Despite proper planning and management, all businesses can suffer cash flow problems at times. So, the risk of facing business debt and bankruptcy is as realistic as being successful.
There are many different types of business debt. Owing money means choosing the best option for dealing with company debt.
It helps when you understand more about the legal role and enforcement powers of creditors.
In fact, they have several different methods of getting money back from anyone that owes them money (their debtors).
Information in this section lists the most common types of debts. The help guide covers topics including business debt and bankruptcy issues.
Does a person or organisation owe you money? If so, check the topics below which cover court claims for getting your money back. The guidance also explains business insolvency and company liquidation processes.
The best option to choose during business insolvency varies. The company and its creditors will need to consider them all. Even so, the assets of the business (if any) and the business status will dictate the proper path to take.
Trading 'insolvently' often leads to closing down a business altogether. As a rule, you become insolvent if either:
Note: It may be an offence for a limited company director to continue trading when the company is insolvent.
If a sole trader goes bankrupt they are no longer liable for any personal or business debts. Even so, going broke means your personal and business assets could be sold off. Hence, suffering personal bankruptcy would make it very difficult to continue in self-employment.
If you are unable to pay your debts, the current cost of filing for bankruptcy in England is £680 (and Wales).
You should have certain information prepared before you apply for bankruptcy online (e.g. debts, income, and outgoings). You may also need to provide further details about:
Even though you must use the online service to apply for bankruptcy, you need to have paid the full fee before submitting the application.
You should wait until the court makes a decision if you have if you applied for a person at risk of violence (PARV) order.
You can get guidance about bankruptcy petitions and misconduct of trading. Extra details cover company insolvency in England and Wales.
Insolvency Service Contact Number
Telephone: 0300 678 0015
Monday to Thursday: 9am to 5pm
Friday: 9am to 3pm
Learn about phone call charges.
The Financial Services Compensation Scheme (FSCS) can help victims recoup money lost through the mis-selling of their investment (e.g. give misleading advice to a customer).
This section explains how to make a claim for poor investment advice compensation if you lost money after receiving poor advice.
There are several ways of recovering assets from a company in dissolution. Find out how to claim money or property from a dissolved company.
The page explains the complete process of county court judgments for debt collection. Find out what to do if you get a CCJ and how to get it set aside or change the amount you pay.
Receiving late commercial payments interrupts company management. Check how much a business can charge in interest and debt recovery for a late payment.
There is a specific process for taking court action to repossess a property or to evict a tenant. You should use the possession claim online if a tenant or mortgage holder refuses to pay.
Note: There are several ways to complain about a claims management company. It depends on whether you contact the claims company or make a complaint to the Claims Management Regulator.
Serving a winding up petition symbolizes serious legal action initiated by a creditor. Find out how to stop a winding up petition and avoid a chain of events that follow.
You can check if a company is in financial trouble on the GOV.UK site. The online tool lets you find out if a company is being liquidated or in provisional liquidation. You can also search the details of companies with frozen assets or insolvency proceedings.
Use the government site to get information about a company. The details include its directors, registered address, and previous company names. You can also check the accounts, reports, annual returns, and whether it got dissolved.
A director has several overriding responsibilities if a company gets liquidated. One of the most important is cooperating with the official receiver (OR).
There is an automatic ban from working as the director of a company after going bankrupt. Thus, you can report a disqualified director for breaching the restrictions of a ban.
Information in the page explains the process of administrative restoration or 'company restoration'. Check how to restore a dissolved company to the Company Register.
Find out how to take someone to small claims court in the United Kingdom. This help guide explains the process of legal action to make a court claim for money owed to you.
Money Claim Online is a secure Internet based service for claimants and defendants to use. MCOL is the convenient way to make a money claim online or respond to one via the Internet.
Information in the section explains most of the issues of dealing with loan sharks. The best advice is to avoid them and learn how to report an illegal loan shark if you spot one.
Dealing with Business Debt: Bankruptcy and Insolvency Management in United Kingdom