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What Is Insolvency

There are several definitions of insolvency. One is if you are unable to repay your debts on time, you are then classed as insolvent.

 There are also several debt solutions available if insolvency appears in a frightening fashion.

Another definition of insolvency is what you owe – whether that’s loans, credit cards, HP on the car and your mortgage is greater than the value of what you own. Insolvency can apply to both partnerships, companies and individuals.

Many people go through life and insolvency tends to creep at some point. In simple terms, you could be up to your overdraft or credit card limit the week before payday or even worse after payday.

If it is a more serious problem which is long term and cannot be easily sorted than other signs of insolvency are when legal action is taken against you in respect of unpaid bills. These may be County Court Judgements or bailiffs calling or even a statutory demand – which ignored can result in bankruptcy for an individual or even a winding up petition that can lead to a winding up order in the case of a LLP or limited company.

I’m an Individual – Am I insolvent?

If you have debts which you cannot afford to repay on the date they are due, you are insolvent. If it’s a “one-off” and it won’t happen again as you can see a solution for the future, then it’s just a temporary mishap. If your debt has built up over a long time and you cannot see a way of improving the situation or if it is getting worse then you are insolvent and need to take proactive steps to sort it.

I own a company – Am I insolvent?

To tell whether your company is insolvent ask yourself these questions: 

  • When looking at your balance sheet. Look at the liabilities figure – Is the value greater than that of the company’s assets?
  • Look at your cash flow situation. – Does the Company have debts it is unable to repay as they become due?
  • Has the company had any Statutory Demands or County Court Judgements?


If you have answered yes to any of these questions? You are insolvent.

The Timothy James Partnership are licensed insolvency practitioners and are here to listen and best advise you.

The Timothy James Partnership was established by Tim Heaselgrave in 2012. Our office is located in Bromsgrove, Worcestershire. 

Tim has been working within the insolvency profession for over 25 years, qualifying as a Licensed Insolvency Practitioner in 1998. Formerly a Director at a leading national insolvency practice, Tim moved to a smaller firm in 2003 based in Worcester and later became a Partner of a Warwickshire firm in 2006, before opening The Timothy James Partnership in his home county of Worcestershire.

Added: 06 Oct 2016 16:27

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The Timothy James Partnership

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Insolvency Practitioners Association
About Us

We are an independent firm of specialist Licensed Insolvency Practitioners located in Bromsgrove, Worcestershire.

At The Timothy James Partnership, we work very closely with local businesses and professionals, providing guidance on formal insolvency procedures and advice on restructuring businesses.

We recognise that at times, companies find themselves in difficult financial circumstances and our aim is to provide practical solutions in these situations.