In Short - Liquidation is the process of dissolving a company / business. This involves utilising any assets to pay creditors.
Pre Pack Administration is an arrangement in which the business and its assets are sold prior to an administration.
Creditors Voluntary Arrangement is an option that has started to become more popular of late. Many businesses have started off with a strong core idea , have diversified over the years and found themselves in financial difficulty.
You can only be made bankrupt by an order of the court. This happens when you yourself or usually a creditor, makes an application to court.
If you’re total debts are no more than £5000 and one of your creditors has obtained a County Court Judgement against you, the court, on your application may make an administration order.
This is a good alternative to bankruptcy.
You enter into a legally binding agreement with your creditors (people you owe money to), which enable any debts to be frozen and no further added interest on those debts.
Personal Insolvency Case Study Supporting an individual to pay of £47,000 of personal debt in 5 years Our client, a man in his mid 40’s, came to us with £47,000 of personal debt. He had previously been a director of a company, which had gone into liquidation. That liquidation was handled by another Insolvency company who had not given him much support throughout the process.
We worked with a local business owner whose business was facing cash flow problems and debts of £100,000. The company employed 7 people.
The business essentially a good one, but erratic income exacerbated the cash flow problems, plus there were some internal issues that needed resolving.