Can't Pay Company Debts? What UK Directors Should Do Next
If your company cannot pay debts when they are due, it may already be insolvent. This page explains your options, your risks, and what to do next clearly.
Is this your situation?
- • HMRC or creditors are chasing payment
- • You are choosing which bills to pay
- • Cash flow is unpredictable
- • You are worried about personal liability
What this means
If your company cannot pay its debts as they fall due, it is likely insolvent. At this point, your legal duties shift to creditors, and continuing to trade without a plan can increase personal risk.
Your options
Best if the company cannot recover. Provides an orderly closure.
Protects the business while restructuring or selling it.
Allows you to continue trading while repaying debts over time.
What happens next
- 1. Understand your position
- 2. Identify risks (HMRC, creditors, directors)
- 3. Compare your options
- 4. Decide on a direction
- 5. Speak to a professional if needed
Common questions
In some cases, yes, particularly if trading continues when insolvency is clear.
Possibly, but only if it does not worsen creditor position.
Creditors may take action, including winding-up petitions.
Understand your position
Answer a few questions to see what your situation looks like.
Related: HMRC debt, insolvency tests