Creditor Pressure

Corporate Services

If your business is experiencing cash flow problems and creditor pressure due to mounting debts, CCJ’s or even a winding-up petition, this can cause serious stress which will impact on the running of your business.

However, there is help around the corner and various options available. It is important that you take action now in order to protect your business. Ignoring these issues will only make your situation worse.

At Fortis we deal with many companies nationwide and every case can be different. Our experience can identify the types of creditor action which allows us to implement the right procedure to ensure the survival of your business.

How Fortis can help

You can look to address your cash flow issues by different methods. An increase in sales, repaying company debts via Time To Pay Arrangements with your creditors or trimming some of your business overheads.

It may be that your business requires some restructure whereas some businesses are in desperate need of immediate intervention to avoid a formal insolvency process. Sometimes it’s too late, but there are still a number of formal insolvency procedures that can be implemented to minimise the impact of losing your business as well as rescuing it.

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.

We find that HMRC are one of the most common creditors most business owners face. HMRC have various recovery techniques in collecting debt. They can issue a distraint notice in order to enter your company premises and seize company property which will then be sold at auction to recover monies outstanding to them. If there remain no assets for them to remove, HMRC will usually petition to wind up your company.

In a number of instances Fortis are able to speak to HMRC to provide time for the repayment of monies to HMRC via Time To Pay (TTP) arrangements as well as negotiation with other trade creditors. We have the ability to speak with bailiffs and avoid escalation to the winding up of the company.

Whatever position your business is in, Fortis can assist you in deciding the best course of action to deal with creditor demands and work towards securing the future survival of your business.

If your business is experiencing creditor pressure then you need to take action immediately. The sooner the issue is addressed the more options you have available to you.

Contact us today for further information and a free and confidential discussion about your business situation.

Head in the right direction

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What can creditors do to collect their debt?

In the first instance, a creditor will usually try to call you in relation to unpaid invoices and then to write to you for a demand for repayment as per their terms. Sometimes they will instruct a debt collection agency or sell the debt on to a third party if they become unsuccessful in recovering the debt. If the creditor has security over the debt perhaps in the form of a legal charge over property/assets the creditor can enforce the security by taking possession.

What can't creditors do to collect debts?

Creditors are supposed to act professionally in relation to the collection of debts. They are not supposed to be demonstrating a form of harassment. You may find they will make numerous calls and/or email communications. A creditor can be guilty of harassment under UK law if they carry out any of the following:

  • Continual calling (several times per day or more) or what is deemed inappropriate times (during the early morning or late at night)
  • Instructing numerous debt collectors to pursue you for the same debt
  • Providing third parties information surrounding your debts. This includes messages via a family member, friend, or co-worker.
  • Insinuating they are taking court action against you personally when the debt relates to your company.
  • Contacting you via social media platforms or in your place of work.
  • 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.

What steps can be taken when served with a Winding-Up Petition?

One of the best ways to fend off pressure from creditors is to speak to them and try to arrange a repayment of the debt at a level you can afford. If the offer of repayment terms are reasonable and over a reasonable period, most of the time creditors are willing to agree to an informal repayment agreement.

If creditors are unwilling to agree to a repayment schedule it may be best to seek the assistance of a Licensed Insolvency Practitioner, such as ourselves.

There are formal arrangements available which may assist with your circumstances such as Individual Voluntary Arrangements (IVA’s) or Company Voluntary Arrangement (CVA’s). Additionally, it may be viable for you to look at refinancing as a means to repay your debts.

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