Guides

I am a worried solicitor practising as a sole trader; What options do I have for restructuring? Help for sole traders - lawyers Clearly, any risk of insolvency or cashflow problems is heightened by the lack of limited liability and the risk of the practice closing, is mainly your risk. So we need to try and protect you as much as possible. There are three options to deal with severe cashflow problems Plan A Informal deal with creditors, coupled with possible refinancing; Using the threat of the insolvency options can be like the proverbial Sword of Damocles , you can go bankrupt or enter an IVA (see below) but the creditors would undoubtedly see a compromise or even complete discount of their debts if that occurred.Being prepared to argue with creditors that the informal route means at least some if not all of their debt is recovered and this approach will allow you to practice in future, is the common sense solution.RMT will always however make sure that the options of IVA or bankruptcy have been assessed, a statement of affairs prepared and valuations of properties obtained to counter the why wait for money what if we make the chap bankrupt? questions. The motto is we are prepared for their aggressive questioning.If you have a lot of property equity personally and the practice closes then be prepared as HMRC in particular go after that. Like most people though you probably have little liquidity, having not drawn much recently from the practice, equity is tied up and your spouse is entitled to half anyway. So pointing this out bluntly allows us to prepare a plan for the recovery of the creditors monies over a considerable period of time.Yes, even if HMRC has rejected YOUR own suggested time to pay proposals.We would always insist on the following work being part of our restructuring brief.Detailed DAILY CASHFLOW we can provide the tools and assess this for you. But this MUST be introduced to help survival. You or your admin people must update every day. Statement of affairs for the business and your own assets. Probably requires a desk top valuation of any property. RMT will do this confidentially as part of the brief Detailed financial forecasts for the business. "What if" scenario planning ie what if fee income falls? WIP is not all collected for example? Negotiations with the creditors (usually HMRC and the bank) in writing led by RMTs experienced debt negotiators. Assessment of your personal property and assess possibility of new debt from property(ies)This process can be delivered in 1-3 weeks from engagement and is led by very pragmatic experts in this field. Before commencing we will set out the strategy plan in writing. This work is always costed in writing in our unique solutions report which is provided FREE after your first meeting with a KSA Director or Regional Manager.Our fees usually come from cashflow savings that we can create for you as part of this process.What now?If your business has cashflow problems you must act or the creditors will, sooner or later act aggressively against you.A word of warning. If you have relied upon multiple time to pay deals over recent years with HMRC and have these deals have regularly not been adhered to, then this first option may not succeed but we do believe it is worth trying. What if Plan A does not work? Plan B is to propose an individual voluntary arrangement Plan C bankruptcy, where the practice closes and you go personally bankrupt Of course acquisition by another firm is a possibility too. Will this acquiror pick up all of the liabilities of your firm?Call RMT Group's DEDICATED LAWYERS LINE now. 0845 519 4930