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What Are The Warning Signs Of Insolvency?

Last updated: August 6, 2021

The quick answer

The first indication that you are insolvent is often when your creditors, such as suppliers, the bank or HM Revenue and Customs, start chasing you for money and you realise that you cannot pay.

In more detail

How To Spot The Warning Signs Of Insolvency

One common problem I come across as a Licensed Insolvency Practitioner is where a bookkeeper holds back the bad news from a business owner/director who does not have a complete understanding of the finances. Do not let this happen to you. The sooner that you deal with financial problems the best chance you have of surviving them. To avoid insolvency, make sure you know the reality of what you owe and to whom and when it has to be paid by.

The typical warning signs of the onset of insolvency are:

  • Suppliers sending you increasingly threatening letters.
  • The bank bouncing cheques.
  • HM Revenue and Customs threatening liquidation, bankruptcy or to send in a bailiff.
  • A landlord threatening to distrain (which means take your assets).
  • County Court judgements and letters from the Courts.
  • Receiving a 21-day statutory demand (which must be dealt with within 18 days of service).
  • A winding-up petition or bankruptcy petition being served on you giving a date that you have to be in Court.
  • HP and lease companies repossessing vehicles and equipment.

Typically, business owners put ‘their heads in the sand’ and don’t want to face the reality of the situation. They do not want the embarrassment of failing or are afraid to tell employees, suppliers or even family.

Unfortunately hiding from the problems do not make them go away. Dealing with them and looking at what can be realistically achieved is the best option in all cases.


If you are worried about insolvency and want to get the best advice from an independent firm, contact us today. We can help you find a positive outcome.


If you need insolvency advice the earlier you talk to someone like us the better as you will have more options. We can help, contact us today.

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Author: David Kirk - ACA FABRP
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Just a quick email to say a heartfelt thank you for your very calm, considered, expert advice regarding my circumstances on Tuesday. Things looked bleak before you explained my options much more clearly, in simple layman’s terms.
Rob Elliott (14th December 2021)



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David Kirk

Licensed Insolvency Practitioner