It is the worst feeling in the world, when you realize that the debts seem to be mounting for your business and you don’t have any way of paying them back. It is enough to send owners and directors into a tailspin. However, when you are worried about insolvency, there are some things that you can do that can hopefully, help you turn things around. Principle Insolvency is here talk about some of the steps businesses can take when insolvency is a worry.
Steps Businesses Can Take When Insolvency is Looming
There are several things that can be done to help a business that is facing insolvency.
– Sell Assets: One of the first things that a business should do is look at the assets you have and sell what you can. This money can be used to pay off debts you don’t have the ability to pay back. Some creditors may be willing to work with you when they see that you’re serious about paying back your debts.
– Negotiate: Sometimes, you can negotiate with your creditors. There are arrangements that might be made to help you. This could include things like more time to pay back the debt, lower your interest rates, and charge fewer penalties.
– Contact Inland Revenue: If you are in a situation where your business has unpaid taxes with Inland Revenue, you may be able to negotiate with them as well. Contacting Inland Revenue is important as this can help you avoid extra penalties and help you get the debt paid off.
– No New Debts: It is important that you don’t take on any new debts when you’re in trouble. If you’re working to consolidate debts, you don’t want to take on any new debts. You should always speak with a professional before consolidating any of your debts, because sometimes they aren’t structured in your favor.
– Appoint an Insolvency Practitioner: If you are failing as a business, working with an insolvency practitioner can be helpful. They will help you navigate the process and let you know what all of your options are moving forward. They might work to help you restructure your debts, sell your assets, build new repayment plans, and more which can help give you more time. This can be incredibly valuable.
Outcome Depends on Business
What happens to a business in trouble depends on the type of business. If the business is a company, it will more than likely move into liquidation. If the business is a sole trader or partnership, it will become bankrupt.
Insolvency Services in Auckland, Hamilton, Levin & New Zealand Wide
If your business is in trouble, you can turn to Principle Insolvency to help you sort out all of your options to ensure you have all the information you need to make an educated decision moving forward. We will help you navigate this difficult situation and work to stop you resolve it in the more beneficial way possible. Call us today!