www.iva.co.uk

This is a bit long winded, but I think I really need help.

I'm going to lay my cards on the table.

Over 3 1/2 years ago my husband was an employee of a small firm with 3 other employees. His boss decided he was going to retire & put the business up for sale. He had worked for the company for 18 years. He had been his first employee & had over the years learned all aspects of the business. It was a thriving company at that time. He was in charge of the day to day running in the latter 5 years.

Worried about our future should the business sell, we discussed & we decided to re mortgage our home & get a Small Firms Business loan to buy it.

That was 3 1/2 years ago. The business lost a large customer within months of us buying it. The customer was an acquaintance his ex boss & we found out later, he had already decided to close before our purchase. Ie: his ex boss knew this was going to happen but omitted to inform us.!!.

Anyway.

The business moved along at a reasonable pace with making new customers & losing old. It never made a fortune, just enough to cover the bills & wages.

My Husband & I had worked every day for 3 1/2 years without a holiday, only taking a week off work at Christmas time. Last year (Jan 07) we had a big slump in work & we had to make the staff redundant, leaving just me & my husband to carry on. We had struggled for the last 20 months keeping the business afloat, selling personal items to keep things going. This year we have lost a lot of customers due to them going out of business. The phone calls for work had dried up. August was always the worst month of the year for work due to factory holidays.

We found ourselves in the position that there was no money left in the business for wages. The money coming in just covered the overheads & Small Firms Business loan.

We did wind the business down on 22nd of August, fortunately we managed to pay all our suppliers so we owed the bank £18,000, which had a small loans guarantee insurance policy that covered any outstanding debt.

Now

Because the business failed, we are now both out of work and receiving benefits. We knew we could not meet the mortgage repayments. We did immediately inform them of our circumstances and are now nearly into our 4th missed payment. We know that our property of 19 years will shortly be repossessed and we will be homeless.

Also

In May of 2007 we personally entered an IVA which we were paying £431 each month. This was going well until the business failed and we are now 3 months in arrears with this. We have explained that we are only receiving benefits and cannot afford to pay them.

I had told them that it may be in our interest that the IVA failed so that we could apply for bankruptcy. They have been very tolerant and asked whether we would consider a payment break or reduced payments. I said we couldn’t as we were just receiving benefits.
I feel I may have been a bit hasty on that, again any advice at this stage please.

Now this is the bit that I am worried about.

When we took out the IVA we did and still own a little Suzuki carry van, year 1999. They did not put this in their list of assets as we used this for work purposes, even though it is registered in our name. It has no MOT at present. They also did not list our year 2000 Mercedes A140 car as my husband is disabled. And to be honest we did not mention that we own 2 motorcycles as we did not envisage this mess that we are now in, nearly homeless, out of work, and basically now worried a lot.

If we applied for bankrupty and just said the IVA failed and produced their latest statement of creditors would there be an investigation and would we lose the lot and get A BRU.

Or, do any of you think that the IVA would accept a really low reduced payment to prevent us from going bankrupt, bearing in mind that we are only receiving benefits and could possibly only afford about £30 or £40 max per month. They do seem to want us to negotiate.

HELP.

So sorry to hear of your predicament.

When your business failed did anyone advise you of having ago against the seller for a "material non-disclose" of relevant information at time of sale/purchase? Did you not seek professional advice?

On the personal front you should immediately have a chat with your Supervisor explain all of the facts and the non-disclosure of assets and see whether a variation is appropriate or advisable or whether bankruptcy might not be a better option. In bankruptcy the vehicle would be safe but you'll have to demonstrate about the bikes and why they are needed.

Hi there and welcome to the forum. So sorry to hear about the failure of your business - when you have tried so hard over the last couple of years.

I am afraid that I do not feel that such a low repayment would work in an ongoing IVA, and given the circumstances you describe, it would appear that bankruptcy would be the most sensible option.

With regard to the misdeclaration of assets - it seems that the two vehciles which were disclosed were left out due to your IP's hand (I cannot understand why as they have helped you to misdeclare for no apparent reason) and the motorbikes were on your part. Just be open and honest with the Official Receiver if you do go down the bankrutpcy route, and expect to keep one of the vehicles if you can justify the need for private transport, with the others being taken and sold to help pay your creditors.

Another question.

Whilst we were in business, although knowing that it was struggling, we had a third party who was willing to try to help us put even more money into the business to help it survive.
A two part payment of £3000 and £4000 was given to the business within a few days in January of this year to keep us going.
This was under the understanding that my husbands motorcycle would be taken as security and possession of the said person, as it was the only asset of any value.
DVLA records show that my husband is the registered keeper, but a registration document is no proof of ownership.
Will the OR understand this?

No - because the security against the motorcycle is probably not valid, and you should not prefer a creditor when you are facing bankruptcy proceedings.

How much is the motorcycle actually worth?

The motorcycle is according to Parkers motorcycle valuation:

private good £4515

private poor £2885

part ex £3440

The 2 part payment was put into the business account to try to keep it going.

We do still have the business accounts to show this transaction.

Any advice much appreciated again.

Do you have any written agreement between you and the third party stating that the loan is secured on the motorbike?

Unfortunately not written.

Just the bank accounts statements.

Unfortunately, the motorbike will be an asset which will vest in the eventual Trustee, and I cannot see how your friend can lay any claim over it to be honest, givem the circumstances you describe.

Hi Bassmomma and welcome
What a story, and well done to both of you for trying to keep things going.
Bankruptcy is your best option,on the info given, just be upfront with your official receiver, this is the chance to get everything behind you.
Regards