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A good starting point for liquidation questions
#224212
Hi there all. I am looking at liquidation for my company. The problem is that my accountant tells me that I have a directors loan of about £30k. If the company is closed what happens to that debt? Will I have to pay it and if so can I negotiate payment terms?
#224215
Hello David73 and welcome

If there is an outstanding director's loan this means that it is money that you owe to the company. Another way of describing this would be an overdrawn director's current account. If the company is liquidated then the liquidator will have to try to realise all the assets of the company including getting in any debts owed to the company. As such they will pursue you personally for the repayment of this money and use court action to enforce this if necessary. As such you will need to put a plan in place to do this.

Generally speaking the liquidator might be willing to negotiate a settlement if you can offer a lump sum or monthly payments. However many directors in this situation also have other personal debts and so often decide to carry out an IVA or declare themselves personally bankrupt to deal with their personal debts after they have liquidated their company.