A struggling company typically experiences cash flow problems and creditor pressure because of mounting debts, CCJ’s or in critical situations, a winding-up petition. This can be detrimental to your business.
LMS work with businesses nationwide. With our knowledge and experience we can highlight various types of creditor action. As a result, we can create and implement a bespoke strategy to ensure we preserve the value of your business.
How LMS can help?
Time plays a keys role when a company is under pressure from creditors. A timely restructure maybe appropriate however, in other cases, urgent intervention is required to avoid insolvency. In this instance there are still some options to rescue your business.
Pressure from your creditors can sometimes be unforeseen. It may be that a major contract has been lost which has a sudden impact on your business cash flow leaving your business unable to pay its invoices.
From experience, HMRC are a common creditor for a business. HMRC have several techniques when collecting debt. In some cases, they can seize company assets, where there are no assets to seize, they can issue a winding up petition.
In some cases LMS are able to mediate a Time To Pay (TTP) arrangement with HMRC and other trade creditors.
Contact us today for further information and a free and confidential discussion about your business situation.
What can and can’t creditors do to collect their debt?
Call and write to you in relation to unpaid invoices for repayment as per their terms.
Instruct a debt collection agency or sell the debt on to a third party.
Where a creditor has security over the debt (legal charge over property/assets) the creditor can enforce the security by taking possession.
Providing third parties information surrounding your debts. This includes messages via a family member, friend, or co-worker.
Instructing numerous debt collectors to pursue you for the same debt
Contacting you via social media platforms or in your place of work.
Continual calling (several times per day or more) or what is deemed inappropriate times (during the early morning or late at night)
Insinuating they are taking court action against you personally when the debt relates to your company.
Advising that you could face imprisonment on failure to repay debts; failure to repay debts is not a criminal offence in the majority of cases.
How can you ease creditor pressure?
I have found keeping clear open dialogue with the creditor, ensuring agreed time scales for contact i.e., phone calls letters emails are adhered to, which signs of commitment to repay outstanding debt.
In the first instance it would be advised to request a payment schedule at an affordable level and timescale for repayment.
Alternatively, there are formal arrangements available to you such as Company Voluntary Arrangement (CVA’s). Another option maybe to look at refinancing to repay your debts which we can assist you with.