any advice please

thenumptys

Hello all
After reading this forum for a few weeks, we decided to jump in to try to get some answers to questions that are maybe not major issues but are worries non the less
We are seriously considering going BR very soon.

A bit about ourselves;, we have been self employed for the past 10 years or so, and are now in 110k worth of unsecured debt. The debt has arisen after our first business was forced to close, as the landlord sold the building where we traded from. We went on to try various business ideas afterwards, remortgaging and using credit cards to live on as things got going. We have always had a fairly good turnover so it never seemed to be out of control. Circumstances change of course- and my husbands sister become terminally ill approx 18months ago, and our business was neglected as he was involved with her care and the general trauma of it all. I suppose we relied on credit cards to pay any bills that we couldn't. The credit crunch hasn't helped as people have spent less over this last year and being in business has become more difficult.

So to sum up we own 2 properties that have both been for sale for 2years, they are priced very competitively, but nothing is happening there!
The equity in the 2 would be approx 30k. we owe 110k of unsecured debt.
We have negotiated with our creditors and some have been helpful, some not, but overall, the stress of dealing with them and still having to pay out vast sums every month is not getting us any further out of debt, there is no way that we can pay them back as things are at the moment or in the forseeable future

There are a few questions that we need a bit of help with,
how long generally does the process take once you file your bankruptcy at court, are you given a time scale in which to move out?

can we file for BR as a couple?

will we ever be able to buy a house again?

We have not had any accounts for the last 2 years, would this be an issue with the OR?

What would happen with all of our personal possessions, would somebody come and look through them? what about kids tellys and computers? would they be taken, ( myoldest son is 18)

It is all a bit overwhelming but just writing this is helping, we have talked about nothing else day and night for the last few months, any body going through this must know how frightening it can be, but there is a glimmer of light at the end now that we have accepted that this is the only way forward, thnks for listening and any advice would be very welcome

LilyBart

Hello Numptys,
Just wrote a reply which disappeared into the ether, I think. If this is a carbon copy, apologies.

Someone more experienced will be along shortly. Meantime, the first thing to note is that giving up your properties for voluntary reposession is a separate process to petitioning for bankruptcy. Search "vol repo" on this forum and you will find plenty of accounts of this.

The time you choose to move out is a personal decision. Some (myself and Billy included) did it before filing for bankruptcy and before our credit rating crashed. Others have waited until afterwards. It is a surprisingly slow process.

The court experience itself is usually same-day. Some courts operate on a first-come, first-served, no appointment basis. Others will require you to book in for an appointment, some as far in advance as the end of Sept. Call your local to find out what they do. They won't bite your head off and will be happy to send the forms so you can read them thoroughly.

You cannot petition for bankruptcy as a couple. You must each do a separate form (Billy and I were 2 minutes apart, but went in to the judge together). This will cause hours of sweating over a calculator as you work out individual responsbilities in your I+E, but once you've been declared bankrupt, it is likely that you will both be assigned to the same case worker in your local Official Receiver's office.

You can buy a house again, but the interest rates may be higher than they would be for people who have never been bankrupt and some lenders will not be interested in your custom. There are stickies at the top of this forum about credit post-bankruptcy.

The lack of accounts will be an issue. You need to be able to tell the judge that you have taken advice, and in order to give that advice the person you consult will need a rough idea of income and expenditure. Call business debtline. Working through two years of accounts isn't fun, but you will need to have an idea of what your liabilities to HMRC and should include these with the bankruptcy. Getting your accounts in order will also reduce your chances of getting a BRO, which can be made on the grounds of not running your business with due care. (Don't panic - it's more often given for wild gambling sprees etc)

Basically, the more you can get your paperwork into order, the happier the OR will be, and, therefore, I would guess, this will make him/her more kindly disposed towards you. From personal experience, I also found that by doing my accounts, which was hideous, it was much easier for me to write the statement at the end of the form where you explain how you arrived at this position.

Excepting valuable art works, antiques, cars, electrical equipment - which you should declare as assets - the OR will not be interested in your household items. Your kids' computers and tellies will NOT be touched as they are your kids' possessions and not yours.

As a self-employed person, the amount of paperwork is truly daunting. But there are lots of people here who can advise/soothe as required. Take a day reading through the threads here and you will find lots of useful information. Don't worry, it does get easier. It's just a mammoth amount of organisation.

all the best
Lily

tigerfeet2006

I haven't got anything to add to Lilys excellent post but just wanted to say hi and welcome to the forum and well done on taking steps to getting your life back under control.

You must get professional advice on this as Lily says ring Business Debtline (link and number in my signature.) The judge will ask if you have done this and can delay your petition if you haven't.

Keep asking questions and we will help and support you all we can.

All the best.

LilyBart

Thanks Tigerfeet. Where would we be without that signature? One more point to add to the Numptys, Saturday afternoons tend to be quiet round here, Sundays too. So don't feel we are ignoring you! With specific regard to self-employment and bankruptcy, it is worth asking the same questions more than once then pooling the answers, which can differ wildly. Lots of grey areas to unpick but it does eventually ease up.

k2nga

Hi,

Nothing to add as you seem to have some great advice but i have been crying at the your name it had really made me laugh i wish i had come up with that. Good luck

thenumptys

Thank you for the replies, there is so much to read about every aspect of this . I think our first step is the get some accounts for this past year, which can be done, do you think this will help us a bit ? we will also speak to the accountant about the previous year to see what he suggests, and I will get onto business debtline.
just another question, maybe one I can ask business debtline, would I inform the INLAND REVENUE if we were going BR? I don't think that any sums owed to them would be much as we haven't really made much in the past 2 years.

thenumptys

k2nga, glad it made you smile, at least we can still laugh at ourselves.

k2nga

yeah thats the spirit you need to have a laugh from time to time so not to grind yourself down over it.

I would say call the debtline and ask about the accounts it might be that it does not matter what state they are in. I would not like to see you spend money on them if there is no need. As for the IR i would not contact them as if there is a need the OR can sort that out but if you owe them money make sure its in your partition.

LilyBart

It will definitely help to have your accounts up to date, and it will help you as much as it will help the OR. Check with Business Debtline, but I can't see any reason why you should inform any creditor that you are going BR before you actually go BR. I have no direct knowledge of how HMRC would respond in those circumstances but there have been tales on here of other creditors attempting to crank the pressure up a bit in a last ditch to get some money prior to bankruptcy. You should also speak to CCCS and ask for a self-employment specialist. The woman I spoke to on my and Billy's behalf was wonderful and very detailed.
One final point: if you're making token payments in the immediate run-up to bankruptcy, you must ensure these are for indentical amounts. Do not allow any creditor to pressure you into favouring them.

Debt_Free_Chick

thenumptys wrote: »

I think our first step is the get some accounts for this past year, which can be done, do you think this will help us a bit ? we will also speak to the accountant about the previous year to see what he suggests

You need to do the accounts in order, starting with the oldest year first. There two other boards that might help here - the Small Business board and the Cutting Tax board

Either can help with accounts for a sole trader - just click on the name of the board, in bold above, and a new window will open.

LilyBart

ps by having the accounts up to date, I don't necessarily mean having them processed by your accountant. Just a list of income and outgoings will help - the sort of thing you submit to your accountant in the normal run of things.

edit: cross-posted with debt-free-chick. yes, in order, as what happened in 06/07 will affect 07/08.