The right advice, part 2

a man and a woman shaking hands

We recently wrote an article in respect of receiving the right advice.

Subsequent to that article we received an enquiry via our website whereby the director had worries about his company’s finances.  As a result, he had sought advice, we were told, from two other insolvency practitioners.

Below is a summary of the position:

  1. Company liabilities were circa £28K to HMRC.
  2. No Bounce Back loans or other Government Covid support loans.
  3. No overdraft facility.
  4. The principal company asset was an overdrawn loan account of circa £47K.

The director claimed those who previously advised him did not mention that the overdrawn loan account would need to be recovered, if possible, in a creditors’ voluntary liquidation and just focused on the cost of the process.

Having asked searching questions of the director it transpired that, whilst he did not have the cash funds to make good some or all of the overdrawn loan account, he did jointly own a property and his share of the equity was circa £100K. At this point it was explained that should the company enter liquidation and given his equity in property; any liquidator would be duty bound to recover the loan account.

As it transpired, he believed his business was viable and could trade on, particularly if he could just get some breathing space. At this point he was urged he speak with HMRC and seek a time to pay agreement together with exploring the opportunity of realising some funds from his equity in property to try and pay in full or in part the loan account and for these funds to help in paying HMRC’s debt.

At the end, the director expressed his gratitude for the full and frank advice provided and would indeed look to trade on as opposed to the apparent pressure received from others to place his company into liquidation.   Unfortunately, this is one of an increasing number of cases where the advice has been inaccurate or incomplete.  At PBC, we understand the pressures individuals and company directors face and it is imperative they receive the right advice, that includes the wider issues that are all too often overlooked.

If you need honest and frank advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss your situation on 01604 212150 (Northampton), 01908 488653 (Milton Keynes) or email to Alternatively, visit for further information.

What are my rights as a creditor in an insolvent estate?

what are my rights as a creditor

With insolvency cases continuing to rise, it is important that creditors are aware of their rights should a company enter an insolvency process, the steps that can be taken to minimise the debt to be written off and the knock-on impact on their cashflow.
Firstly, it is important that creditors know where they rank in the order of priority. If you supply goods and/or services you will effectively sit at the bottom of the pile if a distribution is made to creditors. In addition, given the bulk of any HMRC claim will be paid ahead of the general body of creditors due to their secondary preferential status, in most insolvencies, any distributable funds are extinguished, leaving little chance of a payment to the ordinary trade creditor.
To reduce the chance of suffering a bad debt as a creditor may require an assessment of your internal procedures.  As part of that assessment, PBC offer the following advice and services, both in anticipation of a customer entering into insolvency or when an insolvency event occurs, including:
1)    Retention of Title Claims:  Assisting you with making any claim or reviewing your current terms.
2)    Explaining, in simplistic terms, the no doubt bewildering specific terminology (which by law insolvency practitioners must use) in reports received and representing creditors in insolvency proceedings.
3)    Provide training to credit control so they understand the different insolvency procedures but, more importantly, can spot the warning signs. As they say “prevention is better than the cure”.
If you require any advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss and advise on your situation on 01604 212150 or email to  Alternatively, visit for further information