Frequently Asked Questions

1. How quickly can action be taken if my company’s creditors are chasing me?

In many cases, action can be taken immediately to reduce pressure from creditors. Once you seek advice, creditors can often be contacted straight away and requests for payment, enforcement action, or legal threats may be paused while options are explored.

The earlier you act, the more control you are likely to have and the more solutions will be available to protect your business.

2. What happens if I keep trading while my company cannot afford to pay its debts?

Continuing to trade when your company is insolvent can expose directors to personal liability or disqualification. Getting advice early can protect both you and your business. We’ll help you understand your position and the safest next step.

3. What happens if my company can’t pay HMRC?

If your company cannot pay HMRC, it is important to act quickly. HMRC has strong enforcement powers and may escalate matters if arrears are ignored.

In some cases, it may be possible to agree a Time to Pay arrangement or restructure company debts. If the business is no longer viable, formal insolvency options may need to be considered. HMRC is often more open to discussion when approached early.

  • Wrongful trading occurs when a director continues to trade a company when they knew, or should have known, that there was no realistic prospect of avoiding insolvency.

    To avoid wrongful trading, directors should closely monitor the company’s finances, avoid taking further credit if debts cannot be paid, and act in the best interests of creditors. Seeking professional advice early is one of the strongest ways to protect yourself.

  • In most cases, no. A limited company is a separate legal entity, so company debts are not usually your personal responsibility.

    However, creditors may be able to pursue personal assets if you have signed a personal guarantee, breached your duties as a director, or continued trading when you knew the company could not pay its debts.

  • Debt restructuring helps a company manage its debts by negotiating more affordable terms with creditors, often avoiding formal insolvency.

    This may include reduced monthly payments, extended deadlines, temporary payment breaks, freezing interest, or settling debts for less than the full amount owed. The aim is to stabilise the business and allow it to continue trading.

  • In some cases, yes. If a business is viable, creditors may agree to reduced repayments, longer payment terms, or partial settlements.

    If the company is no longer viable, debts are usually dealt with through a formal insolvency process. Once completed, unsecured debts are often written off, although personal guarantees may still apply.

  • In many cases, a guarantor loan does not solve the underlying problem and can increase personal risk.

    If the company cannot repay the loan, you may become personally liable for the full amount. It is important to take advice before using personal borrowing to support a struggling business.

  • Yes, in many cases it is legal to close a company and start a new one, provided you have acted properly as a director.

    There are rules to follow, including not transferring assets for less than their value, not misleading creditors, and cooperating fully with the liquidator.

  • Yes, in many cases directors can buy back company assets during liquidation, provided they are purchased at fair market value.

    The liquidator must act in the best interests of creditors, and in some situations instalment payments may be allowed.