Sole Trader/Bankruptcy/Goodwill Sale

6WRC

Hi there, I am new to the site and looking for some advice as it looks like I am going bankrupt in a few weeks time. The majority of my debt is on personal credit cards (only a small amount to trade suppliers)

I am currently self employed (sole trader) and have a bricks and mortar shop (rented) as well as an e-commerce website. I registered the trading name as a trademark a number of years ago.

I now have a friend that would like would like to buy the registered trademark and the website and continue trading under the name as there is nothing inherently wrong with the business model as I have been trading for 10 years.

So my questions are:

1: Could I sell the trademark and website to my friend and offer up the money he gives me as part of my bankruptcy estate in a few weeks time? He has offered a figure in the £thousands.

My friend doesn't want the stock from the shop as he will buy new - so the OR will still have my £12000 stock in the shop to sell, as well as the fixtures fittings.

2: Would it be better to go bankrupt and then my friend negotiates to buy the trademark/website from the OR?

I think that I will get a better deal for my creditors if I sell it now and then offer the money up I get as part of the bankruptcy estate. It will all be done legally and if the OR looks into it he will see that I got a fair price for the trademark/goodwill.

What do you think?

sizzler

Hi there and welcome.

Can I ask are you lt or self employed?

nervousmother

It may be better to go BR first, for one, you will not get accused of selling it undervalue.. but two, your friend would probably be able to get it cheaper.

6WRC

Thanks for the quick replies.

I am self employed (not a ltd company)

I would like to sell it before going bankrupt because the price he has offered is definitely not under value. If the OR sells it to my friend cheaper - when I know he was offering more before I went BR - how is that a good thing for my creditors?

nervousmother

I really wouldnt worry about your creditors. Once you are BR it is out of your hands, the OR will deal with everything. If anything is sold to other people you probably wont get to know what it was sold for.
The majority of money will go to pay fees.
If you have substantial money in your estate there is a chance a private trustee will be employed.
There is nothing to stop you from selling it before BR as long as it is sold at the correct value. You will probably have to back up the price during a interview.

sizzler

If you sold how much would it raise and could it cover your debts?

If you sell after BR your friend would get it cheaper and moneys would got to OR to be shared amongst your creditors.

Do you not plan to trade after |BR and keep it yourself.

As far as all unsecured moneys owed and trade debts these will all fall into your BR. Do not make the mistake of paying trade debts or others first as in the eyes of the OR and BR all debts are equall and it is frowned upon paying one over another and can get you in trouble.

If you do sell before BR make sure you account for money and keep for the OR to tell you what to do.

A IP may be able to give you some better advice

Hope this helps sizzler:)

sizzler

Sorry one thing that concerns my thoughts is if you go BR and are self employed, you can re trade but only in the name you used before BR.

If you go BR and when you list your trading name and your friend has bought it. The trading name will apear on the BR register and may not look good for them and credit worthines

Just a thought:)

6WRC

Thanks Sizzler - definitely food for thought for me there.

So would i have to file for bankruptcy as "my name T/A trading name" or just "my name"?
If its just "my name" then the trading name can be used by my friend in the future

sizzler

I was self employed for twenty three years with trading name. My debts were for personal etc.

My trading name was listed with me as BR on sites etc.

I was allowed to retrade but only in same name.

i looked at selling name but on looking into it:mad:

Do you not want to re trade you can after BR, Only you have to tell people when getiing credit over 500 quid you are BR.

I even managed to get some trade account.:)

6WRC

I am not looking to re-trade with my current business after BR.

I will however be staying self employed but will be earning money from in a completely different way and it will not involve a shop!

sizzler

good luck any questins let us know.

any help pm me about trading:)