What Are the Legal Implications of My Company Going Bankrupt?
Bankruptcy is a legal process of declaring the inability of a company, or an individual to pay their debts to the creditors.
It is an option that you can consider if you do not have any other means to pay back your debts.
Bankruptcy in the UK law does not have a singular process.
In UK, bankruptcy refers to individuals or partnerships, and companies and corporations enter into a procedure known as liquidation.
The basic system, however, is the same, and the term bankruptcy is normally used to refer to corporations as well.
The bankruptcy procedure starts with a petition by one or more creditors.
The creditor must be able to prove in court that the debtor is indeed unable to pay his/her debts.
If you are a debtor, and a petition has been presented against you in court, it can still hold, even if you do not acknowledge your inability to pay the debt.
You can even present a petition yourself in court, if you feel bankruptcy is your only option.
Either bankruptcy petitions are usually presented at the High Court in London or a County Court near your residence.
Then, an Insolvency Practitioner is hired for the entire process who deals with the creditors, and the legal requirements of bankruptcy.
Bankruptcy can have both positive and negative implications.
The main advantage is that you no longer have to deal with the creditors; that is the responsibility of the Insolvency Practitioner.
Thus, it takes the pressure off your shoulders.
The creditors can no longer harass you for repayments.
Also, filing for bankruptcy buys you ample time to repay your creditors.
There are also many negative implications of bankruptcy that might not make it seem like a very attractive option.
Firstly, bankruptcy is not free; the costs of winding up your business can be considerable.
For a small business, it costs around 7,000 pounds, which are payable to the Insolvency Practitioner.
Since the assets of your company will be sold off to pay the creditors, it can have a serious effect on your ability to continue your business.
More often than not, bankruptcy is a death sentence for a company.
Since bankruptcy is not something, which can be hidden from the public, it can ruin the reputation of your company for many years to come.
Bankruptcy can affect your ability to do business for many years after it takes place.
It may be a long time before you can re-build your reputation as a stable company, and attract clients and employees.
While you are bankrupt, you cannot apply for more credit.
Since bankruptcy stays on your financial record, it may be difficult for you to obtain credit, or loans for many years in the future.
It will cause the credit rating of your company to drop significantly.
Thus, it is important that you explore all your options before filing for bankruptcy.
It is also essential that you take help from an expert who can guide you through the entire process.
It is an option that you can consider if you do not have any other means to pay back your debts.
Bankruptcy in the UK law does not have a singular process.
In UK, bankruptcy refers to individuals or partnerships, and companies and corporations enter into a procedure known as liquidation.
The basic system, however, is the same, and the term bankruptcy is normally used to refer to corporations as well.
The bankruptcy procedure starts with a petition by one or more creditors.
The creditor must be able to prove in court that the debtor is indeed unable to pay his/her debts.
If you are a debtor, and a petition has been presented against you in court, it can still hold, even if you do not acknowledge your inability to pay the debt.
You can even present a petition yourself in court, if you feel bankruptcy is your only option.
Either bankruptcy petitions are usually presented at the High Court in London or a County Court near your residence.
Then, an Insolvency Practitioner is hired for the entire process who deals with the creditors, and the legal requirements of bankruptcy.
Bankruptcy can have both positive and negative implications.
The main advantage is that you no longer have to deal with the creditors; that is the responsibility of the Insolvency Practitioner.
Thus, it takes the pressure off your shoulders.
The creditors can no longer harass you for repayments.
Also, filing for bankruptcy buys you ample time to repay your creditors.
There are also many negative implications of bankruptcy that might not make it seem like a very attractive option.
Firstly, bankruptcy is not free; the costs of winding up your business can be considerable.
For a small business, it costs around 7,000 pounds, which are payable to the Insolvency Practitioner.
Since the assets of your company will be sold off to pay the creditors, it can have a serious effect on your ability to continue your business.
More often than not, bankruptcy is a death sentence for a company.
Since bankruptcy is not something, which can be hidden from the public, it can ruin the reputation of your company for many years to come.
Bankruptcy can affect your ability to do business for many years after it takes place.
It may be a long time before you can re-build your reputation as a stable company, and attract clients and employees.
While you are bankrupt, you cannot apply for more credit.
Since bankruptcy stays on your financial record, it may be difficult for you to obtain credit, or loans for many years in the future.
It will cause the credit rating of your company to drop significantly.
Thus, it is important that you explore all your options before filing for bankruptcy.
It is also essential that you take help from an expert who can guide you through the entire process.
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