Steps to take when facing worst-case scenario

1. Talk to friends and family or someone else you trust. Don’t bottle it up. They may help you see things from a different angle and you will need some support whilst you get things back on track.

2. Don’t just borrow more money in an attempt to keep your business afloat. If debts have built up, you need to deal with the underlying problem. Throwing more cash into a financial black hole won’t help in the long run.

3. Don’t just carry on as if nothing is wrong. If you make things worse by ignoring the warning signs, it could lead to legal action against you later.

Hide Ad
Hide Ad

4. Take advice as soon as possible. Delay causes unnecessary stress and usually makes things worse.

5. Avoid unregulated advisers who aren’t licensed insolvency practitioners. You could end up paying unnecessary fees to a ‘middle man’.

6. Choose the right licensed insolvency practitioner to help you. Get recommendations from your accountant or solicitor and meet with two or three before you decide who you’d like to work with.

7. Make sure you’ve explored all your options. Ask your practitioner to explain all the alternatives, so you can make an informed decision about how to deal with your situation.

Hide Ad
Hide Ad

8. Pay cash for new purchases if you decide to carry on trading. It’s important to avoid taking out more credit when you know you can’t afford it.

9. Pay existing creditors fairly. You may be asked to explain why you paid one bill and not another, so don’t favour your friends (or yourself).

10. Keep your problems in perspective! Things are never as bad as they seem. There is less stigma attached to insolvency these days and you’ll come out stronger and more focused.