Creditors Insolvency

Thinking of a Creditors Insolvency? What Are The Options?

Creditor’s insolvency might describe where a creditor takes action against a debtor in respect of debts owed by that individual or company. The action taken by the creditor, to recover what is due might be by way of service of a statutory demand. The effect of not complying with a statutory demand when served can be very significant for both individual and company alike.

For an individual, the failure to satisfy the demand or to apply to set it aside can mean that a bankruptcy petition can be issued. The statutory demand is a favoured method used by debt collectors, but is one that rarely results in a petition being issued, as they are unwilling to spend the money taking bankruptcy proceedings, without a guarantee that they will recover the debt, so they use the petition as a debt collection tactic.

For a company to receive a statutory demand can be a much more onerous proposition. In the majority of cases it cannot be assumed that the entity serving the statutory demand will not proceed to serve a petition also, especially where the creditor is the Crown, which will not worry about the cost of issuing the petition. The key thing when receiving a statutory demand of any sort, but especially one for a company, is to take swift and decisive action and call us.

We will be able to advise you what to do and how to do it if you are faced with the possibility of a creditor’s insolvency. However a creditor seeks to recover what is due to them, if you cannot pay, that is a sign that you may be insolvent. Creditors are often more sympathetic to requests for time to pay or compromises with debtors if an early and truthful dialogue is started. If you are reluctant to make the first move, we can do that for you, by negotiating with your creditors to put rescue structures in place.

If you would like to talk about creditors' insolvency to a specialist with 17 years corporate insolvency experience then enter your details into the web form below for a no-obligation chat.

However, if you need help with personal debt (rather than business related debt) go to our free debt management plan application form.

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