Employer is filing for bankruptcy and won't be paying us.

ettinger1981

My husbands employer today informed him that he is filing for bankruptcy, (he is a sole trader) and that he won't be paying him for last month (pay was due yesterday) as there is no money to pay any of the employees. Does anyone know what recourse, if any, we have to get some money back. My husband has not been working for him for a year yet so statutory redundancy does not apply. I am due to give birth to our second child in 8 weeks and we cant afford to simply walk away if there is something we can do.

happyandy63

Check that he is going bankrupt not pretending. If he is sole trader rather than limited company then his assets are part of the liquidation. The law in Scotland and England is diffrent so check in your part of the country. From my understanding the assets will be sold to pay creditors. As a employee he would be a prefered creditor so whould see some money before other creditors but only if there was some assets. Does your husband have details of the liquidation?

happyandy63

Ask you husband if to ask the guy going bankrupt to pay him something or sell him assets for a nominal amount(before actually filling). Also tell your husband to take with him anything of value. Remember information can be valuable. A list of customer contacts can be very usefull if your husband needs a new job?

ettinger1981

Thanks for your advice.

As far as we can tell he has not filed his petition for bankruptcy yet but plans to in the next couple of days. Unfortunately there are no business assets as he is a service provider contractor for a large multinational delivery company and all the vans etc are on hire and thus are subject to creditor claims as well. Would his personal assets also be liable? (we are in England).

We have also discovered today that he requested the final payment from the company he has he service contract be paid into his partners account not the business account, this tells me that he knew this situation wAs imminent and that he was trying to hide money to protect himself. Is this illegal? If so what is the best thing, to confront him with it in the hope he will pay up so we are complicity or report it? We would not want to put ourselves in trouble for not reporting it.

Premier_2

Find out where to file details as a creditor and do it.

No promises, but (a) it'll provide evidence the employer has filed for bankruptcy and (b) your hubby might get something if he's lucky (perhaps 5p in the pound)

Unless the employer operated under a limited liability company, the individual would need to declare themselves bankrupt (and yes, that would include all their personal assets)

Edit: it would be very strange for a large multinational company to agree to pay their supplier other than to the supplier's official bank account.
In fact, in my experience, most multinationals get wind of any imminent bankruptcy very early (often before the subject knows) and is in their collecting their assets ... and often refuses to pay anything as it's often a clause within any contract that should the supplier go bankrupt, the contract is immediately cancelled. (and it's often that refusal to pay that often tips the supplier into bankruptcy)

JCS1

happyandy63 wrote: »

Ask you husband if to ask the guy going bankrupt to pay him something or sell him assets for a nominal amount(before actually filling). Also tell your husband to take with him anything of value. Remember information can be valuable. A list of customer contacts can be very usefull if your husband needs a new job?

Please do not get assets transferred for a nominal amount. Whilst I can see the attraction of doing this, if the OR finds out it will be classed as a transfer under value. They will write to your OH asking for payment The person going bankrupt also has to list any assets he has given away under value on the forms he has to fill in and file at court under oath.

You will need to check the insolvency register here:

http://www.insolvency.gov.uk/eiir/

This will then get you details of the OR handling the case so you can contact them regarding outstanding money.

If there are no assets to realise, then you may be able to claim from the government, more details here:

http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/guideforemployees.pdf

HTH.

JCS1

ettinger1981 wrote: »

Thanks for your advice.

As far as we can tell he has not filed his petition for bankruptcy yet but plans to in the next couple of days. Unfortunately there are no business assets as he is a service provider contractor for a large multinational delivery company and all the vans etc are on hire and thus are subject to creditor claims as well. Would his personal assets also be liable? (we are in England).

We have also discovered today that he requested the final payment from the company he has he service contract be paid into his partners account not the business account, this tells me that he knew this situation wAs imminent and that he was trying to hide money to protect himself. Is this illegal? If so what is the best thing, to confront him with it in the hope he will pay up so we are complicity or report it? We would not want to put ourselves in trouble for not reporting it.

You might want to consider reporting this asset hiding to the OR - they will investigate his affairs in more detail and will consider a bankrupty restriction order (which extends the BR restricitions for up to 15 years). They will also ask his partner to repay the money.

Annisele

Direct gov publishes some advice on what to do if your employer is insolvent - the Insolvency Service might pay some of the OP's husband's wages.

bitsandpieces

If the employer was definitely in business as a sole trader, their own assets should also be part of the bankruptcy.

File as a creditor, and I'd also point the OR towards the payment into the partner's account (you mean partner in terms of a personal relationship rather than business partner?) In terms of practicalities, though, I'd make provisions as if you'll get no money back - that way, if you do get some, it will be a bonus but you will be able to manage if (as is quite possible) you get nothing