10 Ways to Hack Insolvency

  • In many cases an Insolvency Practitioner is not needed at all. When you go to meet with an Insolvency Practitioner, he will be friendly towards you because he wants you to appoint him as liquidator to your Company. That’s how he earns his fees, after all. There’s nothing to stop you from stopping trading, selling the Company’s assets and paying creditors yourself.

  • If you come to the conclusion that you have no choice but to use an Insolvency Practitioner to get rid of your bust Company and stop the creditor calls make sure that there’s no cash or readily saleable assets in the Company. He will only use them to pay his fees. He might even decide to sue you.

  • Say as little as possible to the Insolvency Practitioner. He’s not your mate. Don’t tell him about your secret accounts in the Caribbean or your other businesses.

  • You don’t have to rush into a liquidation  or CVA because of a Winding up Petition. If you put a credible defence to the court the petition will be dismissed. I have noticed a lot of Insolvency Practitioners online using Winding up Petitions as justification for immediate CVAs or liquidation. Remember these guys are only interested in their fees and not your well being.

  • While you’ll be told that it’s illegal to trade while insolvent, in reality every entrepreneur faces this at some stage. You can probably work through it and find solutions. You don’t have to appoint an insolvency practitioner.

  • It’s not illegal to temporarily divert funds due to HMRC to pay operating costs. HMRC have the same rights as any other creditor. You are not breaking the law by delaying payment to them if you don’t have the funds. It’s more important to cover payroll and essential suppliers. After all, HMRC can’t stop supplies to you. Creditors can and employees will likely walk out if left unpaid.

  • Try to do deals with your creditors yourself before rushing to a formal insolvency or shuttering your business. Most creditors will be sympathetic and work with you if you are open and honestly explain the situation.

  • Start your new Company well before you liquidate the old one. This will give you added protection from creditors of the old Company and the Insolvency Practitioner.

  • If you are transferring assets from your old insolvent Company to a new business make sure that everything is meticulously documented. You don’t want to be accused of fraudulently transferring assets from the insolvent Company to another. There are many ways to avoid this.

  • Don’t worry too much about Directors Disqualification. It’s an administrative sanction dished out by bureaucrats and courts who don’t have the slightest idea about running a business. It won’t affect your life one iota. Find a nominee director and carry on as normal. Your affairs will be even more private and protected from government snoops.

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