Creditor Pressure

There are a number of ways to identify if a company is under creditor pressure to repay its debts.

A Company will normally be in financial difficulty if Creditors are threatening to take legal action against the company or have already instructed a Debt Collection Agency to act on its behalf.

Should the company not pay its debts or engage with its creditors then this may lead to legal action being taken against the company resulting in a County Court Judgment being registered or a Statutory Demand / Winding Up Petition being served and the company eventually being placed into liquidation.

When a company is in financial distress then each creditor will want to be paid first and you may find that the most aggressive creditors take action fast and first in order to be paid. Steps need to be taken quickly to avoid costs escalating. Business Rescue & Recovery can help you find solutions to these problems.

Creditors cannot pursue personally the company directors providing that the contract entered into was in the name of the company unless of course a Personal Guarantee was provided.

Directors should be aware that there are instances which can result in the Director being personally liable. These are:

• If the Director has signed a Personal Guarantee undertaking to pay the debts if the company fails to do so

• If there is evidence of misconduct or wrongful trading by the Director

Both are serious issues and we recommend you obtain expert advice as soon as possible.

For help on this and other matters please feel free to contact us.