Creditor Pressure

If your Company has increasing debt issues and creditors are pressuring you for payment that cannot be discharged, then advice should be sought from a Licensed Insolvency Practitioner as soon as possible.

A Licensed Insolvency Practitioner will guide you as to what you should or shouldn’t be doing and what you can or can’t do if your Company is suffering from financial difficulties.

Many companies throughout the UK have to come to terms with creditor pressure, which could have arisen for a number of reasons, and sometimes such pressure could ultimately lead to a formal corporate insolvency procedure. You may feel alone when creditor pressure begins to mount, but if you contact a Licensed Insolvency Practitioner as soon as you know that the creditor pressure will become too great to deal with, the better chance they have of helping you avoid a formal insolvency procedure. Here at Corporate Financial Solutions we provide all initial advice and guidance free of charge, so contact one of our Licensed Insolvency Practitioners today if you are facing mounting creditor pressure.

How will CFS Restructuring LLP be able to help me?

Our Licensed Insolvency Practitioners are well versed in helping businesses that are struggling financially. We have, between us, helped rescue many business across a broad range of industries. The key to saving your business is often about recognising as soon as possible that there is going to be an issue and avoiding the creditor pressure that will arrive when cash flow starts to deteriorate.

The sooner you take professional advice, the better chance you have of saving your business. If you do believe as a Director of a Company that creditor pressure is mounting and you can’t see a way that it can be alleviated, contact CFS Restructuring LLP today for free confidential advice. We will provide all of our initial advice and guidance free of charge, so don’t feel as though you have to deal with all of the creditor pressure by yourself.

What Happens if the Creditor Pressure becomes too much?

We are experienced in helping alleviate pressure that is placed upon businesses by its creditors. In the event that a formal insolvency procedure is required to help with this process, then this will be discussed with you and the options that are available to the Company will be fully explained.

How do I know when to take creditor pressure advice?

Creditor pressure is likely to increase over an extended period of time. It usually starts with one or two payments to suppliers being delayed, then usually HMRC liabilities are put to the bottom of the pile for payment. As soon as you stop making payments to your creditors when the debts fall due, the Company could be technically insolvent. This brings with it other matters that the directors should be aware of, such as wrongful trading. As a Director of a business you will hopefully recognise immediately when an issue arises, so as soon as your payment terms become stretched and, HMRC contributions are no longer being met, it would be prudent to take advice from a Licensed Insolvency Practitioner.

Should I pay my trade suppliers instead of HMRC?

It often happens, trade suppliers, because you need them for the day to day running of your business, are the first to get paid. HMRC are an involuntary supplier and as such many see them as the last person that should be paid, or they think that they can get away with not paying them for a while. This is a common misconception and with modern day real time assessments, HMRC will know immediately when your Company has missed one of its contributions or payments. HMRC are the most common creditor to apply pressure and have wider powers available to them to recover their debt, including entering your Company premises and removing assets, even without a Court order. So, whilst it is tempting to pay everyday suppliers ahead of HMRC, it is a practice that is not recommended and could ultimately lead to the closure of your Company sooner than you had anticipated.

What rights does a creditor have when pursuing the repayment of a debt?

If your Company is suffering from creditor pressure and your debts are mounting, some of your suppliers may take matters into their own hands in an attempt to recover their debt, which could include;

  • Appointing a debt collection agency to pursue the debt of their behalf.
  • Sell their debt to a third party who specialise in pursuing bad debts.
  • Enforce any security that that have over a Company’s property.
  • The right to serve a written notice for repayment of any loan plus accruing interest.
  • Could issue a Statutory Demand which then could ultimately lead to the Company being forced into Compulsory Liquidation if left unanswered.

Can one of my Company’s creditors take me to Court in a personal capacity?

In most circumstances the answer would be that one of your Company’s creditors cannot pursue you in a personal capacity for a Company debt. However, if you have provided any personal guarantees to a Company supplier, then they could, if you do not repay the debt or enter into a repayment plan with them, petition for your Bankruptcy if they have sufficient debt outstanding.

How can CFS Restructuring LLP help me with Creditor Pressure?

If you’re having problems with creditor pressure and feel you would benefit from advice from a Licensed Insolvency Practitioner, please contact Corporate Financial Solutions today for a free consultation.

We can be contacted via telephone, email or, if you prefer, simply fill in our enquiry form and one of our Licensed Insolvency Practitioners will get in touch with you within 24 hours.