A limited Company is a separate legal person.
But some debts were never only the Company's.
Directors are usually surprised to find that liquidation has not drawn a line under everything. Three specific things survive it, and they arrive at the same time. Understanding which of them applies to you is the first step.
Work out what you actually owe, before you respond to anyone.
3 REASONS THE DEBT FOLLOWS YOU
If you drew money from the Company that was not salary, dividend or expenses, the balance is owed back to it.
The Liquidator collects that debt on behalf of creditors, exactly like any other asset.
This is the most common one by far.
Anything you personally guaranteed sits outside the liquidation altogether.
The lender deals with you directly, and the Liquidator has no say in it.
Check what you signed, not what you remember.
Where the review of the Company's affairs identifies a specific issue, the Liquidator may bring a claim against you personally.
This affects a minority of cases, but it is worth knowing it exists.
Far less common than the other two.
THIS IS NOT THE SAME AS THE COMPANY'S INSOLVENCY.
It is a separate problem with separate answers — and the answers are usually better than Directors fear.
Almost everyone does. It is the single most common misunderstanding we see.
The Company's insolvency deals with the Company. It cannot deal with debts in your own name.
What matters is establishing exactly what is yours before you start responding to demands.
Don't guess what you owe
Get the figures in writing before you engage.
Don't deal with each creditor separately
Piecemeal deals rarely add up to a solution.
Don't make payments you cannot sustain
A missed arrangement is worse than none.
Don't move money or assets
Transfers made under pressure are frequently unpicked.
Don't assume bankruptcy is the only answer
For most Directors it is not, as there is an Individual Voluntary Arrangement you can consider.
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.
