My Company is Going Bankrupt – What Should I Do?

As a business owner facing bankruptcy, it can be an exceptionally stressful process to navigate. It’s important that you take the right steps going forward, to limit any further damage that might be done to your business. There are certain steps that you’ll need to take, the most important of which we’ll go through below.

Seek assistance from an insolvency practitioner

If you already suspect that your business is facing bankruptcy, then it’s time to seek assistance from a qualified insolvency practitioner, from somewhere such as Chamberlain & Co. Make sure that the practitioner you choose is registered with one of the two main regulatory bodies – the IPA (Insolvency Practitioners Association) or the Institute of Chartered Accountants in England and Wales (ICAEW).

An insolvency practitioner will be able to closely inspect your company’s financial information, and then based on their findings, suggest a range of potential solutions. If possible, they’ll look to keep your company up and running. However, if you’re facing bankruptcy, this will likely not be possible, and they’ll have to liquidate your business to try to minimise losses to creditors.

The importance of speedy action

With bankruptcy and other similar financial difficulties, it’s important to act fast. Bankruptcy will rarely just hit your company like that – it will often be a slow process, that can be spotted some time in advance. 

It’s important to take action early on; this might mean communicating your situation clearly with creditors – if they feel like they’re involved in the process, they’re more likely to be open to renegotiating repayment terms, if at all possible.

Bankruptcy might not be the only option

While bankruptcy is one of the most commonly talked about solutions to financial difficulties in a business, it’s by no means the only solution. If they believe that there’s a strong chance of success, an insolvency practitioner will always try to keep your company up and running. 

After all, that’s the only way that your business will be able to fully repay creditors if you’re currently unable to do so. It’s important to choose an insolvency practitioner with experience helping businesses in a similar situation to yours, ideally one with a track record of success. 

Understand your legal situation

If you acted in accordance with your duties at all times, it’s likely that you won’t face any legal issues in a personal capacity. However, it’s still likely a good idea to check what kind of position you’re in from a legal perspective, if your company is facing such serious financial difficulties. 

An experienced solicitor will likely be able to let you know if you’re in the clear in no time at all, and it will take a lot of the weight off of your shoulders knowing that the risk is limited to your business, and not directly impacting your personal assets.

If you cover these important bases, you should be able to salvage what’s likely been a stressful situation. By seeking advice from an experienced insolvency practitioner, you’ll be able to find out what path is most suitable for your company, mitigating any further damage that you might cause.