If you do not want to continue running your business or you think it is in difficulty and cannot continue to trade, then you need to get good information about your possible options. One area which you will need to consider is company liquidation. The purpose of this article is to explain in simple language what company liquidation is and when its use might be appropriate.

Liquidation is simply the term used to describe the process of closing a company down. The company's trading is stopped and its assets are sold and turned into cash or 'liquidated'. There are different types of liquidation depending on whether the company to be closed is solvent or insolvent. There are two simple tests to see whether a business is solvent. The cash flow test and the balance sheet test. The cash flow test asks whether the company is able to pay its creditors as and when the debts fall due. If the answer is no, the company is insolvent. The balance sheet test asks if there are more assets than money owed to creditors. If the answer is no, then the business is insolvent.

If the company to be closed is solvent the liquidation procedure to be used is called Members Voluntary Liquidation or MVL for short. Simply put, the members or shareholders of the business decide to close it. The directors of the company have to make a sworn legal declaration that the company is solvent and if assets need to be sold, to pay debts, this must be possible within 12 months. The business is closed and all outstanding creditors paid. Any remaining assets or cash is then the property of the shareholders of the business to do with what they wish.

You may question why a solvent business would be closed at all. There are a number of reasons why this would happen. Perhaps the owner may simply want to close it because they no longer want to run it. May be the company is a family business where the owners / parents have retired and children or family do not want to run the business. Alternatively, a group of companies may need to be rationalised requiring a solvent business to be closed and its assets transferred into another company within the group.

If a business is insolvent and no further investment can be found or other arrangements with creditors cannot be agreed, then action must be taken to close the company. There are two possible types of liquidation procedure in these circumstances:

The first of these is Creditors Voluntary Liquidation or CVL for short. A Creditors Voluntary Liquidation will normally be started by the directors and or shareholders of the business. The shareholders appoint an Insolvency Practitioner who will call a meeting of the company's creditors informing them of the company's insolvency and allowing them to appoint a liquidator of their choice. As such, the liquidation is approved by, and works for, the benefit of the creditors. The Liquidator's prime duty is to sell the assets of the company and distribute any proceeds to the company's creditors. The Liquidator will close the company, cancel any outstanding leases make any remaining staff redundant.

The second type of liquidation where a company is insolvent is called Compulsory Liquidation - more commonly known as Winding Up. The act of Compulsory Liquidation is started by an aggrieved creditor who has not been paid. Such action can be started by any creditor who is owed more than �750 which is not paid after a statutory demand for payment has been issued. The aggrieved creditor will employ a solicitor who asks the High Court to hear the argument why the company should be wound up. This is called a Petition. Notice of the petition must be given to the company. Then if the debt is still not paid, a 'hearing' is held in front of a High Court judge who then passes an order to wind up the company compulsorily. An Official Receiver (or Liquidator if appointed) will then close the company and sell any assets which will then be distributed across all of the company's creditors.

It is important to remember that the question of whether company liquidation is the most appropriate course of action can only be answered after a proper review of a company's circumstances. If as a Director, you believe that your business is in trouble, you should get further advice from an expert as soon as possible.

An important additional note for Company Directors in this area is that you must be aware that you must not continue to allow a company to trade which you know to be insolvent. If your company is eventually liquidated because it is insolvent, the Liquidator will have a duty to review the conduct of you as a Director to ensure that you have acted properly to minimise creditor's losses. If the Liquidator decides that you as a director have acted badly, they can accuse you of wrongful trading. If this is upheld, then you can be made personally liable for the company's debts from the time you knew the company was insolvent. As such, getting the appropriate advice about company insolvency is a must.

Author: Derek Cooper

About the author:
Derek is Managing Director of Cooper Matthews Limited (http://coopermatthews.com), and a member of the Turnaround Management Association UK
Cooper Matthews specialise in Business Recovery Services Advice offering provide straight forward insolvency advice for businesses with financial problems. They have significant experience in working with small to medium sized businesses.


Article source: Free Bankruptcy Articles.

Bankruptcy is a condition that nobody likes to be in but sometimes one cannot control the various conditions like fuel price hikes, inflation etc. that lead to the bankruptcy. Then one can either go for filing the bankruptcy petition or opting for the Individual Voluntary Agreement also known as IVA.

It is a debt resolving method approved by the government and you can apply for an IVA and go through whole of the process with the Insolvency Practitioner (IP). IVAs can help you in avoiding the trauma of filing for the bankruptcy. If your outstanding debt towards three or more creditors is more than �15000 then IVA can be of real help to you. If more than 75% of your creditors agree to the IVA then 75 % of your loan would be waived of and rest you will have to pay in the installments fixed agreed by you and your creditors. There will be no interest levied on the debt that is left after the agreement to the IVA. The monthly installments that you will have to pay will be according to your capacity.

Creditors are normally happy with the IVA settlement as they normally get more money through it than when you go for bankruptcy filing. It is beneficial to the applicant also as you would not have to part with your home or land property. All the installments can be paid through your monthly income. If at some point of time you feel the need for readjustment of your installments then there is a provision for that also. Along with all these benefits, there are other benefits also like there would no official notification issued for IVA like it is done in the case of bankruptcy. That will give you a peace of mind. All you need to do is find a good Insolvency Practitioner and then work out a deal that is good for both the parties.

Author: sturat.mitchel

About the author:
Sturat enjoys writing and sharing articles on topics like ivas and apply for an iva.

Article source: Free Bankruptcy Articles.

Bankruptcy has become a chosen route for more than 1.8 millions Americans to get a debt relief from their overwhelming debt problem, according to the reports found. However, filing for bankruptcy should be avoided seeing it drawbacks that may cause bad impact on your credit history. You should not choose to file a bankruptcy just get a debt relief before you explore other alternative options. There might be a solution to your debt problem other than bankruptcy filing.

Drawbacks of Bankruptcy

Why do you need to avoid bankruptcy? If you have read some of debt relief guides, you will find that most of these guides don't offer bankruptcy as the solution for debt relief. This is because its drawbacks follow you for years. A bankruptcy filing will be remarked in your credit report for 10 years. During this time, you may find hard to obtain loans, mortgages, and credit cards. If you really need a credit during the 10-year period, you may need to go for secured loans which may be more expensive to acquire. Even you are offered with an unsecured loan, you need to pay much higher interest rate than those offered to people with clean credit history; this is to compensate the risk faced by the lenders.

Obtaining attractive low interest-rate unsecured credit card may be impossible because most credit card companies reject applicants who have filed a bankruptcy. You may only be able to get secured credit card which the credit limit depends on the amount you deposited to secure the card. Moreover, secured credit card normally has higher annual fee and the issuer may charge an application fee.

In filing a bankruptcy, all your assets may need to be liquidized for debt payment. However, under the Federal law, some of your assets needed to support you and your dependents can be exempted. Such exemptions may include a portion of your IRA account and other retirement accounts which are subjected in case by case basis. Basically, you will lose most of your asset if you choose bankruptcy as your debt relief solution.

Alternatives to Bankruptcy

Since bankruptcy should be avoided, then what are the alternative options to resolve your debt problem? There are a few options to go for in getting a solution to resolve your debt problem. If you are out of your mind and do not know what can be done other than bankruptcy filing, then try to approach a credit counseling agency and get them to propose to you a few potential debt relief options that tailors to your financial situation.

Alternatively, you can also try to negotiate a payment plan with your creditors. Besides that, you can also get helps from professional debt-negotiation company to perform the negotiation on behalf of you. Most creditors would prefer to get some of the money you owe them rather than get nothing if you file a bankruptcy to erase the entire debt. So, your creditors may accept what you may offer to them through the negotiation process.

Summary

Bankruptcy filing is an extreme option that may seriously impact your future credit worthiness. You should avoid this option by exploring other alternatives for a better debt relief solution.

Author: cornie@debt-consolidation-1stop.info Cornie

About the author:
Cornie Herring is the Author from http://www.debt-consolidation-1stop.info Find more information & tips on alternatives to bankruptcy which will help you to get debt free without bankruptcy filing.

Article source: Free Bankruptcy Articles.

If you are a businessperson or an individual who has to clear off the debt that you have taken from various investors or creditors then a condition may arise where you are unable to pay off your debts. This condition is known as bankruptcy. In the British system it is also known by the name insolvency. In this condition you can file for the bankruptcy status with the court. When granted that status you would be saved from the various demands by your creditors. This will also help you to get a new financial start.

It is not that easy for anybody to file for the bankruptcy as one does not know about the legalities associated with this. One does not know what would be the after effects of the bankruptcy. One should be clear about this fact that filing for the bankruptcy does not always mean that the person is incapable of handling the business or the finances. In recent economic slowdown we have seen many examples of financial giants like Lehmann brothers going bankrupt. It could be all due to the factors that are not in control of a particular person. It might be that recent steep rise in the fuel prices could have lead to the downfall of your business. All these factors lead to the condition of bankruptcy so it should not be always treated as a black spot in your career.

You can take help of the various bankruptcy FAQ that are available on various legal websites or firms on how to go about the bankruptcy condition. From these bankruptcy FAQ's you will get to know that you can either go for the Individual Voluntary Agreement (IVA) or for filling the petition for bankruptcy. In IVA you will pay the creditors as part of the debt in a fixed period of time (maximum five years) from whatever financial resources are left with you. Bankruptcy FAQ's will tell you the details about IVA, bankruptcy petition and how you can approach the IVA through Insolvency Practitioners.

Author: sturat.mitchel

About the author:
Sturat enjoys writing and sharing articles on topics like bankruptcy and bankruptcy faq.


Article source: Free Bankruptcy Articles.

Bankruptcy is a condition that everybody wants to avoid. But sometimes due to poor financial management and sometimes due to the external factors which can not be controlled by the person people find themselves to be in a condition where they have to think of declaring bankruptcy. Most of the people do not know how to go about it or whether there are any other options available. In such a condition the bankruptcy advice is of great use.

First thing to do in such a condition should be to evaluate all of your assets and then find whether you will be able to pay of your loans or a major chunk of it. If such a thing is possible then go for it and ask for the time to pay of the remaining debt. If this thing fails then you should go for Individual Voluntary Agreement also known as IVA. In this you can strike a deal with your creditors where major part of your loan (up to 75%) can be waived off and you would be given five years to pay off the remaining part in fixed installments.

Even if this does not work out then you would have to go for filing the bankruptcy petition. In this many aspects related to your life like finances will come under the radar. All of your assets will be evaluated and your daily requirements to live will be left and rest all will be liquidated to pay off the debts. When this is done the creditors would not have any right to ask you for further money. You would be left over with the necessities like household things, motor vehicle and the things with which you will earn your living. This bankruptcy petition will be published in the newspapers and the gazettes. Normally after a one-year period you will be discharged of the bankruptcy and if you apply for new credit then it will be mentioned that you are a discharged bankrupt.

Author: sturat.mitchel

About the author:
Sturat enjoys writing and sharing articles on topics like bankruptcy advice and bankruptcy.

Article source: Free Bankruptcy Articles.

Often in life, we get a curve thrown at us and the end result is possible repossession of our mobile home. It is important to understand how this works. First thing to understand, how did you finance the mobile home, was it a personal loan or an actual mortgage. Each one is handled differently than the other depending if you were renting a lot or you owned the lot where the mobile home is located.

The first type of loan is when you rent a lot, it is a personal property loan on the unit. The second type of loan is when you own the lot, it is a mortgage tied into the land the home is situated on. With both types of loan options, the mobile home repossession will follow the same basic steps once the loan payments get behind and go into default. The mortgage loan will require pre-foreclosure and foreclosure whereas a personal property loan can result in a mobile home repossession, It is the same as repossessing a car or personal property like a washing machine. There can be extenuating circumstances, it depends upon your state.

Repossession of a mobile home is standard for most states but needs to verified with an attorney before you do anything that can affect you legally. After you have checked with an attorney the following could happen and is good information to have.

1. When the mobile is repossessed, generally the lender will sell it at a public auction. Because you are the loan holder, you will have to make up the difference between the loan amount and the sales price. Often, you can be charged for the repossession fee and legal fees involved. Often the resale value is lower than the loan due to poor resale value of a mobile home. It is not easy to stop a repossession, but to have any chance of doing so, you must take immediate action by hiring an attorney.

2. You could also get hit for the costs of cleaning the unit, any repairs and costs of the auctioneer.

3. Filing for bankruptcy can sometimes help prevent the repossession if you are dealing with an experienced Bankruptcy Attorney who knows the law. You will still be required to pay for it but it could be dealt with like in a Chapter 13 Bankruptcy where you make scheduled payments dictated by the courts.

4. There are times when anyone with their name on the title could be ordered to pay for the deficiency. The lender could also garnish your wages. This is why you need to consult with an experienced attorney to help you out of the situation.

5. If it is located in a rental trailer park, the landlord can have the unit removed for failure to pay the lot fee. The person on the title is responsible for all moving fees.

In conclusion, whether you own the land or rent the lot, if you do not make payments, it will be repossessed. How it is handled should be in the hands of an experienced attorney. If you file bankruptcy, you could possibly keep the mobile home if the Bankruptcy is handled by an experienced attorney for this type of legal matter. It depends upon the laws in the State of residence governing mobile homes and repossessions. For further information about the your rights and about your state's specific repossession requirements, contact your state consumer protection agency or hire an attorney.

Author: Ron Lovell

About the author:
To learn more about your money and credit tips, visit our website at http://www.themoneydoctor23.com or http://www.debt23.com
Ron Lovell is available as a professional speaker to help educate your community or group function on the effects of Financial Stability.


Article source: Free Bankruptcy Articles.