Major problem no 1

[ellie 553]

I spoke to our IP today - he's putting together our proposal for a full and final settlement on the sale of our business which is going to happen next monday hopefully.
He said that on completion we have to ask our solicitor to put the money into a client account, and that all those funds will go to our creditors on approval - so far so good.
Problem is that my ex-partner is going to be homeless from next Monday, as he lives above the shop. Our business bank account has a £5000 overdraft facility on it at the moment - which we havent touched but all income from the business is tied up in wages and daily purchases.
Basically he has no money for a new flat. The original advice from our IP was to use our income from the business but it has been so quiet we have only been able to take out £200 a week for the last 2 months (thats for both of us + 2 children). My mum has been paying my rent and obviously once the business is sold we are both unemployed...
I'm sure that under bankruptcy I read that you are allowed basic living expenses, removals etc. We have £150,000 to offer on debts of £191,000
Any ideas or inspiration gratefully received !

[MelanieGiles]

Hi ellie

Presumably your business overdraft is included within the IVA, as I do not believe you are trading as a limited company are you.

This is easily solved. Work out how much your partner's business debts are, and ask your IP to retain those from the offer he makes to creditors - of course with full disclosure to the creditors.

At the end of the day you are offering a good return to creditors, and your partner does have to live!

Good luck with the proposal, and which IP firm did you decide to appoint to act for you?

[ellie 553]

Hi Melanie !
We havent used the overdraft - it was just put on our account after a discussion we had with our business account manager way back in November. Its not included in our IVA at the moment as we were told by our IP not to use any credit facilities at all but I can't see any alternative but to use it really, as theres no way we will take enough cash to cover a deposit and rent for a month.
We are trading as a partnership so all the debts included are both personal and business and all joint debts.
We decided to use Richard J Smith & Co in Truro & our IP is Hamish Adam - it was a bit too hard to get to Plymouth as since Xmas it has been crazy - house sale, 2 removals, business sale & now another removal, not to mention the personal stuff....Still, its all getting to the right place and hopefully won't be a problem for too much longer

[MelanieGiles]

OK - I assumed that you meant you had a £5,000 overdraft!

Hamish is a good IP and you are in safe hands. Why not ask him if you can use the overdraft until the sale is effected, and then pay it off with the sale proceeds as soon as they are received. This would of course have to be with the agreement of the bank, and this may not be acceptable to them if they are already a creditor.

Alternatively is there a family member who could help out in the short term and again be repaid out of the sale proceeds? What advice has Hamish given you on any of these points?

[ellie 553]

He has just said to take whatever we need out of the business income, and that any debts have to be included in the IVA. So I guess that if we used the overdraft now that could be included in the IVA ?
I will ring him tomorrow as I think he was saying basically to use the overdraft but couldnt officially advise that as it would be using credit. He did definitly say that all proceeds of the sale would have to go into the IVA offer though so no chance of using any of that money

[MelanieGiles]

But that won't work if you haven't been generating profits.

I am sorry I don't agree that all of the monies you generate from the business sale have to go into the IVA. I would be allowing you to retain sufficient monies to at least rehome yourselves given that you live on site.

[ellie 553]

Ok thanks Melanie - now I know that is possible I will ring him tomorrow