HELP!!!!!!!! Partner £100k+ in debt

l.p.s.c

Hi all

If anyone can help I would be eternally grateful

My partner is over £100k in debt at the last reckoning. His two largest debts are approx £30k on credit cards which his mum has taken out to try and help him get out of his debt!!!! And £20k in unpaid franchise fees but he also owes numerous amounts on unpaid bank overdrafts, household bills on his last two homes as well as business expenses for his current and previous shops (he is a self-employed hairdresser) including PAYE, self assessments tax (£6k+) etc etc. I think you get the point.

When we met I knew that he was in debt but not the extent of it as he admitted that it embarrasses him and he doesn't like to talk about it. (he has a serious case of head in the sand or head in the clouds!)

In the beginning I tried to help with the result that I now owe £1,600 on a credit card but I soon learnt that that wasn't the answer.

We now live in my house for which I have a mortgage and for which I manage the bills, other half has to pay just £100 per week towards all bills which I am glad he is on the whole managing to achieve. The problem is that I feel unless he goes bankrupt we have no future. My salary is £18k and other half has two children from his previous marriage. The house has only two bedrooms and to get a mortgage one day on a bigger place would be difficult. Partners answer is that he could self cert and get a mortgage but he has never filed a set of accounts in the six years he has had the salon. I am a trainee accountant and I haven't had any success!!

I want to help in any way I can but I feel that all the pressure is on me and it is making me resentful. His ex didn't work, did no house work and helped put him further into debt, she is currently refusing him access to the children and we are going to have to go to court for access and she is going to try for maintenance.

Partner is unwilling to go bankrupt if it means him losing the business and says that even if he did he would still need to pay his mum and the franchise debt (as his franchise boss is a good friend!!). But to me £50k of debt is better than £100k+ and his mum says she is happy with the minimum payments. At the moment he thinks the only way out would be to sign the shop over to me (his family won't have it because they don't agree with bankcruptcy), declare himself bankcrupt and carry on. Although I know that he could run his salon profitably (I've done an extensive number crunching exercise) I worry about taking on the risk.

Is there any way that he can keep the salon and still go bankcrupt? Can we set up a limited company, protecting me from the debts? Can we do this if the business is part of a franchise? My knowledge in these fields is very limited.

If anyone can offer any advice

Thanks

Lisa (lpsc)

dalip

Afraid you need "expert" advice on this one. I would try ringing business debtline,they are reported to be very very good. Dx

Here is the number 0800 197 6026

Another thought i think business and personal bc are two seperate petitions,but please get that advice,as i could be wrong!

iquit

Sorry to hear about your situation. I agree with Dalip - expert advice is crucial.

So_Sad_Angel

Hi Lisa

Welcome Hun....sounds like quite a tough situation for you both at the moment.

You need to get advice...Nat BusinessDebtline is looking best port of call initially. They are a charity so advice is free & impartial.

Your OH may be allowed to continue as a sole trader....I am assuming he is not Ltd Co due to his liability to the franchise debt etc. Also note that if it is Ltd then he cannot be a Director whilst undischarged bankrupt.

I do however feel that you should look very carefully into the reason these debts came about....make sure the margins in the business are adequate as post bankruptcy he will not have overdrafts/credit to fall back on. Cash flow could be very difficult if he was using personal credit to bolster the business.

Can`t help on whether you should get involved in the business ....maybe chat to Businesslink to see if that is do-able under the terms of the franchise agreement. Main thing is to get advice before you do anything.

Take care, Angiexx

Bethankim

Hi Lisa and welcome,

i can only echo what others have said.
I would be vary wary about taking over any of his liabilities you could end up with more problems than it solves.

I know this may not be what you want to hear, but part of moving forward when your in huge debt is accepting it and taking responsibility, its wonderful your supporting him. but unless or until he accepts the pickle he is in, he may not change his ways.

Good luck and we will offer as much help as you need.

Beth
x

jamesb1239

I was under the impression that with Bankruptcy you couldnt pick and choose which debts were included as if he was to continue to make any payments to his Mum or to the Franchise then it would be classed as favouring a creditor. Might be wrong though but thats the way I understand it

So_Sad_Angel

jamesb1239 wrote: »

I was under the impression that with Bankruptcy you couldnt pick and choose which debts were included as if he was to continue to make any payments to his Mum or to the Franchise then it would be classed as favouring a creditor. Might be wrong though but thats the way I understand it

Thanks Jay thats my understanding also.

The OR will not allow payments to be made on any debt pre BR date....as it is seen as favouring a creditor.

Angex

debtinfo

If he goes bankrupt the business will cease, the amount on the franchise will be included in the bankruptcy. Whilst he can start a new business the next day, the franchisor will likely not be in a mood to do business as he wont get the money already owing to him although your partner could start his own business seperataly. If he tries to put it into a ltd company to protect it he must transfer all of the debts along with the assets of the company, otherwise the OR will come looking for them, The same applies if you transfer it into your name. One possibility (although not nesessarily a good one) is that after he goes bankrupt and it is shut down someone could buy the assets and lease/franchise agreement from the OR at a fair rate but this would be at the ORs fair rate and it may be cheaper just to start from scratch

headoutofsand

When I went BR the franchise two of them went to the OR and DI is right the franchiser is not a happy bunny ( both of them) The OR, if I wanted to would let me carry on as a sole trader minus the franchises in the same sort of business as before, an offer I declined.

Captain_Longbeard

I was self employed (ltd co, sole director) and was personally well over 100k in debt.

As said on this thread, BDL (Business Debt Line) were priceless for me. Long wait time to get through (this was back in March, can only imagine the wait is much longer now) - but totally professional and decent people to talk to, and first class advice!

I also used National Debt Line for the personal debt sides to my enormous amount - and again, they were totally fantastic, and I cannot praise them enough.

And also the people on this board :-)

It seems (and is) a lot of money - but it isn't worth making yourself ill over. Speak to these 2 debt advisors. it's all confidential, and trust me from personal experience, you will see things much clearer.

Good luck.

tigerfeet2006

As the Captain and the others say talk to BDL and NDL to get some perspective on this. Links and no's in my signature.

All the best with it all