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My Business is Bankrupt – What are my options?

Although you may be deep in debt it may be possible to avoid bankruptcy (or liquidation if you are a partnership or company) if you have a viable business or assets to sell. However in some cases going bankrupt may be the best option just to give you a clear start. Bankruptcy only applies to individuals, sole traders and partners in a business.

 

BANKRUPTCY TRIGGER POINTS

There are usually a handful of trigger points that make a business realise it is in trouble. These are:

  • Being unable to pay the employees
  • The bank calls in its loans or overdrafts
  • A bailiff calls and ceases goods (or)
  • HM Revenue and Customs start bankruptcy proceedings

There are others trigger points as well such as a review of your monthly accounts with your accountant.
When your back is against the wall (with debts) the first decision to be made is whether or not the business could be viable in the future?
If it is viable, then there are a variety of options to avoid bankruptcy or liquidation. These are an Individual, Partnership or Company Voluntary Arrangement or a pre-pack administration. If not viable then the usual solution is bankruptcy or liquidation.

A WORD OF ADVICE

In both cases, it will be worth talking to a licensed insolvency practitioner first to make sure that you are choosing the right option for you and to understand any potential downsides – for example, losing your home, the effect on your credit rating or the implications of any guaranteed debts.


AUTHOR: LISA THOMAS
Licensed Insolvency Practitioner at Neville & Co.
Lisa Thomas - Neville & Co

If your business is facing financial problems I can help you with clear and impartial advice on your options.
I can discuss with you the pros and cons of liquidation, company voluntary arrangements, administration or whether a time to pay agreement is more appropriate. All information given to me is confidential and no question is too stupid to ask. I will do the best I can to help.