The Business Bulletin
Bankrupt, insolvent or in need of rescue? What happens when you reach out to an Insolvency Practitioner?
I doubt any business owner is totally
use to you if you need us. Insolvency
there is a little bit of confusion over
ready for the pressure that being in
advice is not a ‘saleable’ item like
terminology. We will always explain
charge can bring. It’s hard being the
buying a tin of beans because it is
everything in plain English, but a
person at the top, particularly when
only relevant when and if you need it.
few key words are good to know in
it comes to having money issues.
So, when you call a good insolvency
advance. To simplify things down:
Every company is unique in its own
professional, before they do anything
way but if there is one thing they
else, they should establish if you need
have in common, it is the sleepless
them. If you don’t need them, then
nights that come along with the
great news, you no longer need to
realisation that you may be in trouble
worry, or at least not worry quite as
financially. Whether you are struggling
much. If you do need one, then what
with HMRC, unpaid debts, cashflow,
happens next is not as bleak as you
wanting to close your business
would think. Here is an overview of
voluntarily, or one of the many other
how it usually works.
reasons you may need help, taking the first step and calling an Insolvency understandably difficult step to take. You are potentially starting down a
Firstly, let’s clear up a few
life changing road, so naturally there is going to be a lot to worry about, but there may be less than you think and worrying doesn’t really help. The first question most business
misconceptions so that we are all talking the same language. When you contact an insolvency practitioner their first response will be to help keep you in business. The bottom line is that we
owners want answered is whether
are not here to look for a way to close
they should reach out to an insolvency
you down.
practitioner in the first place.
My experience is that a number of
The answer to whether you should
businesses that come to see me can
contact someone is simple. If you think
be rescued and the first approach is
you may be in need the services of
always to look for ways to keep you
an Insolvency Practitioner, then you
trading. This will be true of any good
should contact one. You are clearly
insolvency professional. It isn’t always
worried enough to be thinking about
possible to keep a business viable
insolvency so you definitely must do
unfortunately, but closure is always
something. Remember, we are only of
a last resort. Secondly, sometimes
8 | Issue 1 – Finance
to individuals. Sole traders for example. ■ Insolvency is when you are unable to pay your debts. So, it is a global term usually used to describe the situation where your debts exceed your ability to pay them.
What happens after you contact us?
Practitioner is the best idea. But it is an
■ Bankruptcy is only applicable
■ Liquidation is where a company’s assets are used to pay off its debt(s). ■ Administration is where an Insolvency Practitioner is appointed to try to rescue the business or chose the best course of action for a business which is insolvent. The start point therefore, is with assessing your current situation. depending on which of the above applies to you, (assuming they apply at all) someone will then will work with you to decide the best course of action and what your initial steps should be. Ideally they will be towards recovery. The consultation will take place in a convenient way and location for you.
