We are all aware of the current cost of living crisis that has hit the country, it’s clear to many that we are living through very challenging times. This can directly impact on our personal incomes as well as the financial performance, and in some cases future viability, of many companies.
Blandy & Blandy’s head of resolution team and partner David Murray tells us why it’s so important to seek out early and appropriate advice if you find yourself faced with a personal and/or corporate insolvency situation.
Whilst it might be tempting to simply face the music and dance, it is far better, in the current climate, to seek early and appropriate advice if there is any risk of personal and/or corporate insolvency.
The Bank of England has today (22 September 2022) raised interest rates to 2.25%, taking borrowing costs to levels not seen since 2008, and some experts are predicting that rates may rise to 5% or more by next year. In addition, the Bank of England is forecasting that the economy is already in recession – defined as a fall in GDP in two successive quarters.
Government statistics published on 16 September show a substantial increase (43%) in companies declared insolvent in August 2022 over the same period in 2021 and an increase of 42% over the August figure pre Covid-19.
Unfortunately, it is not anticipated that the prevailing economic headwinds, for both individuals and companies, will diminish any time soon and they may well increase in the short term.
The worst thing that an individual or company faced with pressing financial issues can do is ignore them in the hope that difficulties will simply disappear or that better times will arrive in due course.Early and appropriate advice should be sought on actions which can taken to avoid or mitigate the effect of insolvency, whether that be as an individual or director of a company.
Insolvency practitioners and/or specialist lawyers can advise on proactive steps to take when faced with financial pressures to mitigate and diminish the risks of insolvency. It is recommended that individuals or companies facing financial pressures should ensure that when taking early and appropriate advice they seek it from fully qualified professionals, expert in providing recovery and insolvency advice.
Partner David Murray, head Dispute Resolution, specialises in providing recovery and insolvency advice.