
    DA11 8HN

    T: 0845 680 7217
    E: enquiries@jamesrosa.co.uk

    © 2018 James Rosa Associates Ltd. All rights reserved.