Unsecured Creditors Still Owed Money

Unsecured Creditors Still Owed Money.

We have all seen in the news lately about high street shops going into administration.

Research released today showed that over £1bn is still owed to suppliers, landlords, and customers. Company Watch found that of the companies that went into administration in 2012 only £499m was recovered.

Of the money recovered £365m was paid to banks and £123m was used for fees and other bills.

Unfortunately when it comes to paying firms and people what they are owed there are strict rules on who gets paid and which order and its unlucky but unsecured creditors are last on the list.

Our View

This is the first lesson in business.

Whilst tempting, relying on one major client or a number of large clients and building your business on this is a very high risk strategy,

We symapthise with those smaller business suppliers that are suffering as a result of high profile business failures.  You are no doubt in a long line of creditors, with HMRC, surprise, surprise being first in the creditor pecking order.