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Donna Goddard

Debt recovery

The recent rise in company insolvencies has been driven by a high number of creditors’ voluntary liquidations (CVL). The outlook for the rest of 2023 is that there will be an even higher number of companies entering a formal insolvency process in almost every sector and industry.

A high proportion of these insolvencies are small businesses (SME’s), some of which had managed to keep going with the help of Government-led support packages and bounce back loans, but with rising interest rates and inflation, they are now struggling to repay loans and obtain financing. 


Options for an insolvent company 

A company can enter one of a number of formal insolvency processes, the most common types of insolvency are: 

  • Administration: An administrator is appointed to manage the affairs of a company in financial difficulty and to try to rescue the business as a going concern or achieve a better result for creditors compared to it first entering liquidation.
  • Creditors’ voluntary liquidation (CVL):  This is an insolvent liquidation and where the company is placed into liquidation by a company’s shareholders and endorsed by its creditors, usually because it cannot pay its debts. The company’s business typically cannot be rescued, so the assets of the company are realised by a liquidator.
  • Members’ voluntary liquidation (MVL): This is a solvent liquidation, initiated by the company’s shareholders who may be looking to retire or bring the business to a natural close. All of the company’s debts will be satisfied in full and any surplus assets will be realised to the company’s shareholders before it is ultimately dissolved.
  • Compulsory liquidation: This is where a company is placed into liquidation by an order of the court as a result of a winding up petition having been presented against a company (typically by a creditor owed in excess of £750).
  • Receivership: A receiver is appointed by a lender to manage and sell specifically charged assets of the borrower company when the borrower defaults on the terms of its lending arrangements.

There are still unknown challenges ahead of us and this uncertainty will make it difficult for SME’s to plan and assess the risks they may have.  It is important to keep an eye on your aged debt ledgers, reviewing them weekly with your finance team and identify any customers who are sharing signs of struggling financially.


“Cash flow is a reality” – late payment can cause considerable cash flow issues for your business, especially when the late payers are large customers. 


How we can help

Our specialised Debt Recovery team are here to assist you with collection or advice. Our team offer an efficient and cost-effective debt recovery service on standard fixed charges. Please contact our Debt Recovery team on 0118 9527204 or, by email [email protected].


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Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

Get in touch

If you have any questions relating to this article or have any legal disputes you would like to discuss, please contact the Debt Recovery team on

[email protected]
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