For some, the word ‘insolvency’ means ‘the end’ of a business or even a dream. At Kirk’s Insolvency it means ‘business recovery’.
Many people confuse the terms ‘insolvency’ and ‘bankruptcy’ often influenced by the media who also have a tendency to misquote or represent the terms. ‘Insolvency’ describes a situation where a person or a company gets into financial difficulty. A business may owe more than it owns, or it may have run out of cash and be unable to pay bills. ‘Bankruptcy’ refers to a court order against a person (not a company) made under the Insolvency Act 1986. This happens when people are not able to pay their debts and more often than not it takes away most of their property(for example, their house and other valuable belongings) and the money collected from selling these is then shared among the people they owe money to (their creditors).
Running a business that is facing insolvency is very stressful. David Kirk at Kirk’s Insolvency knows that their first insolvency service meeting with the owners of a business will be one filled with questions and charged with emotion; one where he will often act as part insolvency practitioner and part counsellor. But the earlier a business owner deals with the situation, the easier it is.
David Kirk, owner of Kirk’s Insolvency, has helped over 500 businesses in the last 5 years; “Because managing cash flow can be an almost daily headache, it’s easy to miss the warning signs of impending insolvency. A business owner will be juggling demands for payments and overlooking the growing scale of the problem; that’s why it’s important to step back and seek help to assess the situation before the whole business is threatened.”
The easiest way to assess if you need from an insolvency practitioner is to look at the control you have over your financial situation. If you are only making minimum payments on credit cards, are being hounded by bill collectors, use credit cards to pay for necessities and are unsure on how much you actually owe, then an accountant, solicitor or financial adviser will point you in the direction of a business debt specialist.
“When I first meet the owners of a business I know they will have a lot of questions that need answering and they will want assurance and advice to make sure they are not making the situation worse” David says, “Experienced licensed insolvency practitionersaim to make sure that their clients are very clear on the options available to them and ensure they make right choices to improve their circumstances. Sometimes the advice can even help them save their business – if they come to me early enough.”
One of the first tasks that any insolvency practitioner undertakes is helping to take the pressure off. The earlier the process begins the better; the pressing creditors will communicate directly with the insolvency practitioner, who will also act as an impartial mediator to negotiate with creditors.
David explains; “If your number one objective is to save the business and the jobs of your employees, then I help a client to achieve that.The area of business debt management is complex, especially where creditors such as the HMRC, bank, bailiffs and retention of title suppliers all have differing legal rights. The whole area is clouded in confusion and so the earlier a business owner looks to deal with the situation, the easier it is to sort it out at our end.”
For more information on Kirk’s and how they could help you and your business, contact David Kirk.