ABSTRACT
This chapter is mainly about what happens when a company is unable to pay its debts as they become due. In such a case, the company is said to be insolvent. Insolvency is not a particularly rare occurrence: many companies become insolvent at some stage in their lives and where the insolvency is essentially short term, the company will often continue trading as normal, except that they will ask for some forbearance from their creditors or will use more dubious tactics, such as taking an unauthorised extension of their agreed credit periods, until the financial difficulty has passed.
