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I saw an Insolvency Practitioner last friday who, after looking at our cash flow, said that we were definately insolvent. As there are minimum assets within the company he said that we couldn't afford to go into voluntary liquidation as we couldn't afford to pay a liquidator's fee (approx £5,000). He said that our best option would be to cease trading, write to all our creditors advising them that we will be striking the company off in three months time, enclosing a Statement of Affairs to show that we had no assets to liquidate. The most we owe one supplier is £5,000 and we owe Revenue and Customers about £2,500: the IP seemed to think that none of the creditors would persue the debt any further, i.e. putting us into Compulsory Liquidation.
This sounded quite simple but in reality it is a VERY daunting prospect as my husband and I (the only 2 directors) would have to deal with all this ourselves.
I phoned the IP to ask his advice about cheques from customers that hadn't been paid into the bank yet and the balances that would be paid for jobs that we had the materials for and could therefore complete: I asked whether we should be paying these into the bank? His ears seem to prick up and said that if we didn't pay the cheques in then these could be used as payment for their fee to liquidate the company properly.
I have two main worries at the moment:
1. Is is worth going down the Voluntary Liqudation route or is the IP just suggesting this as he will be getting paid a fee now?
2. Our bank balance is currently at approx £24,000OD with a facility of £30K- with personal guarantees - my husband has been advised (on a non-professional basis) that we should be putting an invoice in to the company for labour of about £4,000 so that we can pay our own personal overdrafts off before we go into liquidation. I am VERY sceptible about this prospect as I don't want to do anything illegal or don't want to upset the bank as we will be suggesting to them that we are unable to pay back the full amount owing to them as we don't have any personal income or assets. My husband thinks that I am being too cautious and if I don't let him pay a cheque to ourselves then we will be losing out.
I think you know the answer to your first question!
On the second one, the personal guarantee means the bank will chase you personally for the business overdraft. So making the business overdraft bigger to boost your personal finances seems a waste of time to me. You seem to be suggesting that the bank won't pursue you two personally...I'm no expert, but I think they'll try their best. Bear in mind they can force you into bankruptcy if you don't pay, so I'd suggest they have the power here, not you.
I'd suggest you chase up your customer debts to reduce to bank overdraft as much as possible, try to avoid the liquidator's fees, and pay off whichever creditors have the biggest hold over you (probably the bank).
As Maslin states, as you have personal guarantees on the OD you will not be doing yourself any favours maxing it out.
Voluntary liquidation would be your cheapest and easiest route and as you have been told you need to write to all your creditors explaining what you are doing. However if you are going that route, you should not be paying cheques into your account for work you won't be able to complete before the company is liquidated.
IP seemed to think that none of the creditors would persue the debt any further, i.e. putting us into Compulsory Liquidation.
Would take what your IP says with a pinch of salt.. This seriously depends on who your creditors are. A lot of larger companies will have a policy in place that will dictate what action they may or may not take. Some (I know of a few large and small) will automatically chase down every avenue even if it costs them more cash as they like to send out messages to other customers..
Personally I usually let the companies die on their own, but have wound a few up just for the sake of it and made the IP struggle his way through a process because he said a few things I didn't like..
You need to think about it carefully and take on board what everyone is telling you. If in doubt go speak to CAB with all the details the IP is telling you for some other independent advice.
I am hoping that you have still not done anything in regards to the mail that you have posted on 26th January 2010.
The reason why I say this is because I am working with a company that has over 26 years experience in assisting directors with various issues namely things like loans and overdrafts that are personally guaranteed.
Do not lose hope, as in the time that I have worked with this company I have seen incredible things occur, including debts being written off, and it really boils down to knowledge being power. They will give you the initial advice for free, and are able to send a consultant to see you at your home or a place of convenience immediately.
Please let me know if you require this assistance, and I can arrange for a free visit with a expert at the company who is very passionate and has individual experience of over 20 years in dealing with such issues.
Just to add, the company are UK's leading licensed insolvency advisors, meaning they are not insolvency practitioners, which allows them to solely focus on helping you make sure your livelihood is protected.
Get in touch and lets sort this mess out, so that you can get on with living your life.
Voluntary Liquidation or Get Company Struck Off? 
I do wish you would not all take my name in vain!
Just re-read the posts and then twigged....
ASSISTANCE 
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