In Over My Head

TwistedH

Hi everyone, my name is Chris, I'm 22 and right now I'm in way over my head.

I've managed to accumulate over £18,000 of personal unsecured Debt, and business debt of £20,000 (£4,000 personally guaranteed, £10,000 of due to HMRC).

Towards the beginning of last year I started my own company and things went very well. We had a 6 month turn over of over £200,000 - I never thought things would end up like this.

Over the last two months the company has sustained heavy losses, to the point where I had to inject all the money I had saved over the last year just to keep going. Now it has come to the point where the company is no longer sustainable.

I'm aware of how to take the company through liquidation and will be proceeding with this before the situation gets any worse.

Bankruptcy would be the best course of action for my personal debts as I now have a near nil income and this will continue until I can close the company and find an alternative income. But I have a problem!

My main problem is that £12,000 of the personal debt was guaranteed by my dad. This was on borrowing I made a couple of years ago, and up until recently I wouldn’t have dreamt I'd ever be in a position where I couldn’t afford to pay it.

I now have a serious guilt as I haven’t told my dad how bad things are at the moment, its literally tearing my up inside. He put so much faith in me, and I have let him and everyone else down.

I know the first thing I have to do is come clean and I know he will more than likeley give me the support I need but I feel so bad and just cant face it. It's been seriously affecting my health recently and my Dr has placed me on anti depressants which I hope will help.

My options seem to be limited to liquidation and bankruptcy. I don’t know which I should start first, or if the bankruptcy will force the insolvency. I'm really at a loss where to begin.

Any advice or recommendations welcomed

Trying to stay positive
Chris

mazzatee

Hi twisted
It is important that you get impartial advice from a debt charity. Try business Debtline on 0800-197-6026 or CCCS on 0800-138-1111 who have a self employed section.

After you have spoken to either one of them you will be able to make a clearer decision.

Good luck and keep posting as I'm sure others will come along to help.

TwistedH

Thanks Mazzattee

I have recently completed a Debt Remedy report on the CCCS web site and subsequantly spoke to them - their recommendation was bankruptcy. I dont have any income and have been using my remaining credit card for essential living costs.

The only thing I didnt mention was that my dad was a guarator on the debts. I'll try phoning Business Debtline later.

Thanks
Chris

maxmycardagain

playing devils advocate here.....

dad must have known the risks when he stood as guarantor surely?

is he aware of the situation?

maxmycardagain

as far as the ltd company is concerened, you could just resign as a director and walk away. most do.... nature will take its course

(unless you owe some big nasty hairy a****d gorillas, who you may want to placate first)

TwistedH

maxmycardagain - He did know the risks. But it was something I never imagined I would have to tell him. He's been more supportive to me over the last few years than I can possibly explain, which is why I feel like I have let him down so much. I'm sure he will continue to show the same support but I'll have that feeling of guilt that I've put him in this position.

Furtunatley our creditors are made up of Lloyds TSB, HMRC and our phone company. We have a large amount of VAT due to be paid back which will cover more than 50% of the amount due to HMRC. No gorillas fortunatley!

Also, my intention is to notify our creditors of the situation and explain that the company should be viewed as insolvent. I'll be inviting the creditors to initiate liquidation as the company has insufficient funds to do so voluntarilly.

I wanted to take the most responsible action and didnt think of resigning as an option.

Thanks
Chris

maxmycardagain

your choice

id say ....no........but you do it your way

creditors once notified will become aggresive, with CCJ's charging orders and chaisng any guarantors

HSBC will instantly freeze your bank account

The taxman is the joker in the pack, thier officers have baillif powers without needing a CCJ

The VAT man is another thing, you dont mess with Mr Vatman.