Can't Pay Company Debt

Struggling with Company Debts?

When a company is struggling due to escalating debts owed to creditors such as HMRC and trade suppliers, it can be a hugely distressing time. The reality is that this situation is extremely common; particularly in the UK’s current trading environment where every sector seems to be under pressure.

Unfortunately, creditor pressure won’t just stop unless you take action. Those persistent phone calls, final demand letters, and invoice reminder emails will not go away if you put your head in the sand. And HMRC are becoming increasingly aggressive in pursuing tax arrears and taking directors to court with increased regularity. Which means the best time to take action is now – before the insolvent position of your company worsens, and possibly starts to affect you personally.

Director Redundancy Entitlement – Did you know that as a limited company director, you may be entitled to claim redundancy if your company enters into an insolvent liquidation process? We can point you towards a fully regulated third party who can provide advice on your right to claim director redundancy if this is applicable to your situation. To understand if you are entitled, give a member of our team on 03301200807, or email help@bussinessdebtsadvice.org.uk.

Understanding your duties as a company director

At UK Liquidators, we help hundreds of company directors just like you by putting a stop to creditor pressure and protecting your business from incurring further debt. As the director of an insolvent limited company, you have certain duties and responsibilities which you must adhere to. One of these is to place your creditors’ interests above those of yourself and any other directors/shareholders, meaning you must not do anything to worsen their position or expose them to further losses. This may require you to cease trading immediately in order to prevent the company’s financial position declining further, however, in some cases you may be able to continue to operate – at least in the short-term – if it is deemed that this action could have a material benefit to outstanding creditors. By taking the earliest possible action and contacting us, we can quickly ascertain whether liquidation is the right course of action or if a restructuring and turnaround process is realistically achievable.

If your company is insolvent with no realistic prospect of things improving, liquidation may be the most appropriate next step. As you and your company are separate legal entities you will not be expected to pay your company’s debts should there be insufficient funds within the business to settle these, unless you have provided a personal guarantee.