Help and advice sought on my current predicament.....

Discussion in 'Insolvency' started by OJTY, Aug 20, 2019.

  1. OJTY

    OJTY UKBF Newcomer Free Member

    3 0
    Hello

    I’ve spent the last few days scouring the forum and have been struck by how helpful and knowledgeable everyone is. With this in mind, I thought it worth asking for some advice on my particular situation.

    It’s been a really hard few years, I’m knackered, skint, somewhat depressed and struggling to reach a clear perspective on what my options are (what to prioritise/disregard/fear) and would therefore welcome any advice. I’m aware of the spongebob plan, but not sure if I’m quite at that stage yet….

    I therefore thought it prudent to include as much info below as possible to help answer any queries up front, my situation is as follows:


    · Solo MD of a Limited Company, 40 years old

    · Trading for 3.5 years

    · Business was conceived by two others, but both have had to retire due to ill health.

    · I’ve not taken a salary for 24 months.

    · Have one other gem of an employee who is also not taking a salary at present.

    · I’m owed just shy of £15K from director’s loans I’ve made.

    · Main sector is working in insurance reinstatement industry, very seasonal and erratic, timeframe of jobs can vary wildly.

    · Currently have over £20K of accepted quotes for work, but various delays outside our control are playing havoc with the timeline of this work. We do expect £10K of this to progress in the next 4 weeks.

    · Have outstanding asset finance (with a PG), 65% paid off, 35% outstanding, in constant communication with them, we’re currently working together to sell assets via a broker to get our scheduled payments back on track and we can then restructure the agreement to give us some breathing space.

    · Value of the assets exceeds the outstanding finance quite considerably, but it’s quite specialised kit and so not something easy to sell fast.

    · If we can’t sell assets via a broker/get the arrears up to date, eventually the equipment would be auctioned, and we are aware this might be a bit of a fire sale, plus the associated auction costs would not help.

    · Due to the value of the assets (based on a realistic worst case scenario value) and the outstanding work we’re not insolvent, but could be in the coming months if things don’t progress.

    · One other outstanding loan (just over £14K) with PG in place, scheduled payments slightly behind, but I’m in constant communication, if we can’t get back on track in the next 4 weeks they will likely refer it to a solicitor

    · Arrears of £10K plus with landlord – no PG in place, but as our assets are large and bulky I don’t have the funds to move/store elsewhere.

    · HMRC owed £5K vat, no corporation tax/paye debts at all.

    · Personally, I don’t have much in the way of assets, no car, not much stuff, and while I’m a homeowner, our trust deed confirms I own just £3K capital in the property I own with my partner, she’s the majority owner by some margin.


    I would like nothing more than to bounce back from this, and for all the effort/unpaid hours to be worth something, but aware this might the classic ‘sunk cost bias’ mindset.

    I’m not looking to shaft anyone out of their money either, but have to be realistic in that my best efforts might not be enough.

    While I would feel like I’m letting everyone down, on a personal level the best option might be for me to call it a day, find a new job with a regular salary and start rebuilding my life/finances.

    Any advice on my liability, and how any outstanding PG sums would be enforced/collected would be welcome, as I’m not quite sure how this would work going forward.

    If you’ve taken the time to read all the above, or are about to offer any advice I’m extremely grateful!
     
    Posted: Aug 20, 2019 By: OJTY Member since: Aug 14, 2019
    #1
  2. MBE2017

    MBE2017 UKBF Ace Free Member

    1,429 428
    I will leave it to the experts, but a quick read of the above suggests you have £14k min of personal liabilities, the company £44k min.

    What sort of profit margin do you expect on the £10k of work due anytime? Considering you are both not getting paid, the company looks like it should be closed at first glance.

    I would suggest you get expert advice ASAP.
     
    Posted: Aug 20, 2019 By: MBE2017 Member since: Feb 16, 2017
    #2
  3. Mr D

    Mr D UKBF Legend Free Member

    20,466 2,361
    Speak to an insolvency practitioner. The solution may not be 'shut down now' but may have options.
     
    Posted: Aug 20, 2019 By: Mr D Member since: Feb 12, 2017
    #3
  4. estwig

    estwig UKBF Legend Free Member

    12,365 4,339
    This probably won't help, it's not meant to be flippant.........

    'If you always do what you've always done, you'll always get what you've always got'

    Start changing things in the way you do business, sounds like you have nothing to lose. Start with small things, look for ways to get money, quicker, for less work.
     
    Posted: Aug 20, 2019 By: estwig Member since: Sep 29, 2006
    #4
  5. OJTY

    OJTY UKBF Newcomer Free Member

    3 0
    Hi MBE - Thanks for the feedback, appreciate the time, we make a good margin, likely 70%, most issues stem from the timing of the work, and we have a bit of a perfect storm of unfortunate timing at present.....
     
    Posted: Aug 20, 2019 By: OJTY Member since: Aug 14, 2019
    #5
  6. OJTY

    OJTY UKBF Newcomer Free Member

    3 0
    Thanks Mr D, I'm hoping to trade out, but just trying to get a clearer understanding of the consequences if this doesn't come to pass, 'hope for the best - prepare for the worst'....
     
    Posted: Aug 20, 2019 By: OJTY Member since: Aug 14, 2019
    #6
  7. Mr D

    Mr D UKBF Legend Free Member

    20,466 2,361
    Sometimes a situation can be traded out of. Occasionally there will be options to help with that - a number of big retailers on the high street have recently used CVA's to help them trade out of trouble.
    I looked into doing one once, sadly was not a viable solution for my business. SpongeBob plan was.
     
    Posted: Aug 20, 2019 By: Mr D Member since: Feb 12, 2017
    #7
  8. consultant

    consultant Your Business Community Staff Member

    5,545 773
    I am no expert, but it sounds like you are insolvent.

    What does your accountant recomend?

    Speak to an IP asap.
     
    Posted: Aug 20, 2019 By: consultant Member since: Jan 21, 2008
    #8
  9. Gavin Bates

    Gavin Bates UKBF Enthusiast Free Member

    649 128
    Hi

    Whilst I don't want to upset you given that you haven't taken a salary for such a long time you have question whether or not you have a viable business. For me, if the business can't afford to pay you and has done so for a long time then it isn't viable.

    Whilst bringing it to end will bring its own problems because of the personal guarantees how long can you keep it going whilst not receiving any return.

    I think it may be better to liquidate the business, deal with the personal guarantees as and when you need to and get some form of solid income to begin to rebuild your position.

    Regards

    Gavin
     
    Posted: Aug 20, 2019 By: Gavin Bates Member since: May 9, 2016
    #9
  10. estwig

    estwig UKBF Legend Free Member

    12,365 4,339
    A insolvency practitioner recommending...............insolvency!

    Fancy that!
     
    Posted: Aug 20, 2019 By: estwig Member since: Sep 29, 2006
    #10
  11. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

    11,272 2,298
    If you have no income for the last 24 months then what makes you think you can make changes in 4 weeks, afraid your clutching at straws
    There will also be the IP to pay or do it yourself with SB plan, quicker you make up your mind the sooner you can find a job and earn some money
     
    Posted: Aug 20, 2019 By: Chris Ashdown Member since: Dec 7, 2003
    #11
  12. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    3,418 422
    ... and to an Insolvent Company. Shocker...!;)
     
    Posted: Aug 20, 2019 By: Lisa Thomas Member since: Apr 20, 2015
    #12
  13. estwig

    estwig UKBF Legend Free Member

    12,365 4,339
    A fresh kill, there circling.
     
    Posted: Aug 21, 2019 By: estwig Member since: Sep 29, 2006
    #13
  14. Mr D

    Mr D UKBF Legend Free Member

    20,466 2,361
    Perhaps suggest some other group of people to contact?
     
    Posted: Aug 21, 2019 By: Mr D Member since: Feb 12, 2017
    #14
  15. estwig

    estwig UKBF Legend Free Member

    12,365 4,339
    Yea, me, I'll set 'em straight!
     
    Posted: Aug 21, 2019 By: estwig Member since: Sep 29, 2006
    #15
  16. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    3,418 422
    Something tells me you might not be a licensed IP...?!
     
    Posted: Aug 21, 2019 By: Lisa Thomas Member since: Apr 20, 2015
    #16
  17. Mr D

    Mr D UKBF Legend Free Member

    20,466 2,361
    Roll up, roll up, IP registereation documents only £1499 each.
    Licens only £699 exxtra.

    Applei car of C.Moyles.
     
    Posted: Aug 21, 2019 By: Mr D Member since: Feb 12, 2017
    #17
  18. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    3,418 422
    Bargain!
     
    Posted: Aug 22, 2019 By: Lisa Thomas Member since: Apr 20, 2015
    #18
  19. estwig

    estwig UKBF Legend Free Member

    12,365 4,339
    I've had two ltd companies of mine go bankrupt.

    I don't need a piece of paper to prove, I'm clearly already fully qualified in the matter.

    I can circle at a very high altitude for long periods of time, have beady little eyes and can swoop down at near subsonic speeds. Fully qualified.
     
    Posted: Aug 22, 2019 By: estwig Member since: Sep 29, 2006
    #19
  20. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    3,418 422
    Companies can't go Bankrupt in the UK... ;-)
     
    Posted: Aug 23, 2019 By: Lisa Thomas Member since: Apr 20, 2015
    #20