Husband's Bankruptcy

chem15t

Hi, sorry if I do this thing wrongly but I have never posted before. My question is this: my husband has a retail business which is failing and going to be closed down next month. He has about 70K in personal guarantees for loans and the lease on the property and 30k in credit card debt. We have a house which we are trying to sell which has approx 100k equity in it. I have asked my husband to approach his creditors and ask for time to repay and tell them that as soon as the house is sold we will repay in full. We can afford the mortgage if we pay interest only for a while as I have a full time job. We could manage all our other outgoings on my salary and whatever my husband can earn working for someone else, provided we do not have to repay the 100k straight away. My husband thinks the only way out is to declare himself personally bankrupt?? I would prefer to try the alternative route. Has anyone any advice please?

DVardysShadow

Basically, I think your instinct is right.

I note that the debts amount to about the value of your equity, so if you have to sell cheap, you may pick up a debt of 10K. If the business debt is in a limited company, you should let the company fold with the debt outstanding - it is a bankruptcy option built into a limited company. But if all of the debt is ultimately personal, you need to amke sure that you treat all his creditors fairly and not prefer to pay the one who screams loudest, but give them all equal shares of any payout.

chanz4

if a personal guarantee was made he would be liable even if it was for an ltd, if makes himself bankrupt they will take the house due to how much equity it has. Consult professional advice, dont rely on the forum as a lot is at risk

SouthCoast

Business Debtline can be found here:

http://www.bdl.org.uk/

DVardysShadow

chanz4 wrote: »

if a personal guarantee was made he would be liable even if it was for an ltd, if makes himself bankrupt they will take the house due to how much equity it has. Consult professional advice, dont rely on the forum as a lot is at risk

You are right, but a personal guarantee only applies to a specific debt

chem15t

Thanks for the advice. His debt is all personal, can't fold the company and lose it. I will ring around for advice after the Bank Holiday, I need to know much more about the effect of his bankruptcy on me. He wants to go bankrupt as i am sure a lot of people will understand, because he does not want to fight anymore. I want us to do the right thing all round and it is so very complicated. Thanks once again.