Bankruptcy and Insolvency Solicitors

Insolvency describes your financial situation – being unable to pay debts. Bankruptcy is a specific legal process for dealing with personal insolvency, involving a formal court order. You can be insolvent without being bankrupt, but bankruptcy is one route to resolving insolvency for individuals.

If your business has viable prospects but temporary cash flow issues, restructuring through a CVA or informal arrangement may work. If debts are unsustainable or the business model isn’t viable, formal insolvency (administration or liquidation) is more appropriate. Our Manchester, Sale and Chester solicitors can assess your specific situation and recommend the most sensible route.

Administration is a rescue procedure giving companies breathing space to restructure under an appointed administrator’s control. Liquidation is the process of closing a company and selling assets to pay creditors – it’s the end of the company. Administration aims to improve the outcome for creditors at the same time as saving viable businesses and jobs; liquidation winds them up. Both are formal insolvency procedures but with very different outcomes.

An IVA is a formal agreement between you and your creditors to repay debts over a set period (typically 5-6 years) through affordable monthly payments. It’s an alternative to bankruptcy that lets you avoid some of bankruptcy’s restrictions whilst writing off remaining debt at the end of the arrangement.

A CVA allows your company to reach a legally binding agreement with creditors to repay debts over time whilst continuing to trade. It requires approval from 75% of creditors by debt value and lets viable businesses restructure without entering administration or liquidation.

Bankruptcy typically lasts 12 months, after which you’re automatically discharged (though some restrictions may continue). The initial application process takes 4-8 weeks. However, if you own property or have other assets, the bankruptcy trustee may deal with these for longer to repay creditors.

Your bankruptcy trustee will take possession of your assets to repay creditors. This typically includes property (though some equity may be protected), vehicles worth over a certain value, savings, and investments. Essential items like household furniture, tools needed for work, and a reasonable vehicle are usually protected. Our solicitors can explain exactly what you’d keep in your specific circumstances.

It depends on the type of insolvency. If you’re personally made bankrupt, you’re automatically disqualified from being a director until discharged (usually 12 months). If your company enters administration or liquidation but you’re not personally bankrupt, you can generally continue as a director of other companies, though you may be disqualified from acting as a director for up to 15 years if it is determined that your conduct makes you unfit to be a director.

Act immediately – you typically have only 7 days before the petition is advertised, which can freeze bank accounts. Contact our insolvency lawyers in Manchester, Sale or Chester straight away. We can help you challenge the petition if it’s invalid, negotiate with creditors, or explore alternatives like administration to protect the business. Time is critical with winding-up petitions.

Costs vary depending on complexity. We provide transparent fee estimates upfront and understand the financial pressures you’re facing. For officeholders, we work within the constraints of available estate funds. Contact our team for a no-obligation discussion about costs for your specific situation.