Bankruptcy & Ltd Company

redjellybean_2

Not sure if this is the right place for me to post but my husband and I also have a Ltd company and are getting ready to apply for bankruptcy.

We are personally liable for the company overdraft and credit cards, although there is another director who is not. The company has had no income for 3 weeks and has been struggling for the past year, therefore we have no choice but to declare as we have used our own credit cards and money to keep things afloat, workers paid ect.

We are resigned to the fact that this is our only option and that we will have to give our house back to the mortgage company and have made plans to rent .

My question is (as we have been unable to get through on the business debtline) can anyone advise if going bankrupt personally is enough or do we need to make the business bankrupt too, I know this may seem a silly question, but I just need some advise I cant remember the last time I slept properly, we have a two year old and I just need to get things sorted before it starts to affect him.

I have lurked on here for a little while plucking up the courage to post, everyone seems so friendly and non-judgemental I have taken the plunge

Thanks

Lors

JCS1

Check the wording of the PG's, but suspect that you going bankrupt means the bank will call in the PG's (and would therefore be included in your BR), but without the overdraft and credit cards would the limited company be able to keep trading?

Richard_S

redjellybean wrote: »

My question is (as we have been unable to get through on the business debtline) can anyone advise if going bankrupt personally is enough or do we need to make the business bankrupt too, I know this may seem a silly question, but I just need some advise I cant remember the last time I slept properly, we have a two year old and I just need to get things sorted before it starts to affect him.

I have lurked on here for a little while plucking up the courage to post, everyone seems so friendly and non-judgemental I have taken the plunge

Thanks

Lors

Hi Lors,

It would be best if you started a new Thread so people can see your questions in their own right.

If you declare bankruptcy you won't be able to act as directors and secretary, so you'd need somebody to occupy those posts until you're discharged.

Your personal bankruptcy would relieve you of all your debts, and personal guarantees for the company's debts, but the business would still be liable for its own debts; could you continue to trade under those circumstances.

You could apply for the company to be struck off but that would mean writing to the bank and all creditors who'd have to give their permission, and if they wouldn't you'd have to wait for the company to be liquidated by the Official Receiver.

I would have thought your best way forward would be to declare bankruptcy and commence trading as a sole trader or partnership, if that's feasible, or if not then start looking for paid employment until such time as your bankruptcy is behind you and the affairs of the company have been settled.

Richard

redjellybean_2

Thanks for the speedy replies, we have accepted that the company will not be able to trade without the credit from the bank, and are looking for alternative employment(interview for job in 1 week). The real question was whether or not we would need to also bankrupt the company or would our personal applications be enough to include the PG, its really about how much it will cost, as we both need to declare, so there fore wondered if us going was enough to include the PG without applying for the company also.


Probably should have added that other than the bank the company owes no one else, everything else is up to date.
Thanks

Lors

Richard_S

Hi Lors,

Declaring personal bankruptcy will definitely include the PG's.

It costs a lot more to wind a company up, so you're probably best just leaving the Ltd Co. and seeing what action the bank takes. It's unlikely that they'll do anything against the company unless they believe there are assets to be recovered.

It gets a bit messy which is why applying for the company to be struck off tidies things up, and the cost is only minimal; £25 or thereabouts. It's worth approaching the bank and asking them if they'd object, but it has to be done before you declare personal bankruptcy.

Hope that helps, but post again if it doesn't.

Richard

redjellybean_2

Thanks Richard that was really helpful, looks like we will be talking to the bank to see if they will object to this.

Now its just a question of getting all the paperwork ready for the personal bankruptcy which I am sure there is loads of advice on here about and waiting nervously for the court date and the meeting with the OR.

thanks

Lors

Richard_S

redjellybean wrote: »

Thanks Richard that was really helpful, looks like we will be talking to the bank to see if they will object to this.

Now its just a question of getting all the paperwork ready for the personal bankruptcy which I am sure there is loads of advice on here about and waiting nervously for the court date and the meeting with the OR.

thanks

Lors

Hi Lors,

There is a lot to do in preparing the paperwork but it's reasonably straightforward. There are some good diaries on here about making Court appointments and completing the paperwork. Wherediditallgo, Scarlett1974 to name but two.

Do a search for SOA and there'll be more than you need. Anything specific to your circumstances then just post the question.

We had a Ltd Co to deal with, and it's something of a grey area, but we did get it done eventually with no great expense or loss of "brain power".:D

Richard