Most often this means equity in a property — and that changes the conversation.
Bankruptcy becomes a real, costed comparison, not an idle threat.
Alongside the same means assessment used in every case, we prepare a bankruptcy comparison — a worked calculation showing what bankruptcy would actually recover, set against a negotiated settlement. The figures below show why a fair settlement so often works out better for everyone, including creditors.
This is a longer, more detailed process — engaging early matters even more here.
HOW THIS TYPICALLY WORKS
Alongside the bankruptcy comparison below, we ask you to complete the same full means assessment as every Director in this position — income and expenditure, supporting bank statements, and a schedule of your assets and liabilities.
This is the same starting point as every case, regardless of what you own.
The same starting point as every case.
We prepare a costed, worked calculation setting out what would actually be recovered if the Liquidator petitioned for your bankruptcy and a Trustee realised your assets — set against a negotiated settlement figure.
You can see a full worked example of how this is typically structured further down this page.
Real numbers, not a guess.
Statutory and professional costs — the petition, court fees, the Official Receiver's fees, the Trustee's remuneration, valuer and legal fees — are all deducted before creditors see anything.
Those costs are often substantial relative to the equity involved, which is the whole reason this comparison matters.
Costs come off the top, before anyone is paid.
Because bankruptcy costs materially erode the headline equity figure, a fair negotiated settlement very often produces a better outcome for creditors than pursuing bankruptcy through to conclusion.
Bankruptcy also takes time — and in that time, mortgages often stop being paid, eroding the position further. Conduct reporting to the Insolvency Service proceeds either way.
This scenario typically takes longer — an early conversation matters even more.
The figures below are illustrative only — they're not a reflection of any actual case, and not a quote. They show the kind of analysis, on your own actual figures, that sits behind any settlement figure we'd consider accepting.
Before anything else, we need a realistic net equity figure — market value less the real costs of actually selling, not just the outstanding mortgage balance. Where a property is jointly owned, only the Director's share counts.
| Property in Sole Name | Property Jointly Owned | |
|---|---|---|
| Estimated market value of property | £400,000 | £400,000 |
| Less: mortgage balance outstanding | (£325,000) | (£325,000) |
| Less: mortgage redemption fee (est) | (£1,500) | (£1,500) |
| Agent / valuer fees inc VAT (est. 1.5% of market value) | (£7,200) | (£7,200) |
| Less: legal fees inc VAT (conveyance, undertakings, possession) | (£4,200) | (£4,200) |
| Less: 50% third-party interest | NIL | (£31,050) |
| Estimated net equity | £62,100 | £31,050 |
These costs are deducted before creditors see a penny — and they don't shrink just because the equity involved is smaller.
| Property in Sole Name | Property Jointly Owned | |
|---|---|---|
| Statutory demand | £600 | £600 |
| Bankruptcy petition and legal fees inc VAT | £4,200 | £4,200 |
| Service of petition | £250 | £250 |
| Gazette advertisement | £150 | £150 |
| Advocate's fee inc VAT (hearing) | £3,600 | £3,600 |
| Court filing fee | £302 | £302 |
| Official Receiver deposit | £1,500 | £1,500 |
| Subtotal — petition and solicitor costs | £10,602 | £10,602 |
| Official Receiver's general fee | £7,200 | £7,200 |
| Trustee's remuneration inc VAT (est. fixed fee) | £13,500 | £9,448 |
| Disbursements | £2,000 | £2,000 |
| Other legal costs inc VAT (est) | £1,800 | £1,800 |
| Subtotal — Trustee fees and costs | £24,500 | £20,448 |
| TOTAL ESTIMATED BANKRUPTCY COSTS | £35,102 | £31,050 |
Take the net equity from step one, and subtract the bankruptcy costs from step two.
| Property in Sole Name | Property Jointly Owned | |
|---|---|---|
| Estimated gross equity | £62,100 | £31,050 |
| Less: total estimated bankruptcy costs | (£35,102) | (£31,050) |
| Assets remaining after bankruptcy costs | ≈£26,998 | ≈£NIL* |
* Where this figure is nil and the "remaining wealth before bankruptcy costs" (step five) is higher, that figure is used instead — see step six.
Directors in this position very rarely have only one creditor — their own personal borrowing matters too, and it materially affects what bankruptcy would actually recover.
| Unsecured business loan | £15,000 |
| Personal loan | £4,500 |
| Credit card | £2,800 |
| HMRC — personal tax arrears | £6,700 |
| TOTAL OTHER PERSONAL LIABILITIES | £29,000 |
Taken together with the equity position, this gives a truer picture of the Director's actual net worth — before bankruptcy costs are even considered.
| Property in Sole Name | Property Jointly Owned | |
|---|---|---|
| Estimated gross equity | £62,100 | £31,050 |
| Less: total other personal liabilities | (£29,000) | (£29,000) |
| REMAINING WEALTH (before bankruptcy costs) | £33,100 | £2,050* |
This is the step that matters most, and it's easy to miss. If bankruptcy actually proceeds, the Director's other personal creditors don't disappear — they rank alongside the Liquidator's own claim, in exactly the same bankruptcy. What's left after costs isn't paid to the Liquidator alone; it's shared proportionately across everyone with a claim.
| Property in Sole Name | Property Jointly Owned | |
|---|---|---|
| Liquidator's claim (est. loan account / BBL misfeasance / other recoveries) | £50,000 | £50,000 |
| Director's other personal creditors (as above) | £29,000 | £29,000 |
| Total claims competing in the bankruptcy | £79,000 | £79,000 |
| Assets remaining after bankruptcy costs | ≈£26,998 | ≈£2,050* |
| Distribution rate (pence in the £) | ≈34.17p | ≈2.56p |
| LIQUIDATOR'S ACTUAL RECOVERY (pro rata share) | ≈£17,087 | ≈£1,297 |
A headline equity figure of £62,100 (or £31,050 if the property is jointly owned) doesn't mean anywhere near that much is actually recovered. Once bankruptcy costs are deducted, and what's left is then shared pro rata with the Director's own personal creditors, the real recovery on these illustrative figures falls to around £17,087 — or just £1,297 if the property is jointly owned.
This is why a negotiated settlement is so often the better outcome for creditors, even where the Director does have assets. On figures like these, a settlement anywhere above roughly £17,087 (£1,297 if jointly owned) represents a materially better outcome than pursuing bankruptcy through to its conclusion. The realistic figure — somewhere between that floor and the £26,998 gross recovery figure — depends entirely on what the Director can actually afford, not what they'd prefer to pay.
WE'RE TRANSPARENT ABOUT THIS ANALYSIS.
It's the clearest way to explain why a particular figure is being sought — and it shows bankruptcy is a real, costed alternative, not an idle threat.
A confidential discussion today could help protect you tomorrow.
Tell us the basics and we'll call you back — free, confidential, no obligation.
THIS WEBSITE PROVIDES GENERAL INFORMATION AND DOES NOT CONSTITUTE LEGAL OR INSOLVENCY ADVICE. Your position depends on the individual circumstances of each Company and Director. You should obtain advice from an appropriately qualified professional, including a licensed insolvency practitioner where appropriate.
