How will my business be affected?What should I do?

[catswhiskers]

HI, I am in debt by nearly 35k.

25500K personal debt with HSBC
£1000 overdraft on sole account with HSBC
£2000 overdraft on a joint account with HSBC
£4000 credit card
£2500 credit card

We have now opened another joint account with a differnet bank which is barely in credit at the end of each month.

My partner is self employed, so work is sometimes sparadic. I am unemployed but a year ago opened a small shop with a friend. It cost £2000 each to set up and I borrowed the money from my dad for my half.

I live with my partner and we rent. We each have a car (his worth about £500 and mine £1000). He needs his for his job and I will need mine as soon as I can find a part time job as I currently work in the shop 2 days a week. I don't take a wage from the shop as it is barely paying its own way as still in its first year.

We have paid all our main bills but this month I have been unable to pay any of my debts.

I need to know if my partner will be affected if I go bankrupt? As my personal loan had a standing order for payments from the joint account, HSBC have told me that he is accountable for 50% of the debt. I can't believe this as only my name is on the loan agreement.

What will happen to the shop?

What will happen to all the items in my house (i.e TV, PC, etc)

I did consider an IVA but as i am unemployed, this won't work apparrently. I have gone to my local CAB and they advised Bankruptcy.

[MelanieGiles]

Hi catswhiskers

Your partner is definately not responsible for any ongoing loan repayments if he is not party to the agreement. Are you sure that he has not stood guarantor for you at all?

Your partner is unlikely to be affected as a result of your bankruptcy, but he is fully responsible for any joint debts - and that does not mean this is worked out on a 50/50 basis - so he will be held responsible for your joint overdraft.

I assume that you trade in partnership with your friend? If so, then the partnership will be dissolved as a result of your bankruptcy, and she can offer to buy your share from the OR, which I imagine is not worth a whole lot. Do you lease premises? If so, she will be left holding any liability under the lease and also be responsible for any partnership debts.

The items in your house are safe, unless you have anything of great value.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[catswhiskers]

Your partner is definately not responsible for any ongoing loan repayments if he is not party to the agreement. Are you sure that he has not stood guarantor for you at all? He is definately not involved. He wasn't there when I took the loan out. Funny thing is, the only reason they gave me the loan was because they decided that he earnt enough to help me if i needed it. Even though we aren't married. So what would have happen if we split up? I can't believe they did it now that I look back

Your partner is unlikely to be affected as a result of your bankruptcy, but he is fully responsible for any joint debts - and that does not mean this is worked out on a 50/50 basis - so he will be held responsible for your joint overdraft. Should we pay off the £2000 before I go bankrupt then?

I assume that you trade in partnership with your friend? If so, then the partnership will be dissolved as a result of your bankruptcy, and she can offer to buy your share from the OR, which I imagine is not worth a whole lot. Do you lease premises? If so, she will be left holding any liability under the lease and also be responsible for any partnership debts. Yes I am in a partnership with her(no where on paper though). we rent the property and there is no contract or lease. The stock in the shop is worth about £1000 between us. we have no debt for the business. how would they 'disolve the partnership?' The only records of me on the business is that we have a joint business accoutn (also with HSBC) and our tax return. What if I never mentioned the shop to the OR?

[catswhiskers]

Also, as I would prefer to have an IVA yet can't find a job, can my other half 'employ me'? How much would I need a month in order to probably be accepted for an IVA? I heard the minimum is about a disposable income of £75. As we share the house bills (and he is paying them all anyway at the moment) he could employ me for £200 a month (to manage his books, he's self employed). This £200 a month could be my disposable income and would be a more manageable some as currently I pay out nearly £650 a month to creditors.

[Adam Davies]

Hi
If you are going bankrupt there will be no advantage in your other half paying off the joint loan.You must disclose everything to the OR in bankruptcy and I can,t see you being employed by your partner as a way to enter into an IVA.You may be able to continue with the shop but this will be upto the OR.
Good Luck

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

[catswhiskers]

the reason I would get my other half to employ me would be because I was informed that I couldn't have an IVA if I didn't have a job. i.e no income = no payments for the IVA. but I was wondering if i could be employed by my partner to use my wages from that for the IVA.

[Adam Davies]

Hi
I understand why you want to do that but I just can,t see this being acceptable.However I may be wrong so speak to several companies and see what they have to say
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

[MelanieGiles]

Are all your debts with HSBC? If so, and IVA will not be suitable.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[catswhiskers]

Hi, no the bank accounts are with HSBC and as for credit cards, one with Egg and one with Tesco.

[MelanieGiles]

Hi there

An IVA could work for you, but you would need to be making payments of at least £360 per month to make it acceptable to creditors. There is no real problem with your partner employing you, so long as you can demonstrate a sustainable income stream to your chosen insolvency practitioner.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[catswhiskers]

Hi, Thanks for all your advise so far.

My loan with HSBC is actually £15000 but they have put PPI and interest on top which increases the figure. Does the fact that it is a bit less affect how much I need to pay? (i.e the £360 figure you mentioned) I have an appointment at my local CAB to apply for bankruptcy this Tuesday. Do you think this is my best course of action? I really am in 2 minds about it all.

[Adam Davies]

Hi
There is no harm in going to the CAB,It will give you time to think over your options.
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

[Darren]

Hi cats whiskers i recently went bankrupt and i included the joint account on that and haven`t heard a thing from them...although my wife wasnt working!!! everything in my name i put in and its all gone...im not a professional but i would say to you re the shop you run as partnership say you walked away from it for a sum not much just to see you through not thousands (and used it to live etc) 3 months ago and was looking for employment because it wasnt paying you or your debts would not be held against you and you could even say you did this venture with money loaned from your parents as a means of getting the money owed to creditors in the first place[:D] (which you probably did) also you can add this money owed to family on bankruptcy petition they cant take from you what you dont have and as long as they see you have not been really stupid with your creditors dosh you should be okay you didnt say if you owned your own home if this is the case you need to be in a position where your mortgage owed is roughly the same or less than its worth!!!! cheers Darren.

B word not as bad as you`d think ? (im gonna find out soon)Since found out and turned out great!!![:D]

[Darren]

P.S. you cant have secured loans either or your home will be gone!!!

B word not as bad as you`d think ? (im gonna find out soon)Since found out and turned out great!!!

[catswhiskers]

Thanks for the advice Darren,

well we rent, and the business is only worth £2000 in total. So if I said I had walked away, it would have been for £1000 anyway. I did borrow the money from my dad to set it up in the first place. Someone else told me that they probably wouldn't bother touching the shop because it isn't worth much. Melanie stated that the partnership could be disolved but I don't know what she means. The only paperwork that suggests I co-own the shop is the tax return and the joint business account. (The business account is also with HSBC, will they be able to touch the funds in this account if I go bankrupt personally?)