Help for a friend...

32Canuck

Hi all,

I'm writing this on behalf of a good friend who has health problems meaning they can no longer run their business. This in turn is causing a lot of stress and turmoil, and is making the health issues worse. Having a young family means that they don't often get time to research on the internet, so I thought I'd see what I can find here..

A bit of background... Set up as a sole trader, my friend runs (or rather used to run) a healthy living shop/delicatessen which he is in the process of winding up as he can no longer pay the lease and suppliers, or the daily overheads. Faced with having to buy himself out of the lease (about 15k) and paying off suppliers, (£?) he is doing all he can to sell off stock that cannot be returned, equipment etc. But I fear that this is going to take forever and not really solve the problem.

I fear he's being fed lots of 'hear-say' about 'them taking everything' if you declare bankruptcy - meaning he'd be left homeless, car-less etc. with his young family to support, which is why he's not yet chosen a route...

Can anyone give me advice to pass on to him about what to do now, where best to go to decide whether bankruptcy is right for him etc?

I'd really appreciate your help as I can see all of this slowly killing my friend, but I don't have any real life experience of any of this myself...

This forum looks like a really useful resource, and I've already started looking through the list of 'read this first' links... Thank you!

M

dancingfairy

He should get in touch with someone like Businessdebtline which helps people deal with business debts etc. They are related to National Debtline.
I'm sure any of the debt charities (National Debtline, StepChange, CAB, CAP) should be able to help him out.
Does he own his own home? If there is equity or likely to be equity in the next few years then yes the Official receiver may be interested in it but if not then he may be able to continue living in it (assuming he can pay the mortgage and any secured debts and that maintaining the mortgage is not massively more expensive than a local rental). They don't automatically take your house. Depending on the situation he may want/need to move into rented and may be able to claim housing benefits and the like.
If he has a car worth over a 1,000 pounds then the OR probably won't allow him to keep it. I think there may be special rules if there is a particular need (ie disability to keep an expensive care) but generally you are not allowed to keep them. He may be allowed to run a cheaper car though.
Oh and just to clear up one popular misconception, nobody comes to your house and makes a list of your goods. They are not interested in your tv/laptop/childrens toys/ household items at all unless they are of significant value (antique jewellery/old master paintings, that sort of thing).
Hopefully you will find a lot of info you need to help your friend on the links but if you have any specific questions just ask (or better still get your friend to ask himself).
Have a chat with the debt charities and they can advise him whether bankruptcy is the right route for him or whether some sort of payment arrangement might work better.
Best of Luck
df