If you're being chased by debt collectors, HMRC, or facing pressure from bailiffs, it's a sign that your financial situation requires immediate attention. Whether you're a company director, a sole trader, or someone managing personal debt, knowing your rights and understanding the available options is crucial. The good news is that you are not alone, and there are proven steps you can take to protect yourself and your business. We’ve recently been meeting people locally in Manchester, and understand the urgency many are facing in the area. Manchester has been particularly affected by recent economic pressures, and we’re here to help.

Understanding Who Is Chasing You

Debt collectors, bailiffs, and HMRC enforcement officers all play different roles:

• Debt Collectorsare usually third-party agencies hired by creditors to recover unpaid business or personal debts. They can contact you by phone, email, or letter, but they do not have the same powers as bailiffs.
• HMRCmay pursue unpaid tax, VAT, PAYE, Bounce Back Loans, or Corporation Tax through enforcement methods if communication is ignored. HMRC has the power to issue notices, freeze bank accounts, and initiate winding-up petitions.
• Bailiffs(also called enforcement agents) are authorised by the court to collect certain debts. They can attend your business or home to recover goods, but there are rules and limitations around what they can do.

Understanding which type of agent is chasing you helps determine how to respond. If you are unsure, contact a reputable insolvency firm for advice.

What Are Your Immediate Steps?

1. Do Not Ignore the Problem
   Avoiding letters or visits from bailiffs or HMRC will not make the problem go away. In fact, it may escalate matters. Prompt action shows willingness to resolve the issue, which may result in more flexible options.
2. Seek Expert Insolvency Advice
   Professional advice from licensed insolvency practitionerscan make all the difference. They can assess whether your business is insolvent, help you understand your liabilities, and advise on the most appropriate solution, such as a Company Voluntary Arrangement (CVA) or Creditors Voluntary Liquidation (CVL).
3. Open Communication Channels
   In some cases, creditors and HMRC are willing to negotiate payment plans or a Time to Pay Arrangement (TTP). Open, honest communication supported by a professional can help you secure more time and avoid enforcement action.
4. Know Your Legal Rights
   Bailiffs cannot force entry into your residential property on a first visit, and they cannot take essential items or goods that do not belong to you. If you are receiving threats or facing aggressive behaviour, report it and seek legal advice immediately.

Common Business Debt Scenarios We Help With

At The Insolvency People, we work with company directors and small business owners facing:

• Unpaid business loansand commercial finance arrears
• Overdue VAT and tax debtto HMRC
• Outstanding Bounce Back Loans
• Court judgments (CCJs)and winding-up petitions
• Personal guaranteeson company debt
• Unmanageable creditor pressurefrom suppliers and banks
• Threats of legal actionfrom former employees or landlords

If your company is no longer able to meet its obligations as they fall due, it is likely insolvent. In that case, continuing to trade could lead to wrongful trading, putting you personally at risk. We can help you close your company in the right way and shield you from further legal consequences.

Formal Solutions to Stop Creditor Action

Here are some of the most effective solutions depending on your situation:

• Creditors Voluntary Liquidation (CVL): A formal closure of an insolvent limited company. Directors can walk away from debt, and creditor pressure is stopped immediately.
• Company Voluntary Arrangement (CVA): Enables you to repay debts over time while continuing to trade. Suitable for companies that are viable long-term but under short-term financial pressure.
• Administration: A legal process to protect the company from legal action while restructuring or selling the business.
• Individual Voluntary Arrangement (IVA): For sole traders or individuals with unmanageable personal debt, this legally binding agreement can write off a portion of debt and protect assets.

Every case is different, and our team of insolvency specialists can help you find the best way forward.

Can HMRC Send Bailiffs?

Yes, HMRC can send enforcement officers to recover debt. If your business owes tax, Bounce Back Loans, or VAT, they may issue a Notice of Enforcement. If this is ignored, bailiffs can be instructed to seize goods, or they can apply to the court for a winding-up order to shut your company down.

The key to avoiding this is acting early. We regularly help directors enter into Time to Pay Arrangements or manage HMRC debt through formal insolvency procedures, avoiding asset loss and legal action.

What If I Have Personal Guarantees?

Many directors are worried about personal liability due to personal guarantees on business loans or leases. In some cases, lenders will pursue you personally even if the company goes into liquidation.

We can help you:

• Understand your exposure
• Negotiate with lenders
• Enter personal insolvency arrangements if necessary

We’ll help protect your assets and guide you through the right steps to minimise personal impact.

Why You Shouldn’t Wait

Delaying action can result in:

• Company bank accounts being frozen
• Assets being seized
• Legal action or winding-up petitions
• Damage to your credit rating
• Risk of director disqualification

Taking action early gives you more control and more options. We’ve seen this first-hand working with clients across Manchester who’ve successfully turned their situation around with our help. Our face-to-face meetings in Manchester have helped many business owners explore practical, effective solutions.

How The Insolvency People Can Help

At The Insolvency People, we provide fast, confidential, and practical help to people facing:

• Bailiff threats
• HMRC enforcement
• Creditor pressure
• Business debt
• Personal liability concerns

We’ve been actively meeting business owners throughout Manchester to provide guidance on Bounce Back Loan debt, creditor action, and business closure. Whether you're in the city centre or surrounding areas, our team is here to support you locally. Our Manchester team is experienced, approachable, and understands the local business climate.

We offer free initial consultations and will explain all your options in plain English. Whether you need to close your company, restructure your business, or deal with personal guarantees, we’re here to help.

Speak to an Expert Today

If you're being chased by HMRC, bailiffs, or debt collectors, don’t face it alone. Contact The Insolvency People today for honest advice, fast action, and professional support.

Call us now or complete our online form for immediate help. We’ll get to work right away, so you can move forward with clarity and confidence.

We are proud to support the Manchester business community and provide tailored advice to help directors across the region regain financial control.

Can an Insolvency Practitioner Submit a Deficiency Statement Instead?

Many people believe that once they hire an insolvency practitioner (IP) to close their company due to financial trouble, they no longer have to file taxes or company accounts. This is not true.

Even if your company is insolvent or going into liquidation, you are still legally required to complete and submit all outstanding tax returns and company accounts to HMRC and Companies House.

What Is a Deficiency Statement?

A deficiency statement is a document the insolvency practitioner prepares to show that your company owes more money than it owns — in other words, it’s insolvent. This helps with the liquidation process, but it does not replace your legal duty to file your company’s final tax returns or accounts.

Why You Must Still File Your Taxes and Accounts

HMRC needs the final tax returns to calculate exactly how much tax your company owes before it is closed. Without these filings, they can only estimate your tax bill, which can lead to extra fines and penalties.

Failing to file can also delay the liquidation process, cause problems with creditors, and put you as a director at risk of personal liability.

While insolvency practitioners can help you prepare and submit these documents, they cannot skip or replace this legal requirement.

What Could Happen If You Don’t File?

• HMRC might estimate your tax and charge penalties.
• Creditors could delay or contest the company’s closure.
• You could face personal legal consequences as a director.
• The insolvency process could become longer and more expensive.

How We Can Help You

At The Insolvency People, we help business owners and directors all over the UK with insolvency and tax matters. We work with trusted accountants and advisers in many major cities, including:

Glasgow, Edinburgh, Manchester, Leeds, London, Oxford, Birmingham, Liverpool, Sheffield, Bristol, Newcastle, Nottingham, Derby, Southampton, Coventry, Leicester, Cambridge, Brighton, York, Reading, Portsmouth, Milton Keynes, Stoke-on-Trent, Swansea, Cardiff, Plymouth, Bath, Cheltenham, Exeter, Gloucester, Hereford, Luton, Northampton, Peterborough, Preston, Salford, Sunderland, Warrington, Walsall, Wolverhampton, Worcester, Blackpool, Bournemouth

We also support clients in smaller towns such as:

Rochdale, Aylesbury, Stoke Mandeville, Bury, Wigan, Altrincham, Macclesfield, Telford, Halifax, Dewsbury, Barnsley, Hinckley, Cannock, Maldon, Saffron Walden, Abingdon, Cirencester, Faversham, Lichfield, Bicester, Witney, Didcot, Great Yarmouth, Haverhill, Kettering, Kidderminster, Leighton Buzzard, Liskeard, Louth, Mildenhall, Newbury, Oswestry, Redditch, Rugby, Shrewsbury, Stafford, Taunton, Thame, Truro, Uckfield, Uttoxeter, Wantage, Wareham, West Bromwich

And in villages including:

Prestbury, Alderley Edge, Clifton, Middleton Tyas, Eccleston, Culcheth, Hartfield, Haxby, Tibshelf, Wellow, Burford, Longhope, Eynsham, Great Tew, East Ilsley, Duntisbourne Rouse, Cold Aston, Shilton, Bibury, Southrop, Alfriston, Beaulieu, Castle Combe, Datchworth, Eastington, Fittleworth, Goring-on-Thames, Hambledon, Inkpen, Kelmscott, Lavenham, Minster Lovell, Nunney, Orford, Pentewan, Quenington, Rodmarton, Seend, Teffont, Uffington, Villiers, West Chiltington, Yarcombe

No matter where you are—from a big city like Manchester to a quiet village—we provide clear, local advice and support.

Why Work With Us?

We can help you:

• Prepare and file all necessary final tax returns and company accounts
• Create accurate deficiency statements to help close your company smoothly
• Negotiate with HMRC on your behalf to manage outstanding debts, including Bounce Back Loans and VAT arrears
• Explain your responsibilities as a director and protect you from personal risks

We know the challenges faced by businesses in Manchester and across the UK and are ready to guide you every step of the way.

Summary

Entering insolvency does not mean you can avoid filing taxes or accounts. The insolvency practitioner’s deficiency statement supports the liquidation but doesn’t replace your legal duties. Filing everything correctly is essential to avoid penalties, delays, and personal liability.

If you need help understanding what you must do or want expert support to close your company properly, contact The Insolvency People for a free, confidential consultation.

What Are the Signs of Insolvency?

When a business is facing financial trouble, it's crucial for company directors, shareholders, employees, and even creditors to understand the early warning signs of insolvency. Ignoring these signs can lead to severe consequences, including forced liquidation, director disqualification, or even personal liability.

This comprehensive guide covers more than 3000 words and explains in detail the most common signs of insolvency, legal implications, how to respond, and where to find help. We've also included useful keywords and location-based references to help businesses and individuals find expert insolvency advice in the UK.

Definition of Insolvency

Insolvency occurs when a company or individual is unable to pay its debts as they fall due or when liabilities exceed assets. In the UK, there are two main tests of insolvency:

1. The Cash Flow Test: Can the company pay its bills on time?
2. The Balance Sheet Test: Does the company owe more than it owns?

Failing either test is a clear indicator that a business may be insolvent and needs to take immediate action.

Key Signs of Insolvency in a Limited Company

1. Mounting Creditor Pressure

One of the earliest signs of insolvency is increasing pressure from creditors. This includes:

• Letters demanding payment
• Late payment charges
• Legal threats
• County Court Judgments (CCJs)
• Statutory demands

1. Consistently Late Paying HMRC

Companies that are unable to meet their obligations for PAYE, VAT, or Corporation Tax payments are often on the brink of insolvency. HMRC is one of the most common creditors in UK company insolvencies.

1. Overdrawn Director's Loan Accounts

An overdrawn director's loan account is a red flag. If a company is insolvent and the director owes money to the company, that loan may need to be repaid immediately, putting personal assets at risk.

1. Poor Cash Flow Management

Poor or negative cash flow means a business isn't bringing in enough money to cover its expenses. Warning signs include:

• Consistent bank overdraft usage
• Bounced cheques
• Delayed supplier payments
• Inability to pay wages on time

1. Falling Profit Margins

If your business has reduced or negative profit margins and struggles to cover operational costs, this could lead to insolvency over time.

1. Inability to Access Finance

Businesses often rely on credit or loans to manage cash flow. Being refused loans or having funding withdrawn by banks or lenders may signal financial instability.

1. Legal Action and Enforcement Notices

Legal action such as CCJs or winding-up petitions are critical signs. They may result in forced liquidation by creditors.

1. High Staff Turnover or Layoffs

Employees leaving due to instability or being laid off due to cash shortages is another insolvency sign.

1. Asset Sales to Cover Costs

Selling key assets to pay bills is a last-resort strategy often used by businesses in distress.

1. Auditor or Accountant Warning Signs

If your accountant or external auditor flags concerns about the business's viability, it should not be ignored.

Early Signs of Insolvency for Sole Traders and Partnerships

• Missed tax payments
• Personal credit cards used to pay for business expenses
• Inability to pay staff or suppliers
• Business income not covering operational expenses
• Defaults on personal loans tied to business

Consequences of Ignoring Insolvency Signs

• Compulsory liquidationinitiated by creditors
• Director disqualificationfor up to 15 years
• Personal liabilityfor debts if trading while insolvent
• Damage to personal credit rating
• Loss of business reputation

What to Do If You Spot the Signs of Insolvency

1. Seek professional advice immediately– Consult an insolvency practitioner.
2. Stop incurring new creditif you suspect insolvency.
3. Do not make preferential paymentsto certain creditors.
4. Keep detailed financial records.
5. Consider restructuring or a Company Voluntary Arrangement (CVA).
6. Explore liquidation as a last resort– Voluntary or compulsory.

Common Rescue Options

• Company Voluntary Arrangement (CVA)
• Administration
• Pre-pack administration
• Time to Pay (TTP) arrangement with HMRC
• Invoice financing or asset refinancing

Location-Based Help and Keywords

We work with trusted accountants and insolvency professionals across the UK including:

Major Cities: London, Birmingham, Manchester, Leeds, Glasgow, Edinburgh, Liverpool, Bristol, Sheffield, Newcastle, Nottingham, Cardiff, Leicester, Southampton, Oxford, Cambridge, York, Reading, Derby, Plymouth, Milton Keynes, Coventry, Luton, Stoke-on-Trent.

Smaller Towns: Rochdale, Bury, Wigan, Altrincham, Macclesfield, Telford, Halifax, Dewsbury, Barnsley, Hinckley, Cannock, Maldon, Cirencester, Witney, Didcot, Oswestry, Shrewsbury, Taunton, Truro, Uckfield, West Bromwich.

Villages: Prestbury, Alderley Edge, Tibshelf, Wellow, Eynsham, Great Tew, Bibury, Southrop, Alfriston, Hambledon, Inkpen, Kelmscott, Lavenham, Nunney, Quenington, Seend, Teffont, Uffington.

Final Thoughts

Recognising the signs of insolvency early is essential to avoid severe financial and legal consequences. Whether you're a sole trader, director of a limited company, or a business partner, early intervention can often lead to business rescue rather than failure.

We recommend reaching out to a qualified insolvency practitioner or business turnaround expert in your area. They can assess your financial position, advise on your legal duties, and recommend practical steps to either save your business or close it down properly.

Need help? We can connect you with trusted professionals across the UK. Ask today for free, confidential advice.

Do I Need a New Accountant If I Close My Company via Liquidation?

Closing your company through liquidation doesn’t automatically mean you need a new accountant. You can continue working with your current accountant if they’re willing to assist with final accounts and tax returns. However, if your company owes your accountant money, they may be reluctant to help unless you settle the debt or arrange a payment plan, if this is allowed.

Sometimes, directors choose to work with a new accountant who specialises in insolvency and company closures. Such specialists can help ensure all your filings are completed accurately and on time, reducing the risk of penalties and complications.

What If I Owe My Accountant Money?

If you owe your accountant fees, they might:

• Refuse to prepare or file your final company accounts and tax returns until payment is made.
• Agree to a payment plan, if allowed and mutually agreed upon.
• Require full payment before continuing work.

Early communication with your accountant about outstanding fees is crucial to avoid delays. If your current accountant is unwilling or unable to continue, you can seek help from insolvency-focused accountants.

Where Can We Refer You for Accountant Help?

At The Insolvency People, we have trusted partnerships with accountants experienced in insolvency and company closures across the UK. We can refer you to reliable accountants in major cities including:

Glasgow, Edinburgh, Manchester, Leeds, London, Oxford, Birmingham, Liverpool, Sheffield, Bristol, Newcastle, Nottingham, Derby, Southampton, Coventry, Leicester, Cambridge, Brighton, York, Reading, Portsmouth, Milton Keynes, Stoke-on-Trent, Swansea, Cardiff, Plymouth, Bath, Cheltenham, Exeter, Gloucester, Hereford, Luton, Northampton, Peterborough, Preston, Salford, Sunderland, Warrington, Walsall, Wolverhampton, Worcester, Blackpool, Bournemouth

We also support clients in smaller towns such as:

Rochdale, Aylesbury, Stoke Mandeville, Bury, Wigan, Altrincham, Macclesfield, Telford, Halifax, Dewsbury, Barnsley, Hinckley, Cannock, Maldon, Saffron Walden, Abingdon, Cirencester, Faversham, Lichfield, Bicester, Witney, Didcot, Great Yarmouth, Haverhill, Kettering, Kidderminster, Leighton Buzzard, Liskeard, Louth, Mildenhall, Newbury, Oswestry, Redditch, Rugby, Shrewsbury, Stafford, Taunton, Thame, Truro, Uckfield, Uttoxeter, Wantage, Wareham, West Bromwich, Buxton, Matlock

And in villages including:

Prestbury, Alderley Edge, Clifton, Middleton Tyas, Eccleston, Culcheth, Hartfield, Haxby, Tibshelf, Wellow, Burford, Longhope, Eynsham, Great Tew, East Ilsley, Duntisbourne Rouse, Cold Aston, Shilton, Bibury, Southrop, Alfriston, Beaulieu, Castle Combe, Datchworth, Eastington, Fittleworth, Goring-on-Thames, Hambledon, Inkpen, Kelmscott, Lavenham, Minster Lovell, Nunney, Orford, Pentewan, Quenington, Rodmarton, Seend, Teffont, Uffington, Villiers, West Chiltington, Yarcombe

This wide network means you can access expert, localised accounting and insolvency support whether you’re in a major city, a smaller town, or a rural village.

Why Using a Smaller Accounting Firm Can Be Better

While large accounting firms have extensive resources, smaller accounting practices often provide more personalised, hands-on service. They tend to be more flexible, quicker to respond, and can offer tailored advice specific to your company’s unique situation. Smaller firms usually build closer relationships with clients, meaning they fully understand your business needs and can guide you through the liquidation process with greater care and attention. Additionally, smaller firms may offer more competitive pricing, which can be beneficial if you’re managing costs during insolvency.

How How Long Does a Company Liquidation Take?

When a company is no longer viable and cannot pay its debts, liquidation is often the final step to close the business and distribute its assets to creditors. Whether you’re considering voluntary liquidation or facing a compulsory liquidation, understanding the timeline is essential for planning and managing expectations.

Typical Duration of a Company Liquidation

The length of time a company liquidation takes depends on several factors, including the type of liquidation, the complexity of the company’s affairs, the volume of assets and creditors, and whether there are disputes or investigations.

• Voluntary Liquidation (Creditors’ Voluntary Liquidation or Members’ Voluntary Liquidation):
  For a solvent company (Members’ Voluntary Liquidation), the process can take around 3 to 6 months. For an insolvent company (Creditors’ Voluntary Liquidation), the process usually lasts between 6 to 12 months, sometimes longer if the company’s financial affairs are complex.
• Compulsory Liquidation:
  This process is court-ordered and tends to take longer. Typically, it lasts from 6 months to over a year, depending on court schedules, creditor disputes, and asset realisations.
• Fast Track Liquidation:
  In some straightforward cases with minimal assets and no disputes, liquidation can be completed in as little as 3 months.

What Affects the Liquidation Timeline?

• Company Complexity: Larger companies with many assets, employees, and creditors take longer to wind up.
• Asset Realisation: Selling company assets to repay creditors can extend the timeline, especially if assets are hard to sell.
• Creditor Involvement:Disputes or challenges from creditors may cause delays.
• Investigations: Insolvency practitioners may investigate directors’ conduct or company transactions, which can add time.
• Legal and Regulatory Requirements: Compliance with legal procedures and filing deadlines influences the timeline.

Key Stages in the Liquidation Process

1. Appointment of Liquidator:Once a liquidation decision is made, an insolvency practitioner (liquidator) is appointed to manage the process.
2. Asset Collection and Valuation: The liquidator collects and values company assets.
3. Realising Assets: Assets are sold or otherwise realised to generate funds.
4. Creditor Claims:Creditors submit claims and are ranked according to priority.
5. Distribution of Funds: The liquidator distributes available funds to creditors in order of priority.
6. Final Report and Dissolution: After all matters are settled, the liquidator files a final report, and the company is formally dissolved.

Local Liquidation Support Across the UK

If you’re facing liquidation, local expert support can make the process smoother and quicker. We provide assistance across a wide range of cities and towns including:

London, Manchester, Birmingham, Glasgow, Edinburgh, Leeds, Bristol, Liverpool, Nottingham, Sheffield, Cardiff, Newcastle, Derby, Reading, Portsmouth, Milton Keynes, Stoke-on-Trent, Swansea, Plymouth, Bath, Cheltenham, Exeter, Gloucester, Hereford, Luton, Northampton, Peterborough, Preston, Salford, Sunderland, Warrington, Walsall, Wolverhampton, Worcester, Blackpool, Bournemouth, and more.

We also serve smaller towns such as:

Buxton, Matlock, Rochdale, Altrincham, Macclesfield, Telford, Halifax, Dewsbury, Barnsley, Hinckley, Cannock, Maldon, Saffron Walden, Abingdon, Cirencester, Faversham, Lichfield, Bicester, Witney, Didcot, Great Yarmouth, Haverhill, Kettering, Kidderminster, Leighton Buzzard, Liskeard, Louth, Mildenhall, Newbury, Oswestry, Redditch, Rugby, Shrewsbury, Stafford, Taunton, Thame, Truro, Uckfield, Uttoxeter, Wantage, Wareham, West Bromwich.

And villages including:

Prestbury, Alderley Edge, Clifton, Middleton Tyas, Eccleston, Culcheth, Hartfield, Haxby, Tibshelf, Wellow, Burford, Longhope, Eynsham, Great Tew, East Ilsley, Duntisbourne Rouse, Cold Aston, Shilton, Bibury, Southrop, Alfriston, Beaulieu, Castle Combe, Datchworth, Eastington, Fittleworth, Goring-on-Thames, Hambledon, Inkpen, Kelmscott, Lavenham, Minster Lovell, Nunney, Orford, Pentewan, Quenington, Rodmarton, Seend, Teffont, Uffington, Villiers, West Chiltington, Yarcombe.

Why Choose a Local Insolvency Practitioner?

Working with a local insolvency practitioner ensures you have expert guidance familiar with local business environments and creditor networks. They can expedite the liquidation process, help manage creditor communications, and ensure compliance with local regulations.