If a business owes you money you may need to act sooner rather or face a longer wait to be paid under new proposals for US-Style insolvency protection.
Businesses that find themselves in financial difficulties and pursued by creditors may soon have an extra six weeks to help them recover and turn things around. At least that’s what will be under consideration in a consultation between the government and R3, which will be taking place this month.
In the US, businesses are able to gain some breathing space by what’s known as a Chapter 11. This prevents creditors from pursuing debts for a limited period of time so that business owners can focus fully on turning around a business if recovery is possible.
Businesses won’t have it all their own way, if a new ruling is to be passed however as they will still require the services of an experienced insolvency practitioner to help them.
The number of business insolvencies in the UK has increased by 5% on the previous quarter according to the latest figures. This signals that the underlying health of the economy is not in good and further economic problems could be on the horizon whether the UK votes to stay or leave the EU in June.