15th August 2022
If you are declared bankrupt while you’re a director of a limited company, it means some significant consequences for you. Before being declared bankrupt, it’s important to be aware of the impact and consider whether there are alternative ways to manage your debt.
What exactly is bankruptcy?
Bankruptcy is a formal procedure for individuals to deal with debts they can’t pay. Applications to declare bankruptcy can be made by the individual, or creditors can petition to make you bankrupt if you don’t repay debts owing to them in a reasonable time. Insolvency practitioners can also make you bankrupt if the terms of an Individual Voluntary Arrangement (IVA) are broken.
Bankruptcy orders usually take 12 months to discharge but this period can be longer if your conduct as a company director is called into question.
What are the consequences of bankruptcy?
If you are considering bankruptcy and are a director of a limited company, there are some important implications you must be aware of:
How can I reduce the impact of bankruptcy?
As a company director, you can stop acting as the director before declaring bankruptcy. You can appoint another director to run the business or leave it to existing directors if there are more than one. This won’t protect your personal assets, but it will ensure that your business can continue.
Is bankruptcy my only option?
It’s often the case when managing debts that there’s always more than one way to address the challenges you face. The consequences of bankruptcy are serious so an alternative approach, such as an IVA or a debt management plan, could be a better option for you.
To have as many options as possible open to you to manage your debt, it’s always best to act quickly when you realise that your debts are becoming unmanageable. It may feel like a difficult conversation to start but, as soon as you do it, the support of an expert debt advisor can be that light at the end of the tunnel you were looking for.
James Rosa Associates
James Rosa associates is a firm of 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 in order to produce bespoke solutions that fit 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 email@example.com 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.