News: Act promptly to avoid a financial crisis warns Rotherham debt expert

Directors of struggling companies risk personal financial losses if they bury their heads in the sand, leading debt expert Paul Moorhead has warned.

Insolvency practitioner Paul, the founder of Rotherham insolvency practice Moorhead Savage, says business owners need to act promptly if they are hit by the recession.


And he adds that ignorance is no defence when it comes to facing the consequences of a financial meltdown.

"There are company directors who continue trading as usual even when they know they are in difficulties," he said.

"But by taking this approach, rather than seeking expert advice, they run the risk of becoming personally liable for the company's debts if the business does go bust.

"And it is important to point out that at a time like this, ignorance is not considered a defence. If a company runs up considerable debts when the directors knew, or ought to have realised, that the company is going to end up in liquidation, the directors run the risk of losing the protection that limited liability status provides.

"They key is to seek advice from an insolvency practitioner as soon as possible, somebody who will help put in place either a formal plan to turn things around or give advice on the best way to deal with the problem. Creditors are increasingly willing to consider sensible turnaround plans so financial problems need not mean the closure of a business."

Earlier this year, Moorhead Savage expanded by taking further office space at RiDO's Moorgate Crofts Business Centre.

Moorhead Savage website

Images: Moorhead Savage