Archive for September, 2009

Bailiffs and debt collectors

 If you owe someone money, they may try to collect the debt using a bailiff or debt collector. If these people contact or visit you, you need to know how to deal with them, and what your rights and obligations are. continue

This information is designed to help you understand what debt collectors can and cant do and make it easy for you to complain. Dealing with debt collectors can be very stressful. You don’t know what they can and can’t do and what they can and can’t say. Debt collectors rely on this to get away with activities that are often illegal or questionable. If no one complains they’ll keep getting away with it! continue

There are a number of ways to do debt a consolidation. The basic idea is to replace some or all of your debt payments with a single regular payment. A single regular payment is often easier to manage and you only need to have dealings with one entity rather than a number of creditors. You could end up paying less due to a lower interest rate or no interest. continue

Debt Consolidation a SCAM? Video Most debt consolidation companies do nothing better than simply ruin your credit score in order to settle your debt.  Whatch this very inportant video and see how you can do this your self and save £ thounds of £’s Just watch this vedio CLICK THIS

 Who is the official receiver?

Official receivers are civil servants in The Insolvency Service and are officers of the court. The court notifies them about a bankruptcy. Your local official receiver is responsible through his or her staff for administering the initial stage, at least, of your insolvency case. This stage includes collecting and protecting any assets and investigating the causes of the bankruptcy. continue

About company receivership

A company is usually placed into receivership by a secured lender (usually a bank or a financial institution) who holds a registered charge or mortgage debenture however in rare circumstances; a Court can also appoint a company receiver.

A company receiver is generally appointed to ensure repayment of the charge or security holders outstanding debt and the receiver achieves this by taking control of company assets and selling all or part of the assets subject to a charge.

The company receiver reports and accounts directly to the secured lender and must pay any money recovered from the company’s assets to the secured lender. The only exception to this is that in certain circumstances the company receiver is required to pay employee entitlements before payment to the charge holder.

In short, the company receiver acts in the best interest of the secured creditor – not the unsecured creditors.

A company receiver is not required to liaise with general unsecured creditors but is required to lodge a Report as to the company’s affairs with the courts within 30 days of his appointment as receiver.

Further, the company receiver must take reasonable care to ensure market value or the best price reasonably obtainable is achieved for the sale of company assets.

A company receiver usually has very extensive powers and in most cases when a company goes into receivership a company receiver will have the power to:

• trade-on the business with a view to selling it as a going concern; or
• break-up the business and sell individual assets.

The directors’ powers are suspended on the appointment of a company receiver and the receiver will assume total control of the company. A director will not be able to run the company any in any way after a company receiver has been appointed.

A company can be placed into liquidation notwithstanding a company receiver has been appointed, however, the receiver will have full control of the company and its assets notwithstanding the liquidators appointment.

If the secured creditor is paid out in full, any surplus is payable to the liquidator. If no liquidator had been appointed the surplus, after the secured creditor has been satisfied, is paid to the company.

For more information about company receivership, contact the Directors Helpline on 0845 430 7676 today.

Can A Company Continue Trading If It Is Insolvent?

Directors must acknowledge their responsibility and take positive action when there are doubts as to the solvency of the company.

If a director fails to prevent the company from incurring debts and liabilities at a time when the company is insolvent, the director can become personally liable for the debts incurred.

  What Is Liquidation?

A company is a legal entity just like you and I are, so it is a different legal person from it directors and shareholders. It is very common for most people to think that the directors are the company or the share holders are the company. If you own shares in IBM that does not mean you are IBM. Same if the people who run IBM the directors do not own the company, the directors are officers of the company. A company is a legal body. A company "dies" when it is dissolved and is no longer on the register of companies. The most important method of dissolving a company is through liquidation. Liquidation is final and the company will not be in existence after the liquidation comes to an end.

How Do Liquidations Work?

First of all you need to understand the separate types of liquidation available

1. Members/Shareholders Voluntary Liquidation
2. Creditors Voluntary Liquidation
3. Compulsory Liquidation

The shareholders voluntary liquidation is where a company goes into liquidation when it knows it can not continue to trade or it has no further business to attend. This is normally at the instructions of the shareholder and or directors of the company. An insolvency practitioner is appointed by the members to liquidate the company’s assets and pay any liabilities out of the processed.

The creditors voluntary liquidation is where a company is insolvent i.e. it cannot pay its debts as and when they fall due and is forced into liquidation. An insolvency practitioner is appointed liquidator by the members/creditors.

A Compulsory Liquidation is where a company is forced into liquidation by one or more of its creditors (for none payment of debts) or the Secretary of State appoints a liquidator over the affairs of the company.

How Are The Different Types Of Liquidation Used? 

The member/shareholders liquidation is used generally to re-structure assets, group of companies, or to release capital. International Corporations have thousands of companies that have been registered to deal with certain business. If that part of their business has been re-organised the company that owned it has to go. A members liquidation is the normal way of restructuring companies, assets and so on….

The creditors liquidation (where a company is insolvent) is generally forced upon the company as it can not continue to trade either because the directors believe that they cannot continue or a receiver was appointed over the assets of the company or a creditor sued the company for his/her money.

What Happens In A  Liquidation?

When a company is in liquidation a liquidator is appointed to run the affairs of the company in order to close it down. The appointment of the liquidator has the effect of removing the directors from office and the liquidator is the authorised person who can deal with any assets, liabilities, bank account and employees of the company. Once the appointment of the liquidator is made the directors cannot run the company. The only person who can is the liquidator and the persons specifically authorised by him can mange the affairs of the company.

What If I Don’t Liquidate My Company?

You as a director can be held liable for any debts your company incurs once the company becomes insolvent. If you know or believe that your company is not going to able to meets its debts and you continue to trade, it is very important that you seek legal advice immediately before you continue any further. You can phone our FREE directors confidential helpline on 0845 430 7676. Don’t let your business disaster become your personal disaster! Don’t delay act now.

What Is A liquidator?

The Insolvency Act 1986 specifies that a person in order to be a liquidator has to be authorised by the Department of Trade and Industry (DTI). These people are know as Insolvency Practitioners they normally come from a professional background such as accountancy or legal.

The liquidator must have suitable indemnity (insurance cover) and must follow ethical, technical and other recommendations adopted by his Professional Body, or by the DTI. There are currently about 2000 Insolvency Professionals who can be appointed as liquidators.

How Does A Liquidator Get Appointed?

The liquidator is appointed by the following persons.

• Member/shareholders of the company
• Creditors of the company
• The Secretary of State

If in the event it was a forced liquidation via the courts and the official receivers office appoints a liquidator the creditors can appoint another liquidator of their chose.

Who Can Put The Company In To Liquidation?

A company can go into liquidation by the members of the company, the creditors of the company, or by the BERR (Government Body) formally known as the DTI.

With the introduction of the 1986 Insolvency Act one of the most popular method of liquidation is the voluntary liquidation either member or creditors.

How Does A Members Voluntary Liquidation Work?

A members voluntary liquidation means that the shareholders would get their capital or the assets that the company owns will be disposed. This has taxation implications.(Income Tax and Capital Gains Tax) Professional advice is therefore required from your accountant regarding the tax position of the company and the tax position of the individual shareholders.

How Does A Compulsory Liquidation Work?

Where a creditor proceeds against a company to realise his debt and the company is unable to pay its debt the company is placed in to liquidation by the court. The creditor must be owed more than £750 and he must have given 21 days notice to the company via a statutory demand.

If the company is liquidated by the court the liquidator is the Official Receiver a government employee. If the company has assets the Official receiver calls for a creditors meeting at which meeting an Insolvency Practitioner is appointed liquidator, to realise the assets and then distribute the proceeds to the creditors.

What Is A Creditors Voluntary Liquidation?

A creditors voluntary liquidation is a liquidation where the company is insolvent i.e. it is unable pay its creditors.

The directors pass a resolution that the company can not continue to trade and call for a members and creditors meetings to be held. The meetings decide upon the liquidator, liquidation committee and other relevant matters specific to the company, and the company entered into liquidation.

The documents required to be produced at the members and creditors meetings are the Statement of Affairs (detailing assets and liabilities of the company), A deficiency account, Statutory information, and history of the company with an explanation of the deficiency and the reasons for failure. The creditors can request further explanations if they so wish.

In most cases the directors are assisted by an Insolvency Practitioner in preparing the above statements and generally organises the meeting, letters, notices, advertising, etc.

What Is A Creditors Meeting And What Happens?

At the creditors meeting the statement of affairs, history and explanations are produced at the meeting, and explanations are given on specific matters.

It is customary for the chairman (company director/s) of the meeting to answer questions from the creditors present regarding the affairs of the company. The formal part of the meeting is to appoint an Insolvency Professional as liquidator of the company and the appointment of a liquidation committee. This is done by voting by value of debt. Persons that have security and wish to vote at the meeting they must either relinquish their security or value their security and vote only for the unsecured part.

What’s A Liquidation Committee?

The liquidation committee is a Committee of creditors with a minimum number of 3 and a maximum of 5 who receive information from the liquidator and sanction his actions.

What Are The Duties Of The Liquidator?

The main duty of the liquidator is to realise the assets of the company and pay its creditors a dividend if funds are available.

Another important aspect of the liquidation work is to investigate the company’s affairs and recover any assets that are missing, or have been transferred at undervalue out of the company. These transactions can be reversed by the liquidator.

He must also report on the directors conduct to the BERR (Government Body) Business Enterprise & Recovery Reform.

For More Information And Advice Call 0800 24 0800

With the credit crunch effecting everyone property repossession cases are back in the headlines again and dominating the bankruptcy courts’ dockets as they did in the early nineties, but they continue to be filed with great frequency in UK. At its essence, the property repossession is a two party dispute between mortgagee and mortgagor. Repossession cases are typically filed before or after a bankruptcy. Upon learning of the bankruptcy filing, a secured creditor has a number of available options, all or some of which are exercised, depending on the facts of the case, to maximise loan recovery. continue

 What do they mean? This is a brief explanation of some of the terms you may come across in insolvency proceedings. Please note that this glossary is for general guidance only. Many of the terms have a specific technical meaning in certain contexts that may not be covered here. continue

Our Business Finance consultants have assisted clients with all their fund raising needs. Our range of services in this sector, inter alia, include: continue

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No. This is very rare and only after certain bankruptcy offences such as hiding assets from the Trustee.

Yes, you can convert an IVA (e.g. you cannot meet the obligations of your payment plan for whatever reason) to a bankruptcy. You should be aware that in doing so you may lose some of your property.

In bankruptcy, co-signors are not protected by the automatic blocking of your creditor’s collection efforts; creditors are free to go after your co-signer(s).