1Stop Money

Bankruptcy

What is Bankruptcy?
The official definition of bankruptcy is “a legally declared inability or impairment of ability, of an individual or organization to pay its creditors” – in other words being unable to pay your debts.
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Debt Management

What is debt management?
Debt management or a debt management plan is a voluntary agreement between you and your creditors, against most unsecured debts, such as credit cards and unsecured loans.
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PPI Claims

Have you ever taken out loans, credit cards, a mortgage or any other financial loans product? If the answer is YES then you could have been wrongly sold Payment Protection Insurance or PPI, without even knowing it.
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Insolvency – What is Insolvency?

Insolvency is generally defined as a financial state in which a n individual or business can no longer pay its debts, bills and other ongoing obligations on time. Insolvency happens when liabilities or debts exceed the value of any assets and cash flow. Once an individual or company becomes insolvent, it must take urgent action to generate capital and try to pay off or reorganise their debts. Those that cannot pull themselves out of insolvency often face bankruptcy proceedings, receivership, or liquidation.

Insolvency is quite commonly misunderstood, and confused with bankruptcy. Both deal with the imbalance of debt over assets, but insolvency is a state of being, in comparison to bankruptcy which is a matter of law. Companies can be insolvent but not legally bankrupt. Insolvency can lead to bankruptcy, but the condition may also be temporary and fixable without legal protection from creditors.

A simple example: You may notice a local shop changing hands, the original shop’s owners may be approaching insolvency and selling off some of its branches to generate quick cash for debt repayment.

Another option to avoid becoming insolvent, is being taken over by another company. It is quite common for large companies to seek out small commercially viable companies for acquisition or takeover proceedings. This happens regularly in the wholesale foods industry. Struggling manufacturers of popular products may agree to sell off their assets to a larger company with better financial viability.

Insolvency doesn’t always lead to bankruptcy, however all bankrupt companies are insolvent. Once an announcement is made by a company that is becoming insolvent, any shareholders may need to make the decision whether to sell off their shares or remain with the company to see whether it can recover.

For further information on any of 1Stop’s debt management plans, contact 1Stop Money today >>.

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ONE STOP SERVICES UK LTD

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