What is a company payment plan?
A company payment plan is an arrangement between your company and its creditors, that allows your company to repay its outstanding debts over an extended period, usually through structured, manageable repayments.
When would I need a repayment plan?
You may need to consider a company payment plan when the business can’t afford to clear its debts in full, but has the potential means to pay it back in smaller instalments.
Your company could benefit from a payment plan due to, but not limited to, one of the following reasons:
- Your company has received a CCJ and you can’t afford to pay it
- Creditors have threatened enforcement action against your company
- You want to remain in control of the company while repaying its debts
- Your company can afford to pay the debt, but not in one lump sum
What kind of company payment plans are there?
- Formal payment plans
These are legally binding processes designed to help your company manage its debt. Creditors in formal arrangements must follow the terms and usually can’t take any further action against your company.- Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA)
A CVA is a payment plan between a company and its creditors that allows you to restructure your company’s unsecured debts while continuing to trade by making affordable monthly payments over a fixed period. The process is arranged and overseen by a licensed insolvency practitioner. When in place, all interest and charges are dropped and creditors in the arrangement cannot take further legal action. The process lasts for up to five years, and on successful completion, any remaining unsecured debt in the arrangement is written off.
More on Company Voluntary Arrangements - Restructure your company through administration
Administration is an insolvency procedure for companies that are insolvent with the primary purpose of an administrator, like ourselves, being to rescue the company as a going concern. Entering the procedure, your company will be in a temporary state of protection by a moratorium that halts creditor action including legal proceedings, giving your company the breathing space to continue trading. With this protection, a payment plan can be facilitated as part of the process. Although a payment plan this is not always the case, and some exit strategies out of the process can inIclude liquidation, or a company sale.
More on administration
- Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA)
- Informal payment plans
These are more flexible agreements, which allow you to manage your debts without a legally binding agreement.- Restructure your company through administration
A TTP is an informal arrangement directly with HMRC. It allows you to pay off tax debts such as VAT, PAYE and Corporation Tax, in instalments over a set period. Once the agreement is in place, HMRC aren’t likely to take enforcement action as long as the terms of the plan are met.
More on Time To Pay Arrangements - Negotiate directly with your creditors
By engaging in open communications, companies can often reach mutually beneficial agreements that provide both relief and time relieve company debt. By not entering into a formal agreement, you don’t have the legal protection formal arrangements provide. However, you have the flexibility to better customise terms and to speak directly with your creditors.
- Restructure your company through administration
How our services can help your company
As licensed insolvency practitioners, we can help you to facilitate the above formal payment plans. If your company is struggling financially, we can offer free, confidential advice.
If you’re considering alternatives to a payment plan, we can also help advice you on the possible closure options that could be suitable for your company.
- Close your company down via a Creditors Voluntary Liquidation (CVL)
A CVL is a liquidation procedure for companies that are insolvent. The process will formally close and liquidate your company, ceasing its trading operations, realising any assets, and removing the threat of creditor legal action. If your company has employees, they can claim for redundancy and other statutory entitlements through the government’s Redundancy Payment Service (RPS). The process is final and irreversible. Once completed, your company’s unsecured debt will be written off and the company is dissolved, allowing you, the director, to move on.
- Close your company down and start again via a pre-pack liquidation
A pre-pack liquidation is a type of CVL where the sale of your company’s assets is arranged before liquidation, allowing business operations to continue seamlessly under the purchasing company. The company name may be reused, and employees can transfer under TUPE. Contracts and essential agreements can also be included as part of a sale, ensuring minimal disruption to your business operations. This process eliminates the unsecured debts of your previous company, providing a fresh start free from previous unsecured liabilities.
How to get in touch with us: The next steps
- Speak with our initial advisers
Make contact with our team, via phone, filling in a form, or online chat. We will assess your circumstances and, if suitable, arrange a free consultation with a consultant to discuss your company’s situation. - Initial assessment
During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or whether alternative solutions better suit your company’s problems. - Formally engage with Wilson Field
If there is an appropriate insolvency solution, we will confirm the necessary steps to start the procedure and will issue you with the relevant documentation for you to formally engage us.
In summary
Payment plans can be both formal and informal arrangements that enable your company to settle its debts gradually, usually through a series of affordable, scheduled payments. By entering into a payment plan, you could stop creditor action and continue to trade.
If your company is struggling with debts, we can offer free, confidential support on the viability of a payment plan, as well as the most appropriate insolvency solutions.
Case Studies
Designer Recliners Limited
Kelly Burton • Manufacturing • Administration, Company Voluntary Arrangement (CVA)
A Sheffield furniture manufacturer and upholster has relaunched offering a smaller, more specialised range of products.
Anico Interiors Limited, which included reclining chairs for the elderly, had suffered cash flow problems and issues with profitability.
Designer Recliners Limited, managed by director Nick Wall, has purchased the assets and business of Anico saving all 11 jobs.
Andy Wood and Robert Dymond from Sheffield business turnaround experts Wilson Field were appointed joint liquidators on 8 June and advised on the sale of the 14-year-old company, based on Orgreave Crescent at Orgreave Industrial Estate, as a going concern.
Andy Wood, associate director and insolvency practitioner at Wilson Field said:
“Historically, the company offered a wide range of products but has now streamlined its offer to customers and cut out some unprofitable lines, as well as re-vamped its web site.
“Directors took advice from Wilson Field with the business sold to new company Designer Recliners Limited as a going concern, safeguarding all 11 employees’ jobs. The new company will offer the same service and standards under the same management team but focus on a smaller range of specialised products.”
The company employs skilled staff including upholsterers, seamstresses and cutters and was set up in 2002 by Nick Wall.
Silcox Coach Company
Kelly Burton • Automotive • Company Voluntary Arrangement (CVA)
Pembrokeshire-based Silcox Coach Company, which operates school transport as well as local bus services, has been placed into administration today.
Despite attempts by administrators from Sheffield-based Wilson Field to secure a buyer with various interested parties, the 134-year-old company, which operated a fleet of 65 coaches and buses from its base in Pembroke Dock, has now ceased trading.
Insolvency practitioners Kelly Burton and Joanne Wright from Wilson Field Limited were appointed by shareholders after the company experienced financial difficulties and as a result all 92 staff jobs have been made redundant.
However, in the region of 50 staff have been re-employed by Edwards Coaches of Pontypridd who have been granted the local authority contracts previously operated by Silcox.
Kelly Burton, director and insolvency practitioner at Wilson Field said:
“Silcox Coaches was a fourth generation bus and coach operator and over the years provided various forms of transport services latterly focussing local authority community bus routes, school services, coach hire and coaching holidays.
“The company had an excellent reputation within the industry, the local community and its clients. Initially there were a number of parties interested in buying the business and assets and we had hoped to save all the jobs of the loyal workforce. Sadly, despite our best efforts none of these came to fruition. On the positive side, Edwards Coaches of Pontypridd have re-employed approximately 50 of those staff.”
As well as office accommodation in Pembroke Dock, Silcox also occupied a small travel office in Tenby and a large bus and coach compound near the offices in Pembroke Dock.
Edwards Coaches is the largest family owned coach company in Wales employing over 500 staff and operating 260 vehicles. It currently operates National Express coaches from Haverfordwest departing daily to Cardiff, Heathrow, Gatwick London and various other destinations plus transportation for over 8000 students to school or college each day from bus depots all over South Wales.
It also operates coach holidays for 80,000 passengers a year across the UK and Europe and operates The Edwards’ Red Dragon coach which is the official carrier of the Wales Rugby Team.
Travellers who have booked and pre-paid for a holiday with Silcox may be entitled to a refund and should contact either Bonded Coach Holidays (BCH) e-mail: bch@cpt-uk.org or The Confederation of Passenger Holidays UK (CPT) Tel: 020 7240 3131.
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