Outcomes in insolvency – what should I expect?
Whilst noting this scenario one of the issues in any insolvency situation be it personal or corporate is recognising the problem and seeking help to resolve it. Usually the earlier you deal with the problem the more options that are available.
I have seen directors whose company's are only several days from being wound up by the courts rescued by the Voluntary Administration (“VA”) process. Whilst the rescue has been possible it would have been easier and less costly had this path been explored much earlier in the crisis. In order to assist people and companies in financial difficulty I thought it might be helpful to explore the positives from a formal insolvency appointment. I’m not saying that it’s an exciting process, as mentioned at my introduction it is a stressful time, however the process does assist people to get on with their lives, viable businesses to survive and those that are not viable to be brought to a dignified end.
Our firms logo is “Light at the end of the tunnel”, an appropriate logo when you consider that whatever the final outcome we usually take away the financial stress for both individuals via the bankruptcy process and companies via Voluntary Administration or Liquidation.
I have seen over many years that stress can lead to family difficulties including the breakdown of relationships.
I look at it on the basis that a debtor or a director of a company might be lying awake at night knowing he or she has a non-viable business wondering how they might extract blood out of a stone to be able to meet all their debts and continue to live and operate their business life etc. Or they might be rueing something that has happened to their company that might have seen it viable but for the issue in question or perhaps the business has grown rapidly and needs parking space from its creditors to survive long term.
When a business survives all stakeholders benefit including creditors, employees the director and his/her family. If it cannot be rescued the positive is at least the bleeding stops, debt doesn’t continue to grow and creditors and the directors can start anew. If a business isn’t viable early identification is also very critical to avoid issues such as insolvent trading.
Over the coming months I will delve into particular case studies to demonstrate how the bravery of an individual or director in admitting they have a problem has assisted all stakeholders to what has been a traumatic period of time for all.
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