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Debt solutions: a fresh start to beat the stress of debt

Ruth Duncan, Maxwell Davies Director

Debt is always stressful and often damaging. Not only to one’s credit score as it easily spills over into personal and family life. There is no way around it, but there are ways to get through it. In fact, finding the right debt solutions could feel like a fresh start.

With uncertain times ahead, for those already struggling with finances, now is the time to find out what debt solutions there are available.

Are we headed for another recession?

The Resolution Foundation, a leading think tank, warns that the risk of recession is the highest since 2007. This stance backed by Mark Carney, the governor of the Bank of England, who predicts an increasingly pessimistic outlook on the economy.

And the latest insolvency figures, both corporate and individual, echo this trend. With respectively, a 5.1% rise in company insolvencies and 15.9% rise in individual insolvencies compared to the same quarter in 2018.

Contingency planning

With the global economy in a “synchronised slowdown” and uncertainty about Brexit, many of my clients who have been struggling to survive, admit that even a small change in the economy can lead to their financial collapse. And the strain of the situation takes a massive emotional toll, affecting their mental health and personal relations.  

Recently, I have noticed more business owners and individuals contacting me for contingency planning, ahead of potential insolvency problems. Sadly, far too often clients leave it at least 12 months too late to seek help.

So, what are the available options?

Every case is different. As an insolvency professional, I can present the debt solutions appropriate for my client’s current circumstances.

From corporate recovery, turnaround, reconstructions, voluntary arrangements, administrations to liquidations and bankruptcy solution tools, the list is long.

Time is of the essence

The sooner the client looks for help, the greater the chances of saving their business and minimising the impact on their mental health.

If the company can’t pay its debts and is facing closure, one of the following options may be suitable: Administration, Creditors’ Voluntary Liquidation (CVL), or Compulsory Winding-Up.

And for businesses about to run out of money, I can advise if rescue is possible. Walk the client through the several insolvency tools that can improve business rescue opportunities: from Administration (including Pre-pack Administration), Company Voluntary Arrangement (CVA) or Scheme of Arrangement.

For smaller businesses, or where problems are temporary, an informal arrangement with creditors may also be suitable.

Lastly, if the client is facing Bankruptcy (losing control of their assets) or is looking for an alternative debt solutions, I will be happy to provide advice to discuss the benefits and consequences of Bankruptcy and Individual Voluntary Arrangement (IVA) procedures.

Whatever the client’s financial situation, it is important that they fully understand the options available to them.

My fresh approach to debt solutions

Having financial problems or losing a business should not be seen as a personal failure. And yet too many people carry it all on one’s shoulders, trying to cope alone. Since one in two adults with debt suffering from mental health issues, the need for a conversation about the emotional burden of debt has never been stronger.

Knowing the best ways to pay off one’s debts is important, but what is also crucial is to talk about the feelings associated with debt. Without the stigma of shame.

My first advice would be to examine one’s feelings about debt. If they are overwhelmingly negative, I would encourage you to take control back and stop letting the debt control you.

By choosing to seek the professional help earlier, I can often provide a wider selection of tools that increase the likelihood of a successful turnaround of a business and a better financial future for individual clients.

Remember, you only need to ask

Whatever your debt problem, whether a failing business or individual debts, advice and help is always available, and it is vital that it is sought as early as possible.

If you or your business is facing financial problems, then please do not put it off. We offer a free initial consultation. You don’t know what we can do until you ask.

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