How to prevent creditors knocking at your door
Mr Bankruptcy
30th September 2022
If you’re concerned creditors may be about to act against your business, especially in the light of the Government’s recent ‘mini-budget’, here are some actions they can take and what you can do to about it.
What actions can creditors take?
When trying to retrieve debts owed to them by a business, creditors have several options to choose from:
- County/High Court Judgement
If you fail to repay debts, a CCJ/HCJ is a court order that can be registered against you. It will impact your business’ credit rating for 6 years if the debt isn’t repaid within a specific time after the Order is issued. It can also be used to close a business by creditors as proof of insolvency.
- Statutory Demand
This is a written warning to repay a debt or agree alternative arrangements with the creditor. As this is a legal warning, the creditor’s solicitor will issue a statutory warning and this can be a step towards a winding up petition, although it’s not a prerequisite.
- Winding up petition
Creditors may file a winding up petition with the court. This is the most serious action they can take because, if granted, it puts your business into compulsory liquidation.
What actions can you take?
Being in debt does not take the future of your business out of your hands. While creditors have options for what they can do to recover debt, you also have choices about how to manage your debt, with some important positive actions within your power to take:
- Take action, be proactive and don’t ignore your financial difficulties
- Communicate with creditors early on, so they are aware of your difficulties and can help you to find a mutually agreeable solution to repay their debt
- Don’t be afraid to negotiate. Creditors will be keen to retrieve their money, so finding a solution for repayment of monies owed is in their interest too
- Enter into a Company Voluntary Arrangement (CVA) if you have more than one debt and want to structure them into an affordable repayment amount while still continue trading
- Company administration will secure a period of time for an Administrator to create a recovery plan, with a CVA as one possible option
Learn more about your options
The possible actions above illustrate some of the options available to help put off creditors from knocking at your door, but it is important to get expert advice to understand all the implications of each option and find the best solution for your particular situation.
As debt advisors, James Rosa Associates can negotiate with creditors to put manageable repayment plans in place and help you to understand the implications of each option.
Looking after mental health
Importantly, we understand the effect of debt on mental health and wellbeing. We make sure our support is personal, human and non-judgemental so that clients know they aren’t alone and can build the confidence to find a path back to a debt-free future.
James Rosa Associates
James Rosa associates is a firm of specialist debt advisors and debt adjustors. With a supportive and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors who face unmanageable debt, or who are involved in civil or commercial disputes. Our services include:
We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions for their specific circumstances.
Find out if you qualify for a free consultation
If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.
Please be advised that all views expressed in these posts are those of the author and not of James Rosa Associates ltd.