Bounce Back Loan Servicing

Cost: Insolvency practitioners charge fees for their services, which can add up quickly. These fees are typically paid from the company’s remaining assets, further diminishing the returns for creditors.

• Fees: Their fees are only an estimate and not necessarily what you will end up paying. You could always ask for a full and final settlement figure in writing and see if you get an answer
• Insurance: You may not be able to get business insurance and your current insurance may not be renewed if you have another company.
• VAT: You may not be able to obtain another VAT registration. If you do, H.M.R.C. may require you to pay a significant deposit.
• Finance and loans: You won’t be eligible for any business finance or loans from banks or other lenders
• Tenders: Large companies and local authorities won’t grant tenders to directors of liquidated companies
• Employability: Large organisations including the NHS will not employ you if you have gone through the formal process of liquidating a company. They ask you on the employment form if you have ever liquidated a company.
• Companies House register: Your name will appear on Companies House register as a matter of public record, having liquidated a company
• Liquidation: Liquidation is very stressful and will take between 3 – 9 months if the Insolvency Practitioner goes through the books and records of the company.

They Will…

• Take any funds out of the bank
• Sell any stocks and assets
• Chase any debtors
• Demand the directors return any funds taken from the company in the last 3 years and if they don’t, they will be pursued PERSONALLY

Loss of Control: Once an insolvency practitioner is appointed, the company’s directors often lose control over decision-making. The practitioner’s primary duty is to maximize creditor interests, which may not align with the directors’ vision.

Limited Options: Insolvency practitioners tend to focus on formal insolvency procedures, such as administration or liquidation, which may not always be in the best interests of the company or its stakeholders.

Creditor Prioritization: While creditors must be protected, insolvency practitioners may prioritize certain creditors over others, which could lead to disputes and legal challenges.

Reputation Damage: Engaging an insolvency practitioner can have negative implications for an individual’s reputation. Suppliers and customers may lose confidence in the business, making it challenging to rebuild once the insolvency process is complete.

Complexity: Insolvency procedures are intricate and require meticulous compliance with legal regulations. If not handled properly, the process can become even more complex and costly.