Your Rights Surrounding Insolvency
Insolvency means that you don't have enough money to be able to make repayments on your debts.
Company InsolvencyWhen a company is insolvent, it is because the creditors have petitioned for the liquidation of your company. Your rights at this stage are limited. You will have to comply with the demands of the receiver during the process. You will retain all your personal belongings unless you have used any of them to secure credit, i.e. used them as collateral for loans or mortgages.
You also have the right to buy the assets back at low cost from the receiver, enabling you to trade again once the winding up is complete. You cannot insist that you stay employed by the company during the process as it is likely that unless needed you will be one of the first redundancies from your company.
Avoiding LiquidationIf your company has more assets than debts then you have the right to apply for a CVA (Company Voluntary Agreement) to enable you to avoid going into receivership or liquidation. It is vital that you seek advice from your accountant as soon as you think there is a problem. It may be that a brief spell in administration is all that's needed to get the company's cash flow back on track and trading again.
Individual InsolvencyAs an individual who is insolvent you have the right to approach an Insolvency Practitioner for advice. It may be possible that you can enter into an IVA (individual Voluntary Agreement) to satisfy your debts. If this is not possible then you can file for Bankruptcy.
If you have debts that you feel are not as a result of your own doing, or that they are not justified you can apply to have them removed from your files. You will need evidence of the debt, proof of disagreement and a sworn affidavit regarding the debts. You are within your rights to dispute any debt that you feel you do not owe.