Your Corporate Debt Solutions
There are quite a few options for a Limited Company with debt problems. In fact there are more options available then for an individual in debt.
- CVA (Company Voluntary Arrangement)
- Quite simply a mechanism for paying back some (if not all) the debt over time. You we would put a proposal to the creditors, explaining what has happened and why it won’t happen again (it’s like going to the Headmasters office in school). It would include forecasts of what you can afford and when. They would then take a vote on whether or not to accept the proposal. If enough vote then you start making the payments.
- Voluntary Liquidation
- Certainly the solution that most people have heard off. And the one that is most misunderstood. There are so many myths surrounding Liquidation, every time we speak to a new client about it, we get to hear a new Liquidation myth. Quite simply it is a way of closing down a company (there are Insolvent and Solvent versions of it). The Directors are usually free to go back into business again, the historic debts dying with the company.
- Administration – AKA receivership.
- Once the must have solution for companies in trouble. Now, due to changes in legislation, it is a lot more controlled then it once was. The theory is that you bring in an Administrator who will oversee the running of the company (‘calling in the receivers’). Once in place the Administrator can see exactly what needs to be done to get the company out of it’s debt problem. At the end of the Administration, the Administrator would put a proposal to the creditors on the best way forward.