Bankruptcy & Partnership query ?

[Narked_Off]

Hi All,

Just wondered if I could pick your brains ?

Situation is that I'm considering petitioning for bankruptcy for my personal debts and my sole source of income is working as part of a partnership with my fiance, the business has no debt and very limited stock as we only stock/sell what's already been ordered and paid for in advance by customers.

So wondering what would be the implications of the bankruptcy on the partnership I sort advice and got 2 conflicting pieces of information.

First off Business Debt Line (BDL) advised at worst the joint bank account we have may be frozen as it's part in my name, but we could ask the OR and/or bank not too as the account has no debt, overdraft, etc. and is only used to take payments and pay bills, etc. At worst it could mean us needing to open a new bank account solely in my fiance's name for the business to continue.

But ...

Secondly speaking to Insolvency.gov.uk (IGU) they advise that the business would need to be closed down as a result of the bankruptcy no matter what, even though after I became bankrupt I could simply start the business again with no problems except a lot of paper work as a result of closing and re-opening the business.

Then calling back and speaking to either place again they both adamantly stress they are correct and the other party is incorrect .... so I'm a bit ?!?!?!?!?!

Anyone know which one is correct ?

Alterntaives that we could do in advance of the bankruptcy would be to move both the business bank account and the business name into my partners name which would take around a week according to the bank and our accountant, and doing this as a safeguard for my only source of income I'm not sure what the OR would think if we did it and I declared it in the SoA form especially as at that point I wouldn't own a business only be working for a business ?

Hopefully that makes sense and any advise/insight would be gratefully received.

I'd also like to take the opportunity to thank skippy and piggy bankruptcy for their blogs and for de-mystifying some of the rumours surrounding bankruptcy and allaying some of my fears about bankruptcy.

Plus has anyone got any experience of dealing with the OR or OR's in Cardiff ?

Thanks !

Narked

[debtmountain]

Hi Narked,

Welcome to the Forum..[:)]I'm sorry that I cannot answer your query but an expert will be along soon to help you..Good Luck for the Future..xx

[MelanieGiles]

My office is in Cardiff and we deal with the OR's office there all the time. Indeed my bankruptcy manager used to be an examiner in the Cardiff OR's office.

When you are declared bankrupt this will bring an automatic termination to the partnership, but there is nothing stopping your partner continuing to trade in her sole name, and employing you on a PAYE basis. If there are any assets of the partnership, she would need to acquire your share of these, and if you have a current or capital account in credit, this money would also need to be paid over to the OR.