Home Others Pressure Off. How Can I Stop Creditor Pressure From Closing My Company? 

Pressure Off. How Can I Stop Creditor Pressure From Closing My Company? 


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Creditor pressure is one of the worst aspects of dealing with company debt, amplifying an already stressful situation. So, what can you do to draw a line under the debts and alleviate the creditor pressure on your company?  

Why are my creditors pressuring my company? 

If your company owes money to a creditor for materials, services, part of a hire purchase agreement, etc., it should be repaid in the specified time. Failing to do so gives your creditors the right to pursue the company for repayment. 

As a director, you should always be aware of your company’s solvent position, so creditor pressure should almost be expected as part of a company being insolvent. 

Are my creditors harassing me? 

While receiving reminders to repay your company’s debts, you might think your company’s creditors are ‘harassing’ you. However, if the company owes a creditor money, they can chase that company and remind you to repay it. 

As part of that process, creditors are allowed to: 

  • Send warnings via phone, email, or post. 
  • Send debt collectors. 
  • Issue a County Court Judgment (CCJ). 

These should only come to your business-related address during working hours. 

While the above is permitted, creditors should not: 

  • Contact you outside working hours, at home, or via social media.   
  • Obtain your personal information by breaching data protection laws. 
  • Pressure you to take out more credit.  
  • Use threatening language.  
  • Imply that they can take legal action outside their powers.  

If a creditor has committed any of the actions listed above, you can complain directly to that creditor, the financial ombudsman service, or the relevant authorities. 

Can my creditors bankrupt my company? 

While it can be a director’s biggest fear, it’s important to understand the insolvency rules in your country before worrying about bankruptcy. Whether your creditors can make you bankrupt depends on where you live. In the United States, a company can file for bankruptcy if it cannot repay its creditors. 

In the United Kingdom, bankruptcy only applies to individuals and sole traders. As such, your creditors could make you personally bankrupt if you’re a sole trader and owe more than £5,000. 

County Court Judgments can negatively impact your company’s credit rating if they’re not dealt with or paid in the time specified in the terms. Once the repayment period has expired, the judgment stays on your company’s credit file for six years, making it harder to obtain credit in the future. 

That said, creditors can force a company into compulsory liquidation. If the company owes more than £750, the creditors can do this by issuing a winding-up petition. The petition is advertised in the appropriate Gazette, and the company’s bank will freeze its accounts, making trading impossible. 

Check the bankruptcy laws for the country where the company is based, and whether those rules apply to companies or if they just relate to sole traders and individuals. 

Stopping creditor pressure 

Regardless of where you live, if you realise your company is struggling with debts that it can’t repay, you should immediately take the necessary action to ensure the situation doesn’t worsen. 

In the United Kingdom, you have several options to alleviate your company’s debts. Your circumstances will have a bearing on which solution is most appropriate, and you should seek advice from a licensed insolvency practitioner to discuss your situation. 

Depending on your company’s circumstances, you might be able to repay an affordable portion of the debt. You can do so through a Company Voluntary Arrangement (CVA). These are formally binding repayment arrangements wherein the company repays its debt in monthly instalments at a rate tailored to its affordability. The company continues trading for the arrangement’s duration, maintaining goodwill with its customers, and the directors maintain control of the company while repaying its debts. After the arrangement concludes, the company’s remaining unsecured debt is written off. 

If the company is under serious creditor pressure and repaying on its own won’t solve its issues, it might benefit from more substantial restructuring. In this case, administration may be more appropriate. During this process, a licensed insolvency practitioner investigates the company’s finances before deciding on a rescue plan. If the company can be rescued as a going concern or there’s a chance of achieving better results than if the company were to close, administration might be a suitable solution. 

Sometimes, despite your best efforts, recovery might not be feasible, or you might want to close the company and draw a line under its debts. Creditors’ voluntary liquidation (CVL) can help by removing creditor pressure and stopping legal action against the existing limited company. Company employees can claim unpaid wages and redundancy from the government, and if the directors have acted in the company’s best interests before and during the insolvent period, they can start a new limited company afterwards if they wish to. 

If you live elsewhere, seek advice from a licensed insolvency practitioner or the appropriate professional for the country where the company is based. 


Having creditors pressuring your company to repay its debts can be stressful. While creditors are allowed to pursue the company for what it owes them, it’s important to know where the line is between creditor pressure and harassment. Bankruptcy and insolvency rules vary between countries, so check your local insolvency regulations. These will have a bearing on what creditors can do to recover what you owe, and what action you can take to alleviate the pressure and debts.



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