The effects of COVID-19 on the economy have been particularly distressing for business owners and the increase of late payments has been felt across all industries. Temporary insolvency prevention measures put in place by the Government are due to end in December, coupled with clearing the backlog of court action, it’s likely to result in an influx of companies entering into insolvency in the coming months.
The amount of debt that remains unpaid can have an effect on the methods of debt recovery available to you and at My Debt Recovery, we will work with you to provide open and honest advice regarding the best course of action.
Our main aim at My Debt Recovery is to recover your monies owed through negotiation with your debtors. Our team have an extremely high success rate in recovering debts without legal action, due to their ability to work efficiently and professionally whilst also taking an understanding approach with debtors. The sooner we are instructed the better the chances of recovery.
If your customer or client has entered into insolvency proceedings, what happens now? – In reality there is little more you can do at this stage. However, please still get in contact with My Debt Recovery and we can help to ensure your claim is registered in the insolvency process and include any entitlement to statutory interest and costs.
There are a number of insolvency processes such as,
Company Voluntary Arrangement:
A Company Voluntary Arrangement (CVA) is when a debtor is allowed to restructure in a bid to release capital to pay off debts but can continue trading. Regular monthly payments are made towards any monies owed.
Creditors’ Voluntary Liquidation:
A Creditors’ Voluntary Liquidation is a process that is generally initiated by the directors of a business that cannot pay its bills. This means that the company will cease trading and its assets will be sold. Outstanding debts will then be settled from the money realised from selling the assets. However, in this situation, assets do not often achieve their highest value, due to the need for a quick sell and it is likely that you will not recover the full amount of your outstanding debt if any.
Compulsory Winding-Up Procedure:
As a measure of protecting the economy and businesses against the ramifications of COVID-19, the British Government put a hold on winding-up procedures until 31st December 2020. For debts exceeding £750, a winding-up petition and order can be submitted to the court and if successful, the debtor’s business will be placed into Compulsory Liquidation. After a petition has been issued, a debtor has a limited time to respond before bank accounts can be frozen. If the petition is successful in court, then an official receiver will be appointed to begin the winding-up process. Prior to the submission of a winding-up petition, it is advisable to follow all other methods of negotiation to recover a debt.
Recovering debts from a company, be it solvent or insolvent, can be a frustrating process for businesses, which is why we will always be open and honest about your situation and what methods of debt recovery are available to you, as well as your chances of success. We will work quickly and efficiently, keeping you informed at every stage of the recovery. We work on a no collection, no fee basis and will exhaust all possible remedies so that you can continue to focus on running your business, safe in the knowledge that your money will end up where it belongs.
Pick up the phone to talk to our expert team and discover how we can help you: 0800 009 6106 or drop us an email today: Contact Us