Insolvency Issues – My Main Client Has Gone Bust Owing Me Money, What Do I Do?

Insolvency IssuesToday’s economy isn’t exactly what you can call thriving. Most businesses today can experience some level of insolvency, it’s probably more rare to find a business that hasn’t been touched by this to some degree. There are many reasons why a business can suffer from insolvency, bankruptcy and money loss. A lot of companies are dependent on a small number of big clients to sustain the profitability of their business, but relying on a small number of clients can be a risky proposition, as your business can be over-reliant on them.

So when your main client has gone bust and owes you money, what can you do?

You probably have more options than you think. The first thing to do is a don’t – that is ‘don’t panic!’ Examine your options. Your client’s business would have to go under liquidation proceedings, and a liquidator would have been appointed to sell your client’s assets. The money raised in this liquidation is given in order of priority to indebted employees, then the liquidator, everything else is divided among unsecured creditors, though unfortunately by this stage the pot is often small. These creditors often end up with only a small percentage of the debt owed to them.

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