Filing for BR soon, need answers!

[evertheoptomist]

I've got huge debts, (£140,000 and interest bearing!)I am a sole trader. I closed a business down last year to limit losses, but still have another much smaller one running. Most of my debts occurred with the one I closed, but the current one cannot support the debt repayments. I am filing for BR in two weeks and starting the form filling.

I arranged an informal payment scheme with most creditors,(it took almost 7 months, but Inland revenue, VAT and Council are merciless! And one of the smallest creditors has a high court action against me! I can no longer keep up with agreed terms due to a problem with income which I am currently working on with the local council and landlord, and which should be resolved within a year (hopefully) but I have run out of time and I am having to bite bullet.

I have no assets in the current business, everything is leased. The lease on the current trading premises still has three years to run. I have no asset in my house, I used that for funding the business start up and paying off HMRC and council over the past year (on advice by my accountant who is now a financial consultant!)

My current business is not worth selling because of the current problem, which will eventually be resolved, but which supports me and my daughter and pays its way.

I worked hard for this business but fraudulent misrepresentation by an
agent two years ago caused the start of my financial downfall. I fought hard over those years but I cannot afford the estimated £50,000 the solicitors say it will cost to take the agent and the other companies involved to court, even though I have a case, according to the very expensive barrister I consulted. So I obviously want to salvage as much as I can for my daughter and me to have a chance at a future.

I have a poor chance of employment success, due to my age, my lack of qualifications, and my inability to let go, so I need to know that I can still provide for us.

I am very scared of the future. I smile to my customers and carry on as if all is well, even though they all say how much they miss my last business, but I won't, even now, give up without a fight.

So my questions are....
Would the O.R.consider me being able to continue to trade as I have future bookings/deposits paid, a loyal customer base and a sympathetic landlord?
Will I have to close the business when I file for BR?
I also have an employee and I want to make sure she is going to be okay, what do I say to her?

[Adam Davies]

Hi
I can totally relate to your situation and wish you luck for the future.You deserve to prosper.
Your questions are too complex for me to answer and you need to wait for one of our professional IPs to sign onto the forum.
regards


Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Soulgrowth]

So sorry to hear of your situation ... I had a similar situation with running my own business which became a victim of the downturn in the current economic climate. I am sure that the experts here will be able to give some good advice.

I was on the verge of going into my local court to petition for my own bankruptcy, rather than the loss of pride associated with someone making me bankrupt, then quite by accident I came across these people who have a very progressive, dynamic, hand holding approach and have (hopefully) turned things around for me. All you have to lose is a free phone call ... give it a try :)http://www.bankruptcy.co.uk/index.html#

Debbie

[MelanieGiles]

Hi there and sorry to hear about your difficulties.

The Official Reciever may well allow you to continue to trade - can I enquire what sort of business you are running? Do you have stock and assets which could be sold, or is it more of a service industry. Check the terms of your lease to see whether this terminates upon bankruptcy - although I note that you have a sympathetic landlord.

Your employee will be able to claim for outstanding wages, holiday pay, redundancy and payment in lieu of notice from the Department of Employment's National Insurance Fund. The OR will process this claims for her.

Have you also considered whether an IVA would work? I find local authorities and HMRC very reasonable and commercial, and this could save your business.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[evertheoptomist]

Hi melanie

Sorry for delay, computer old and crashing! Thank you for your response.

It's a small play centre for children. It's affected by seasonal fluctuations regards income. I lease everything. Stock is food drink and confectionary, replenished every week according to sales.

I take advanced bookings and there are no debtors.

I have a problem with carparking and access to the centre which the council and landlord are sorting out, but this is taking some time. I am down over 50% in income over the past 7 months directly due to this problem.

I made commitments to all my creditors for repayment in accordance with advice from the National Debt Helpline, it worked well, but took a long time to accomplish.

HMRC and council proved the hardest to deal with. They insisted on minimum payments which I warned them I would not be able to guarantee. I have defaulted this month. I had to pay my mortgage.

Now HMRC are taking me to court. Council will pursue bankruptcy.

I cannot say how long my current financial position will last, but it is a nice little business and supports me and my daughter as well as itself, but it cannot support this debt.

IVA sounds like a good option, but in reality it is like a 5 year prison sentence to me. I have a short time left on the lease, I could renew, if the landlord remained sympathetic, but even the rent is a struggle at the moment.

I usually make enough through October to June to see me through the summer months, but this year I didn't. With the weather the way it has been the past few years, I cannot say with any certainty what my monthly income is going to be, but it will continue to break even.

I don't want to choose the bankruptcy route, but I am also afraid of IVA as it seems to be fraught with problems.

I have worked really hard to get myself into this business, and the thought of losing this now after my start up one had to be closed is killing me. If I could turn back the clock......

I have confidence in this business. I have built up a good customer base, but it is just not saleable at the present time. In fact, an accountant friend of mine suggested walking away. I can't do that.

[MelanieGiles]

If you are relying on feedback from the forum, as to the success rate of IVAs, please remember that forums tend to deal with the dark side of procedures and that the majority of IVAs succcessfully run their course quite successfully with little outside fuss.

Having said this, you need to be committed to an IVA if you are going to propose one. It seems that you feel that bankruptcy may be a better option, so in that case you gamble with your business

Good luck with whichever route you choose to follow.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[evertheoptomist]

I may not be able to renew my lease. If I have an IVA, what happens then? My "unemployment" would result in bankruptcy

I need to pre-empt my position. I have to do that as par for the course in business, but no-one seems to know how the O.R. would operate. Could I keep my income going in bankruptcy, is it possible? Or am I faced with IVA or bust?

I need help with this as I have little time left before I go to the court. I have had very few opportunities to ask anyone for help, being self employed, and I seem to meet the same answer from anyone I seek help from in that - I am on my own! I cannot afford to pay an I.P. let alone the court fees to put the injustice done to me right.

You have told me my employee will be sorted financially. That's okay I suppose. I have made 6 people redundant in the past two years, most with at least a qualification I have funded them for which they could use elsewhere, and with good references. They have all succeeded.

I know I could keep fending off the creditors, I've done it for so long. What I need to know is how I am going to come out of this without losing everything I have worked for.

Surely some action by a slick agent in property can't just con me and get away with it whilst I crash and burn?

I am looking for someone with similar experiences I could share with. I am hoping for an expert who could say to me , this could be a path to follow.

This is, very definitely, sour grapes for me. I have to consider giving up my business whilst someone else is driving around in a nice new car and continuing to earn a huge wage, safe in the knowledge that he is protected by:

a) the law,
b) the "member only" society he belongs to
c) the click he socialises with in the city.
d) a council authority without a "responsible person"
e) the legal profession who need £50,000 up front before they go to
court to fight my case.

I realise there that there is a dark side. I am in it. I could make his life made uncomfortable for alot less!

I try to warn other new business start ups in this city about this situation, having used the "Business Eye" set up as it is now called, but to no avail.

I sympathise with people who want to get back at those who have done them wrong by going the other side of the law. I don't want to do that, but if I lose everything - which is probable - I am not going to be happy seeing someone else cruising around carefree whilst he put me and my daughter out on the street.

So having weighed the balance, I see it as this:

IVA or bust.


No middle ground, no other way, just shuffle off into the gloom and we'll see you again sometime.

Thanks

So please, if there is anyone out there who can give me a ray of hope, let them in.

[MelanieGiles]

Hi again

You will not need to pay an IP for initial advice, so I would personally find one who operates in your city and ask for a free consulation.

No-one can pre-empt what the Official Receiver would say about your business if you were to declare yourself bankrupt, and this is one of the downsides of that procedure in that it is out of your control.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk