Archive for November, 2009

WINDING UP PETITION

Wednesday, November 18th, 2009 at 0  

WINDING UP PETITION

winding up petition

WINDING UP PETITION AND THE CONSEQUENCES

 
If you have been issued with a winding up petition for your company because the company owes money. You can pay the money owed before the court date and get the case droped or fight it if you believe it to be worth defending. On the other hand if you do nothing and the debt is not paid following the presentation of the petition, then the court will make a winding up order (“the order”) against  your company.
 
As it’s a court led procedure, various rules come into play once the petition has been presented. 

The presentation of a petition has serious consequences for the directors and the company, but before we go any further let me give a a case study of what can be achived with professional advice.

 

In Times Of Financial Crises, Taking Early, Independent Advice Is Crucial

 
Case Study
 
Company "A" had 38 retail stores selling household furniture with sales declining daily and unable to pay its bill as they fell. The company was presented with a winding up petition due to unpaid Inland Revenue and VAT debts.
 
 The company had a combination of freehold and leasehold stores in prime retail sites across the country. The company employed a workforce of 260 people on its payroll. A final decision had been made to place the company into Administration before the petition date for this we needed permission of the courts which we obtained on the grounds that there was a better chance of greater dividends going down the administration route than the winding up and compulsory liquidation route for all the creditors and the employees of the company. The courts accepted the plan and gave us 6 weeks to come back and report further progress.
 
Within the 6 week period deep cuts were made to staffing numbers and closure of stores that were not profitable. 11 stores were kept and the rest were sold or leases terminated, the 11 stores were the ones that were making good profits and allowed the company to grow without the losses which it had been getting every trading day before the administration order
 
By the time we had restructured the company the creditors all agreed to accept £0.40p in every pound owed which allowed the company to continue trading more profitably.
 
The above case demonstrates what can be achieved if experts are brought into the picture earlier rather than later on in the winding up process.  Now back to further information about winding up petitions and some of the consequences.

 

The presentation of a petition has serious consequences for the viability of your company and these are detailed below:

Protection of assets between winding up petition and order

Once the petition has been presented, a date is set for a court hearing at which the petition will be heard and a winding up order made against your company. A considerable time may elapse between the presentation of the petition and the hearing for the making of the order.  
 
You should make use of this time to seek professional advice on the options open to you and your company, you can call the business helpline on 0800 24 0800 for free and confidential advice before it’s to late.
 
In general, your company should be allowed to continue to trade in that period but the creditors need to be protected against possible disposal of its assets. Your actions as a director are therefore under great scrutiny in this period of time and the ability to trade effectively can be impaired due to the impending hearing being at the forefront of your mind.
 
Invalidation of disposal of assets
 
Unless the court orders otherwise, any disposal of your company’s property, alteration in the status of its members or transfer of shares after the commencement of the winding up is void. The purpose of this provision is to preserve the value of the assets of a company for the benefit of persons interested in those assets.
 
Provisional liquidators
 
At any time after the presentation of the winding up petition the court may appoint the Official Receiver or an insolvency practitioner to be the provisional liquidator of the company.  The primary reason for such appointment is usually to safeguard the assets pending the winding up hearing. Since an appointment anticipates the making of a winding-up order this appointment is usually made only with the consent of the company itself or in a clear case of insolvency.
 
Compulsory liquidation takes away control from you as a director of the company and it is important for you to take control of the situation and be in control of your own destiny. 
For more information visit www.windinguppetition.com or http://www.windingup.org/insolvency/winding-up-petition.html  
 
IF YOU NEED FURTHER ADVICE YOU MAY CALL OUR OFFICE ON
0800 24 0800
 

Moe Nawaz – Author – Speaker – Insolvency Auditor - Business Coach 

Enforcing Court Judgement

Saturday, November 14th, 2009 at 0  

Court Orders

Enforcing Court Judgement

If a court has decided that someone must pay you an amount of money (judgment) and you have not received it, you may want to ask the court to enforce the order.

First of all you should read the guidance called I have a judgment but the defendant hasn't paid – What can I do? (Leaflet EX321). It explains what is available to help get your money for you (called 'enforcing your judgment'), and which of the methods of enforcement available is likely to be most successful in different circumstances.

You can try to get your money by asking the court for any of the following:

  • A warrant of execution (Leaflet EX322) – sending a court bailiff to collect the money.
  • An attachment of earnings order (Leaflet EX323) – stopping the money from the defendant's wages.
  • A third party debt order (Leaflet EX325) – freezing the defendant's money that is held, for example, in a bank account; or
  • A charging order (Leaflet EX325) – the money is paid on the sale of the defendant's house.

You can also request that the defendant is called into court for an Order to obtain information (Leaflet EX324). This is not a method of attempting to retrieve the money owed, but an interview to discover information about the defendant's financial situation.

 

Moe Nawaz – Author – Speaker – Insolvency Auditor - Business Coach 

How Long Will MY Bankruptcy Last in UK?

Tuesday, November 10th, 2009 at 0  

How Long Will MY Bankruptcy Last

Bankruptcy Lasts for 12 months normally

With personal bankruptcy there are Several factors affect the length of your bankruptcy in UK. Your bankruptcy ends when you receive a discharge, the event that actually cancels your debts.

Most bankrupts in the UK are eligible for discharge after the minimum period of 12 months. Your bankruptcy will last for more than 12 months if the bankruptcy court orders your bankruptcy extended.

Here are the conditions that could prolong your bankruptcy:


Do you have surplus income?

If your income is considerably higher than the limits set by the government, it is possible that your bankruptcy will be extended for longer than 12 months.

Is this your first bankruptcy?

If you have been bankrupt before, you are not eligible for an automatic discharge from bankruptcy in 12 months. Your bankruptcy will be extended for a period of time that will be determined by a Judge or Registrar of the bankruptcy court.

Have you completed all your duties as a bankrupt person?

If you have failed to complete one or more of your duties in bankruptcy, then your discharge will be delayed. The delay will depend on the seriousness of the failure and how soon you complete the missing duties.

If your discharge opposed?

The discharge is usually granted if you are earning only enough income to keep yourself and your dependents reasonably provided for, and if you have received credit counseling.

Occasionally, creditors or the trustee Bankruptcy oppose a bankrupt’s discharge. When this happens, the matter goes to mediation or is heard before a Registrar or a Judge.

 

Moe Nawaz – Author – Speaker – Insolvency Auditor - Business Coach 

Coping With Financial Stress

Tuesday, November 10th, 2009 at 0  

Financial Stress 

Financial Stree in business

One of the most common side effects that people experience when trying to cope with their debt problems is financial related stress. Stress is defined as “physical, mental, or emotional strain or tension” and is brought about by a large range of factors including relationship break-up, problems at work or, in this case, debt.

Financial stress
Financial stress is common if you are in a position where you are concerned by the level of debt that you have. The signs of stress are varied and stress can manifest itself in both emotional and physical ways. Some of the most common signs of stress are: headaches, irritability, aches and pains, sleep problems, nausea and feelings of apathy or anxiety.
These feelings brought on by stress can also cause you to make poor financial decisions. These poor decisions can lead to increased debt and can start a vicious cycle of stress and anxiety that seems as if it is never going to end.
When you reach this point, your feelings of helplessness and hopelessness can become so overwhelming that you may literally be unable to function correctly in the real world.
Recognising the problem
One of the key stages to coping with financial stress is to recognise that the problem exists. If you recognize any of the above traits in yourself then it is time to act and to get the help you need.
The well being of you, and your family, is your priority during times of financial stress. It is vitally important that your well-being takes priority as ensuring that you are taking care of yourself is the only way to ensure that your family will be taken care of also.
The most important thing to realise, understand and accept is that no situation is completely hopeless.  By recognising that you are stressed you can take steps to tackle the problem with the guidance and help of family, friends and experienced debt professionals. This is the crucial first step on the path to dealing with the stress you are under.

How to get help

If you are experiencing financial stress the worst thing that you can do is bury your head in the sand. It is important that you can find someone to talk through your financial problems with, whether that is a friend, loved one, your doctor, or a debt counsellor.
Similarly, if you know someone that is showing the outward signs of stress then try talking to them and to get them to open up about their financial problems.
There are many debt counselling services available in the UK that offer free, confidential advice to help you cope with your debt problems. Whether you need advice and help with personal budgeting, the use of credit cards and loans or arranging a plan to repay your debts there are services nationwide which can help.
Priorities
One of the best ways to cope with financial stress is to set out a list of your priorities. Either on your own, or with the help of a debt counsellor or turnaround consultant you can identify which issues are causing the most stress and prioritise solutions accordingly. You may have certain debts which are more problematic than others, or you simply might not be able to deal with all your individual creditors.
By establishing what it is that is causing you most stress it is possible to set a priority list and tackle them in order of importance.
 Coping with financial stress can be difficult but it is important to remember that no problem is insurmountable. By talking over your concerns with friends, family or a qualified debt counsellor then you can begin to recognise your problems and come up with solutions.

Moe Nawaz – Author – Speaker – Insolvency Auditor - Business Coach 

WHO GETS PAID FIRST IN THE CASE OF A COMPANY IN LIQUIDATION?

Tuesday, November 10th, 2009 at 0  

The order in which payments are made is fixed by statute. The general rule is that the creditors are paid in the following priority:-  

(i) Secured creditors holding fixed charges such as a bank lending money backed by a mortgage on land and buildings (and sometimes fixed plant) typically bargained for taking less risk. Assets of the company usually back the credit that they extend. They know they should get paid very early on the list if the company is liquidated. They will only receive payment to the extent of the value of the asset that is subject to the charge. They will have to prove as unsecured creditors for the excess if there is a shortfall.  

(ii) Preferential creditors. These are creditors particularly government/crown departments who are statutorily preferred in the order of payment.  

(iii) Floating charge holders. These differ from

(i) above (fixed charge holders) in that fixed charges relate to specific assets such as land/buildings/fixed plant and machinery. Fixed charges only relate to specific named assets. Floating charges "crystallise" on assets which are held by companies from time to time, e.g.  of perishables. They are typically taken by banks and other lending institutions in conjunction with a fixed charge as outline at (i) above.  

(iv) General creditors, such as suppliers of goods and services, and other lenders have a higher priority for recovering their losses than shareholders.  Shareholders own the company, and take greater risk. They could make more money if the company does well, but they could lose money if the company does poorly. The owners are last in line to be repaid if the company fails. Insolvency laws determine the order of payment.


Moe Nawaz – Author – Speaker – Insolvency Auditor - Business Coach 

WHAT IS A CCJ

Tuesday, November 10th, 2009 at 0  

County Court Judgement CCJ

County Court Judgement ccj
The purpose of a County Court Claim
 
If you have received a CCJ the chances are that it is someone you owe money to (a 'creditor') can take a County Court action against you to claim the money. If you pay the amount outstanding, you can avoid a hearing or judgment. If not, there'll be a simple court hearing in private. You can attend if you wish, or just send the information the court asks for by post.
 
The court doesn't find anyone 'guilty' or 'innocent'. It looks at the facts and decides whether you owe any money, and if so, how you should repay it.
 
 
After the court hearing, the court may issue an order saying you must repay the debt. This order is called a CCJ and will either be for the amount agreed between you and your creditor or, if you can't agree, a payment set by the court.
 
If you have judgments from more than one creditor, the court can combine your debts and make an 'administration order' – saying you must make a single payment every month to be shared by all your creditors.

Moe Nawaz – Author – Speaker – Insolvency Auditor - Business Coach 

How To Keep Your Debt Under Control

Monday, November 9th, 2009 at 0  

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