Refer An Account

FAQ

Answers to common questions about our process, the personal guarantee, statutory demands, and what to do if you have received a letter from us.

common questions

Common questions about debt recovery and enforcement

Whether you're a creditor looking to refer an account or you've received a letter from us, our FAQs cover the full process — from pre-legal letters through to statutory demands and insolvency proceedings.
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0161 5678 844

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accounts@rclegalandcollections.co.uk

A merchant cash advance is a form of business financing where a company receives a lump sum of cash upfront in exchange for a percentage of its future sales.
When a merchant fails to maintain repayments or breaches the terms of the MCA agreement, the agreement enters default. The full outstanding balance becomes immediately due and payable. The original lender may seek to recover the debt directly or may assign it to a specialist collections business such as RC Legal & Collections. Where a personal guarantee was provided, both the company and the guarantor become liable at the point of default.
A personal guarantee is a legal commitment by an individual (usually a director) to be personally responsible for a company’s debt if the company fails to pay. It removes the protection of limited liability. If you signed a personal guarantee in connection with an MCA or business loan, you are personally liable for the full outstanding balance jointly and severally with the company — meaning we can pursue you directly for the full amount, regardless of the company’s status.
No. If you signed a personal guarantee, the dissolution or liquidation of the company does not affect your personal liability. Bankruptcy proceedings can and will be issued against you personally regardless of the company’s status. The guarantee survives the company.
A statutory demand is a formal legal document demanding payment of a debt of £750 or more. It is a precursor to insolvency proceedings. If served on a company and not satisfied within 21 days, it creates a presumption of insolvency, allowing a winding-up petition to be presented. If served on an individual (such as a personal guarantor) and not satisfied within 21 days, it allows a bankruptcy petition to be presented. A statutory demand cannot simply be ignored.
If a statutory demand is not satisfied, set aside by the court, or genuinely disputed within 21 days of service, RC Legal will proceed without further notice to present either a winding-up petition (against the company) or a bankruptcy petition (against the personal guarantor). These proceedings are heard in open court and can result in compulsory liquidation of the business or personal bankruptcy. Ignoring the demand is the worst course of action — contact us immediately.
A winding-up petition is presented against a company. If granted, it results in compulsory liquidation — the company ceases trading, an Official Receiver is appointed, and directors’ conduct is investigated. A bankruptcy petition is presented against an individual. If granted, the bankrupt’s assets vest in a Trustee in Bankruptcy, personal assets (including property) may be sold, and significant restrictions are placed on the individual’s financial life for at least one year.
Do not ignore the letter. Read it carefully and note any deadlines. You should seek independent legal advice immediately, especially if you have received a Letter Before Action or a Statutory Demand. You may contact us to discuss the matter, set up a repayment plan, or make payment. You can reach our team on [PHONE NUMBER] or at [EMAIL ADDRESS]. You can also seek free advice from Business Debtline on 0800 197 6026.
We will consider all genuine and reasonable proposals for repayment by instalments. Any proposal must be made in writing and supported by evidence of your current financial position. Verbal approaches cannot be accepted. Contact us at [EMAIL ADDRESS] as soon as possible. Where a plan is agreed, it will be documented in a formal written agreement. Please note that making a payment plan proposal does not automatically suspend legal proceedings — if you are close to a deadline, contact us urgently.
If you believe the debt is not owed, is the wrong amount, or there are grounds to dispute it, you must notify us in writing within the timescale stated in our letter. Your dispute must set out the specific grounds with supporting documentation — a bare denial will not be treated as a valid dispute. Send your written dispute to [EMAIL ADDRESS] or to our postal address. We will review and respond within a reasonable timeframe in accordance with the Pre-Action Protocol.