Insolvency??

[Arjessa]

As we cannot afford to run our Leased Pub any more and are packing up and moving out, would it be advisable to declare insolvency and how does one go about this? :|

 

[Scalloway]

How to go bankrupt

https://www.gov.uk/bankruptcy/applying-for-bankruptcy

 

[Socio South West]

Are you actually bankrupt/insolvent, or is the business no longer meeting its liabilities? The two are very different, and bankruptcy has some more serious longer term implications than may be at first realised. It is best avoided if at all possible.

The best way, if it is the case that the business is not meeting it's liabilities, will be to cease trading, realise any assets you have, and then come to an arrangement with your debtors to either pay them off over a period, or accept a percentage of the debt: If you actually pick up the phone and talk to them you will be surprised how helpful many of them will be, as long as they haven't already put the matter into the hands of debt collectors.

I have just turned a business round that had been incredibly busy, and supplier accounts had built up, and then business totally stalled, but all nine suppliers who were owed amounts up to £4,000 were happy to accept payments over a number of months, and business has picked up again and the debts are all cleared.

 

[Arjessa]

Thanks, we are struggling and cannot pay off all the mounting bills. If we could pay them then there would be more money going out than coming in!

 

[patientlady]

Hi Arjessa
Contact Inez Ward you will find her on Facebook, she will be able to help you in every way. Whilst not giving you legal advice she will help you get out! She had a very public end to her pub business in 2008 and will only be too pleased to help you if she can.
There are currently 52 pubs per week closing! Around 8 years ago it was 5 per week.

I am so sorry you have found yourself in this position through no fault of your own I know!
and be assured you are now making the right decision...
take care p/l

 

[Alan R Price]

Arjessa

What you do next will depend on a number of factors:

• whether the business is a limited company, LLP or sole trader/partnership;
• the respective levels of assets and liabilities in the business;
• if a limited company, whether you have given any personal guarantees for its debts;
• if a sole trader or partnership, what other assets and liabilities you have outside the business, for example a house or investment property; income tax or credit card debts etc.
• Your employment prospects and whether you currently have any other sources of income.

I recommend you talk to an insolvency practitioner for advice. Most will give you an hour, free of charge, to explain your options and the likely outcomes.

 

[Arjessa]

If I declared Bankruptcy, can the courts force you to sell your home or car? Do they come and look around at what valuables you have? How far do they investigate one's assets if any? If I declared Bankruptcy myself, does that put a stop to any bills owing or is there a limit and I still have to pay smaller ones? Does anyone know these answers please? I am being pushed into thinking that I may have to do so as we have decided to close the business, having offered the surrender of the Lease to the landlords (who are not being very pleasant about it all), but still being hounded for more and more payments when after Sunday when we close we shan't even have an income! Thanks to anyone who knows or has been there, done that! Cheers!

 

[patientlady]

If I declared Bankruptcy, can the courts force you to sell your home or car? Do they come and look around at what valuables you have? How far do they investigate one's assets if any? If I declared Bankruptcy myself, does that put a stop to any bills owing or is there a limit and I still have to pay smaller ones? Does anyone know these answers please? I am being pushed into thinking that I may have to do so as we have decided to close the business, having offered the surrender of the Lease to the landlords (who are not being very pleasant about it all), but still being hounded for more and more payments when after Sunday when we close we shan't even have an income! Thanks to anyone who knows or has been there, done that! Cheers!

So did you contact Inez?

 

[accountingsolutions]

Alan is right you should contact an insolvency practitioner for advice. You could also contact your local Citizens Advice Bureau. If you would like to send send me a private message I will give you details of how the process works.

 

[arcon5]

If I declared Bankruptcy, can the courts force you to sell your home or car?

Yes.

In fact once you declare BR the trustee is now responsible for your estate.

In the case of cars, they decide if you need it and look at its value - usually (but flexible) they let you keep your car if it's only worth about £1k and you have demonstrated you need it. If it's worth say £6k they may force a sale and give you back £1k to buy a car.

In the case of your house, if you have equity (if it's joint owned remember the equity is divided by two usually - assuming it was bought equally), they will ask you to buy their interest (if you have friends or relatives that can assist you) or can put it up for sale.
If no equity, they monitor it's value for 3 years.

Or you can surrender the house and any shortfall would fall in to the BR.

Do they come and look around at what valuables you have? How far do they investigate one's assets if any?

No, you are expected to declare your assets. They may find out if you are the 'keeper' of any cars from DVLA or search land registry etc.
But nobody comes to your house. They are not interested in things like a TV worth a couple hundred quid, but maybe a diamond ring worth £5k.

Hiding assets from your trustee is a serious offence and can result in a prison sentence!!!!! I remeber reading a case a short while back of a guy who hid an expensive ring from the receiver, a few years after discharge he made an insurance claim because he lost it - the receiver found out and the man was jailed.

If I declared Bankruptcy myself, does that put a stop to any bills owing or is there a limit and I still have to pay smaller ones? Does anyone know these answers please?

All unsecured debts are included! No exceptions - otherwise if you wrote of some debts and not others it would be classed as giving preferential treatment to certain creditors.

Secured debts are not included - but when they become unsecured they automatically fall in to your BR. For example, your mortgage is a secured debt and not included... but if anytime after BR you surrender the house and there's a shortfall, this shortfall will fall in to the BR as the contract pre-dates the date you petitioned.

(NOTE: it's important NOT to sign ANYTHING from for example the mortgage company after BR, irrespective of any threats they make - because some are know to try get you agree to the shortfall post-BR to avoid it falling in to it. Northern Rock in particular)

I am being pushed into thinking that I may have to do so as we have decided to close the business, having offered the surrender of the Lease to the landlords (who are not being very pleasant about it all), but still being hounded for more and more payments when after Sunday when we close we shan't even have an income! Thanks to anyone who knows or has been there, done that! Cheers!

If you are declaring BR, a few things I personally would recommend:

• stop making payment to creditors (things like suppliers, business rent, credit cards, loans). Use this money to save the £700 to petition for BR and if you want to surrender your home, save for a deposit to move.
• establish an income before declaring to avoid potentially starting your new life in debt for example.
• open a basic bank account with Barclays (or the co-op cash minder) as once you declare the banks will freeze your accounts and seek to close them when you are discharged.
• do lots of reading, then when you think you know it all do more reading. Know of things like an IPA/IPO, BRO etc.

Very very important:

• take professional advice first, do not rush in to this! Quite simply, if you have nothing then even if they got a CCJ against you and baliffs, there isn't really much to do.
• go through your situation with StepChange or the business debt helpline - or any other debt charity! Do not use or pay for the services of the slime ball companies out there.
• the receiver is there to realise your assets for the benefit of the creditors. They will investigate your affairs.