If your company is in financial trouble, going bankrupt isn’t your only option. You may be able to file a proposal to your creditors. The licensed insolvency trustee at R. West & Associates can help determine if the company is viable. We’ll review your finances and operations to find your best solution. Your first meeting is free and confidential.
We understand that when a business fails, it may affect you, the owner, personally. You face the potential loss of income from the business. Also, you may face personal exposure in terms of director liabilities (unremitted payroll deductions, GST, PST) and personal guarantees (bank and equipment loans, landlord – unfinished lease, key suppliers).
Proposal to creditors
If your company is viable and profitable but is servicing too much debt, you may be able to file a debt restructuring proposal to your creditors. A proposal stops creditor collection actions. It gives you time to settle the company’s debt on terms that allow the company to operate and rebuild. Our insolvency professionals will work with you to tailor a restructuring plan to your company’s specific situation.
A successful proposal can help directors decrease or eliminate their exposure to director liabilities for unremitted GST/HST.
If going bankrupt is your best course of action, we’ll help to wind up the company. Bankruptcy affects both company owners and directors. We’ll make sure you understand your rights and responsibilities as director, and the effects of any personal guarantees you’ve given to creditors. We’ll also explain the priorities of distribution.
When a company goes bankrupt, the company assets are converted to cash. The net proceeds, after liquidation costs and the trustee’s fee and disbursements, are paid to the proven creditors in accordance with the priority given their claim. The unsecured creditors receive the remaining funds on a pro-rata basis.
If the company has few assets of value, bankruptcy is often not necessary as there is little benefit for the affected parties.