Personal and Corporate Insolvency
Being insolvent is a state of financial distress for an individual or company and occurs when that entity is no longer able to meet the financial obligations they have agreed upon with their lenders or creditors. In short, they cannot pay their bills.
Finding yourself in severe financial difficulty is alarming. It can have a detrimental impact on your life, and if not addressed can lead to a range of complicated and ongoing legal issues. Which is why it’s important to receive professional advice as early as possible, to explore options and devise the best strategy to deal with any difficulties you are experiencing.
Personal Insolvency is when someone has debts and financial commitments that they are not capable of repaying. In other words, their liabilities exceed their assets and their income.
It’s important to distinguish between temporary financial issues, which may be straightforward to resolve, and a long-term disparity that cannot be easily addressed by budgetary adjustments. Bankruptcy is the most well-known, but there are other less dramatic potential outcomes.
Insolvency law aims to balance the interests of debtors and creditors while providing a structured process for dealing with financial distress. As a combined practice of barristers and solicitors we can act for either debtors or creditors and be engaged in all stages of the insolvency process, from negotiating company voluntary arrangements, to administration and receivership, and liquidation stages.
Corporate Insolvency
Whilst Personal insolvency relates to your own financial situation, if you run a company as a sole trader, then your business and personal assets are essentially the same. You will be held personally accountable for any liabilities accrued by your business. In the case of a partnership, you are jointly responsible for any debt.
When a company becomes insolvent – does not have enough assets to meet all its debts or is unable to pay its debts when they fall due – it must follow an insolvency procedure, such as administration or liquidation. Company directors are responsible for recognising when their company becomes insolvent, and they can be held legally responsible for continuing to trade whilst insolvent.
Financial difficulties can happen quicker than you think and can start with a crisis, for example you could have an unexpected expense or overspend or find that a customer is late paying. You might lose a business contract, or a client you depend on may suddenly change suppliers leaving you in difficulty.
Whatever the cause, Leverets’ team of barristers & solicitors can help you. We have been providing legal advice and assistance in insolvency matters and Company Directors’ Disqualification Act (CDDA) proceedings for over 30 years, acting for a variety of clients and businesses including leading insolvency practitioners appointed by HM Revenue and Customs (HMRC), The National Crime Agency (NCA), and the Pension Protection Fund (PPF).
Get in touch if you would like to discuss any related matter including, but not limited to the following:
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Contact us for a discussion about your situation.
Let us help you explore your options and navigate the law effectively to protect your future.
