Single mum and beauty salon owner - Bankrupt?

haddit

I need to pick your brains about my situ. I am a single mum , 2 kids and have a 190K mortgage on our home and 70 K of unsecured debt. I own 2 limited companies. Company 1 - a beauty salon is not making any money(runs at a loss) and has 30K of debt. I own 50% of Company 2 and has just been opened and is due to start trading in November - I believe it will be profitable. My biz partner and I have both invested 6K in this company to get it off the ground.

Last month I cancelled all of my personal direct debits except the mortgage, next month I will not be able to pay the mortgage (I am considering cancelling the D/D)

I believe BR is my only option, but desperately want company 2 to have a bash at being profitable. I feel such a responsibility to my business partner and do not want to let her down or to lose her investment. Can I continue with this business if I go BR. Should I transfer my share of the company into someone elses name to safe guard it from the BR? If so, how do I do that ?

Will my house be repossesed straight away or will they let me live in it for a year with me not paying the mortgage as I have 2 kids. I intend to get a PAYE job as well as having an interest in the second business? Is this good sense or should I keep my earnings as low as possible (not take a paying job) until the BR is discahrged ?

Also my mum does all my childcare and I pay her £1200 a month via child care element of WTC. If I were to take a paid job , will they WTC still pay my mums wages or will I have to? I do not want to take my dear mum 'down' with me. She retired from a well paid job to look after my kids and cannot afford to be 'sacked' by me - she would lose evrything too.

Hope you can help - any advise greatfully received.

Haddit x

dalip

Ring national debtline. They have a business helpline but i am afraid i don't have the number. They are the best people to advise you personally. BC is a very last resort and not an easy route to take so you have to make sure you have researched all optons before taking the jump.Dx

fiveyearplan

haddit wrote: »

I need to pick your brains about my situ. I am a single mum , 2 kids and have a 190K mortgage on our home and 70 K of unsecured debt. THats great news that it is all unsecured. I own 2 limited companies. Company 1 - a beauty salon is not making any money(runs at a loss) and has 30K of debt. Close it if its costing you money. I know how difficult this is because I had to close my own business. Do you have personal guarantees on everything? If so all that will go in your BR. I own 50% of Company 2 and has just been opened and is due to start trading in November - I believe it will be profitable. My biz partner and I have both invested 6K in this company to get it off the ground. If you are a director of the company you will have to resign but you can still work in it etc and go back to being a director when you are discharged from bankruptcy. If you need any loans for the company that is something your partner will have to shoulder.

Last month I cancelled all of my personal direct debits except the mortgage, next month I will not be able to pay the mortgage (I am considering cancelling the D/D). If you think you will be able to pay mortgage once shop is closed and you don't have any other debt then I'd fight tooth and nail to keep the house. How much is the house worth?

I believe BR is my only option, but desperately want company 2 to have a bash at being profitable. I feel such a responsibility to my business partner and do not want to let her down or to lose her investment. Can I continue with this business if I go BR. Should I transfer my share of the company into someone elses name to safe guard it from the BR? You will have to anyway because whilst BR you cannot be director of ltd co. If so, how do I do that ?

Will my house be repossesed straight away or will they let me live in it for a year with me not paying the mortgage as I have 2 kids. THe OR won't repossess straight away and not at all if the equity is low. I intend to get a PAYE job as well as having an interest in the second business? Is this good sense or should I keep my earnings as low as possible (not take a paying job) until the BR is discahrged ? Pop us your I&E and we'll see. The important thing is you earn enough money to keep your family.

Also my mum does all my childcare and I pay her £1200 a month via child care element of WTC. What, this seems exhorbitant but I won't comment. If I were to take a paid job , will they WTC still pay my mums wages or will I have to? I do not want to take my dear mum 'down' with me. She retired from a well paid job to look after my kids and cannot afford to be 'sacked' by me - she would lose evrything too. I'm sorry but you really have to look after you and your kids first, I know this may be hard.

Hope you can help - any advise greatfully received.

Haddit x

Hi and welcome.

debt_doctor

Ltd Company and bankruptcy
Hi

I need to pick your brains about my situ. I am a single mum , 2 kids and have a 190K mortgage on our home and 70 K of unsecured debt. I own 2 limited companies. Company 1 - a beauty salon is not making any money(runs at a loss) and has 30K of debt. I own 50% of Company 2 and has just been opened and is due to start trading in November - I believe it will be profitable. My biz partner and I have both invested 6K in this company to get it off the ground.

Last month I cancelled all of my personal direct debits except the mortgage, next month I will not be able to pay the mortgage (I am considering cancelling the D/D)

I believe BR is my only option, but desperately want company 2 to have a bash at being profitable. I feel such a responsibility to my business partner and do not want to let her down or to lose her investment. Can I continue with this business if I go BR.You cannot be the director of a limited co. whilst BR, you may be able to be an employee. Should I transfer my share of the company into someone elses name to safe guard it from the BR? This will almost certainly be looked upon as a BR offence.If so, how do I do that ?

Will my house be repossesed straight away or will they let me live in it for a year with me not paying the mortgage as I have 2 kids.The insolvency service would allow a year but your mort co can go for possession without allowing this. I intend to get a PAYE job as well as having an interest in the second business? Is this good sense or should I keep my earnings as low as possible (not take a paying job) until the BR is discahrged ? If you generate surplus income over £ 100 per month my any means you will be subject to an IPA.

Also my mum does all my childcare and I pay her £1200 a month via child care element of WTC. If I were to take a paid job , will they WTC still pay my mums wages or will I have to?WTC is not affected by BR itself, its affected by your income and the hours you work. If you fall below 16 hours you wont receive WTC at all. If they were happy paying for your mum as carer before then they ll still be happy now. I do not want to take my dear mum 'down' with me. She retired from a well paid job to look after my kids and cannot afford to be 'sacked' by me - she would lose evrything too.

Hope you can help - any advise greatfully received.

Good luck, but I think you need to ring the business debtline, their number escapes me at the mo but im sure someone will provide it soon !

Best,


DD


Haddit x

haddit

Thanks for all the advice so far - you guys have really given me strength this morning - was feeling so desperate and in the dark.

So just a couple more questions if I may....sorry may be a little confusing if you have not read my original post.

1. Company 1 (Beauty salon making loss) sublets the premises to company 2 (new laser hair removal biz recently formed with no debt). How do I go about resigning from the companies and when ? And do I get company 2 to take on the lease from company 1 ? If so can I pass all equipment from company 1 over to company 2 ? Or if I go BR, will the OR want to sell the tools of my trade ?

2. A previous post said it was good that I had 70 K unsecured debt. My house is worth 210K in todays market but despite trying for 4 months it has not sold. The mortgage is 190K. What happens as I cannot pay next months payment in terms of the mortgage company ?

3.With regard to WTC, I cannot predict what or if Company 2 will earn me. So should I still say my earnings are zero (which they are) so that I continue to get child care element. Does anyone know what the earning threshold is for the Child care element to stop paying 80 % of my child care costs? I have 2 under 5's who have child care for around 65 hours a week each whilst I try to earn a living from this failing business. As I said before , my mum is the registered child minder, so WTC pay her wages in effect.

Thanks again

Haddit

fermi

Hi Haddit

You had two identical threads/posts, so I've merged the replies together into this one so that it is all in one thread.

fermi

fiveyearplan

haddit wrote: »

Thanks for all the advice so far - you guys have really given me strength this morning - was feeling so desperate and in the dark.

So just a couple more questions if I may....sorry may be a little confusing if you have not read my original post.

1. Company 1 (Beauty salon making loss) sublets the premises to company 2 (new laser hair removal biz recently formed with no debt). How do I go about resigning from the companies and when ? And do I get company 2 to take on the lease from company 1 yes I would do that ? If so can I pass all equipment from company 1 over to company 2 ? Or if I go BR, will the OR want to sell the tools of my trade ? They very well may sell the tools from the beauty salon, at least things that you don't use for this new venture.

2. A previous post said it was good that I had 70 K unsecured debt. My house is worth 210K in todays market but despite trying for 4 months it has not sold. The mortgage is 190K. What happens as I cannot pay next months payment in terms of the mortgage company ? Do you want to keep the house? If so it is better if the value goes down a little bit longer. If you don't pay the mortgage company will repossess.

3.With regard to WTC, I cannot predict what or if Company 2 will earn me. So should I still say my earnings are zero (which they are) until you earn anything else you can only put £0 so that I continue to get child care element. Does anyone know what the earning threshold is for the Child care element to stop paying 80 % of my child care costs? I have 2 under 5's who have child care for around 65 hours a week each whilst I try to earn a living from this failing business. As I said before , my mum is the registered child minder, so WTC pay her wages in effect.

Thanks again

Haddit

Let us know what BDL have to say tomorrow.

peachyprice

haddit wrote: »

Thanks for all the advice so far - you guys have really given me strength this morning - was feeling so desperate and in the dark.

So just a couple more questions if I may....sorry may be a little confusing if you have not read my original post.

1. Company 1 (Beauty salon making loss) sublets the premises to company 2 (new laser hair removal biz recently formed with no debt). How do I go about resigning from the companies and when ? And do I get company 2 to take on the lease from company 1 ? If so can I pass all equipment from company 1 over to company 2 ? Or if I go BR, will the OR want to sell the tools of my trade ? Would company No.1 have to go into liquidation and sell it's assets to company No.2? I don't think you can just give assets to a new company

2. A previous post said it was good that I had 70 K unsecured debt. My house is worth 210K in todays market but despite trying for 4 months it has not sold. The mortgage is 190K. What happens as I cannot pay next months payment in terms of the mortgage company ? If you stop paying the mortgage the BS will eventually repossess, regardless whether your BR or not. If you go BR the OR will let you stay in the house for a minimum of 1yr before they sell, but you still have to pay the mortgage.

3.With regard to WTC, I cannot predict what or if Company 2 will earn me. So should I still say my earnings are zero (which they are) so that I continue to get child care element. Does anyone know what the earning threshold is for the Child care element to stop paying 80 % of my child care costs? I have 2 under 5's who have child care for around 65 hours a week each whilst I try to earn a living from this failing business. As I said before , my mum is the registered child minder, so WTC pay her wages in effect.

Thanks again

Haddit

Hi Haddit, I don't know much about business debts, but you need to seek professional advice before giving assets away.

fiveyearplan

The OR will only seek to sell your house if they are likely to make over £1,000 profit. You will also get first refusal for friend or family member to buy it (or you once discharged). If you manage to get into negative equity then you can buy your interest in the house for £1.00 plus about £250 solicitors fees.

You say your house was valued at £210,000 was that a realistic valuation or possible a keen estate agent. Your valuation is meant to be a realistic price that would lead to a sale in a reasonable time.

fiveyearplan

I forgot to ask - is the house/mortgage solely in your name?

I am sending you a PM.

kazwookie

£1200 per month in childcare, I know it is your mother, but I am shocked.

I suggest to get legal advise re the companies and what 1# can give / sell to 2#.

Good luck with it all.