Personal Credit and Company Liquidation

Company Money and Your Money Are Different

Firstly, it’s good to know that most of the time, during a company liquidation, it won’t hurt your own credit score. Your company and your personal finances are usually two separate things. Your credit score, which helps lenders decide if they should lend you money, stays mostly untouched by what happens to your company.

What Could Make A Company Liquidation Affect You

There are exceptions to the norm, which could result in the company liquidation having an effect on you personally. Here are some situations where liquidating down your company could actually hurt your personal credit score.

Acting Against the Rules

If your business fails due to director misconduct, you might be held responsible for its debts. This is known as wrongful trading. It is unusual for these scenarios to occur however, it’s important to know it could happen. If you are worried about your conduct, our team will very quickly be able to identify for you whether there is a risk.

Personal Guarantees on Loans or Leases

If you’ve agreed to personally cover a company loan or supplier payment agreement with your own assets and the company can’t pay it back, you’ll have to. If you can’t, you’ll be personally liable for that money, which could hurt your credit score.

Finance in a New Limited Company

While an old company liquidation itself doesn’t hurt your credit score. If you try to borrow money or agree credit terms for another company later, it may be flagged that a company you were involved with has been liquidated. This is a caution sign for lenders but usually isn’t a big problem unless it’s happened numerous times.

Getting a Mortgage After Company Liquidation

It’s still possible to get a mortgage even if you’ve had a company which has been closed. It might be harder though. Lenders look at things like your credit score, your income, and other debts when deciding to give you a mortgage.

Sole Traders and Partnerships Are Different

If you run a business on your own, or with a partner, and it’s not a limited company, then your personal and business finances are considered one in the same. If your sole trade business has debts, these could have a negative affect towards your personal credit score.

Other Personal Risks

There are other areas which could put you personally at risk when a company is in trouble. These include:

  • Personal promises you’ve made to pay back loans
  • Taking out more money from the company than you should
  • Paying yourself too much
  • Other claims that could be made against you if things go wrong

Keeping Your Credit Score Healthy

Your credit score is based on how you manage your money. To keep it healthy, make sure you pay back what you owe on time and don’t borrow more than you can afford.


Most of the time, your personal credit score is safe and sound when a company you’re involved with closes down. But there are situations where it could be affected. If you’re unsure whether your situation will flag up any issues, give our team a call and we can very quickly identify if there are any areas of potential concern.

Do you need insolvency help? Call us today: 028 9344 0096

What our clients are saying...

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Gabriela Nester

Exodus Insolvency provided me with exceptional service during a very difficult time in my life. Their team of professionals were knowledgeable, compassionate, and understanding throughout the entire process. They helped me navigate the complex world of insolvency and made it much less daunting. I would highly recommend Exodus Insolvency to anyone who is struggling with debt and needs help getting back on track.

Dee McCallum

I cannot thank Exodus Insolvency enough for the support they provided me and my business. When I realized I was no longer able to keep up with my debts, I was afraid that my business would go bankrupt and that I would lose everything. However, Exodus Insolvency provided me with expert advice and helped me create a realistic plan to manage my debts. With their help, my business was able to survive, and I am now back on the path to financial stability.

Daniel Klein

Exodus Insolvency is a lifesaver! After struggling for years to pay off my debts, I decided to seek professional help. I am so glad that I found Exodus Insolvency. They were able to negotiate with my creditors and come up with a payment plan that worked for me. Their team was professional, friendly, and always available to answer my questions. Thanks to Exodus Insolvency, I am now debt-free and able to enjoy my life without the constant worry of financial stress.

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