Do I... don't I?

AKOOLA

My brother approached me in late 2012 and asked if I would like to start a new business with him. I agreed and resigned from my job of eighteen years. We opened our restaurant in March 2013 and despite his promises he put very little money into the business. I borrowed money from friends, my wife's family and the bank to get our venture off the ground. My brother even took £1000 from the business and said he couldn't return it because he had big debts. During a busy Easter our dishwasher failed and was beyond repair. The business had not made enough money yet and my brother refused to help. It was impossible to work without one, so I used my credit card to buy a new one. He watched as my wife and I got deeper and deeper into debt subsidising the business. The final blow came when we hadn't taken enough money to cover the rent and again he made excuse after excuse as to why he couldn't help. Again, my wife bailed us out using her overdraft facility.


Each of us brought different skills to the venture... he was the chef. So when he walked out in June 2013 (just three months after opening!), this crippled the business. The business was not in a financial position to afford a chef, my wife and I were totally spent out and his departure occurred only weeks before the busiest time of the year. I did not have the necessary skills to run a busy kitchen, but luckily a friend stepped in to help me for a few weeks so that I could fulfil obligations to local businesses and staff. I was forced to close the doors at the end of July.


For whatever reason, he will not entertain the idea that he is jointly responsible for these liabilities and nor will he pay me the money he owes me. I did the right thing after closing the doors and informed our creditors the business had ceased trading. He has refused to enter into any dialogue with them, so they are coming after me for their money. My wife and I are totally broke, I have only got a few part-time hours and stand to repay up to £26000 from a disposable income of £200 per month. The bank (NatWest), despite my letters telling them we had ceased trading, appear to continually ignore me and have kept lumping more and more charges onto our account. Unbelievably, they sent me a letter saying, “despite our best efforts we have been unable to contact you”. I have proposed a repayment plan with a number of the creditors (which none of them like) and now I'm trying to get my brother to accept his responsibilities.


I do not wish to go bankrupt, but it does seem this might be my only option. I am worried however that if I go bankrupt will the creditors come after my wife? She had nothing to do with the venture (she has her own career) except to support me while trying to get it off the ground. I have a van worth £1500, which is my only means of transport to work and back (I work shifts with odd hours). My wife has a lease car and travels across different counties for her work. We do not own our house, have very little money left (£350), and the standard household items... TV, games console, dishwasher, washing machine etc. There is no expensive jewellery or anything of any real value.


This is our monthly income/expenditure


Income £2263.56


Expenses
Rent £435
Council Tax £124
Contents Ins £20
Electric £75
Water £41.5
Food/House £600 (2 adults, large dog and a cat + occasional daughter)
Meals at work £80
Diesel £340
Car Ins £38
Car tax £20
MOT, servicing £40
Telephone(s) £80 (2 mobiles, line rental, broadband and landline)
TV license £12
Prescriptions £23
Pet Care £47 (dog has repeat meds + consulatations, worming etc)
Professional reg £30 (cannot work without this)
Other £30 (hair cuts, clothing shoes etc)


Total £2036


Are my expenditures reasonable? We have cut to the bone, but I refuse to eat value sausages! This has been very stressful for us both and thankfully my wife hasn't mentioned leaving me... yet.

TheGardener

Hi
Gosh - that's a hard knock, debt causes so much stress and can - if you let it - ruin relationships forever. Its clear that you and your brother have some issues that are going to take a long time to resolve. If none of the debts are in your brothers name, then there may be little you can do about it.

However, first things first you need to concentrate on dealing with getting yourself and your wife sorted - have you taken any professional advice? You do not need to pay for this - StepChange, National Debtline and Business Debtline are all there to help with expert advice and no charge.

Your SOA - there are some bits that will need work (the £680 food bill is going to need to be more than halved I suspect)
Try using the StepChange online debt remedy tool - it will give you a clearer ideas of what the OR is likely to feel is reasonable.

Deal with the brother issues when you have dealt with the debt - there is plenty of support on here f you need it

Flyright

How was the business registered...as a limited company, partnership or sole trader..?

AKOOLA

Thanks for your speedy responses. The business was a partnership and I am aware of 'joint and several liability' and the partnership act. I just don't have the money to chase him legally.

As for the food/household budget, its a typo. I have accounted for £500. That includes everything to feed two adults a large rottie and a cat. Then there's cleaning products, bathroom products and all the other little sundries we never think about until it's not in the cupboard. Food probably accounts for around £400 a month. We are now shopping at Aldi and looking for the bargains. However, I refuse to eat a rubbish diet because it's dirt cheap. I'm on gastric meds already following years of irregular eating patterns due to shift work. And, there is enough evidence to suggest, even in the UK, there is rife malnutrition due to low income.

Edit... I'm by no means a snob and I certainly am not sat at home eating Aberdeen Angus steaks and Caviar. It's plain old cooking for me. A balanced diet with plenty of nutritious greens.

fannyadams

couldn't read and run. How horrible for you to be saddled with it all.
would you like to look at this website as see if you are entitled to any benefits at all
http://www.turn2us.org.uk/benefits_search.aspx

then have a look on this website to see if any of these frugal recipes are going to help you

http://www.cheap-family-recipes.org.uk/

http://agirlcalledjack.com/tag/budget-recipes/

O hope that you can make some inroads into this, and I would second everyone elses recommendation of contacting
Stepchange,
http://www.stepchange.org/
National Debtline
http://www.nationaldebtline.co.uk/
and Business Debtline.
http://www.bdl.org.uk/

they are all amazing rescources full of non judgemental people who have been there and done that and most importatly know how to help.
I hope you get some relief...
HUGS
FA
x

themull1

my husband was in a similar position a few years ago, husband and his brother opened a bed shop, husband was guarantor for brothers loan, brother stopped paying, husband became bankrupt and lost his house, brother lost nowt, never spoken since.

If it was me under the circumstances, and i didnt own a house, i would go bankrupt, and make your brother pay. Does he own his house?

TheGardener

If you do go BR - and it does should like you might (but you are required to get professional advice - the judge may not accept your BR petition if you haven't) then the creditors will go for your brother and they may be better placed to 'negotiate' with him than you are. You may not be able to afford to chase him - but your creditors will. Is he aware of the consequences if you go BR?
Housekeeping on an SOA will be expected to include food + all the domestic stuff like cleaning products.
If you have a medical condition that requires a specialist diet, you can make that case to the OR but although a BR is not expected to be left destitute, and no-one is saying you are being a snob - most of us on here have been BR so we are speaking from experience - I suspect you will need to radically adjust your expectations about what you can spend. A good diet for 2 people is entirely possible on significantly less then your allocation.

Get advice first and read as much as you can on the stickies on this board about opening a basic bank account and saving for the BR fees

To pick up on another point - unless your wife is named as a creditor on your debts - they will not 'come after her'. It will depend on what your income is - your wife's income is not available to the OR as such, she will only be expected to pay a proportionate amount of the domestic expenses - it will only be you who is BR - not your wife

AKOOLA

themull1 wrote: »

my husband was in a similar position a few years ago, husband and his brother opened a bed shop, husband was guarantor for brothers loan, brother stopped paying, husband became bankrupt and lost his house, brother lost nowt, never spoken since.

If it was me under the circumstances, and i didnt own a house, i would go bankrupt, and make your brother pay. Does he own his house?

Yes, my brother does own his own house and he is about to be a beneficiary of a substantial will. I suspect that this was the reason he felt he didn't need to work (hard) for a living as he was soon to be financially better off. However, I have my own pride and would only consider bankruptcy as a last resort... not as a means to get back at my less than honest brother. I suppose there is some stigma still connected to bankruptcy, apart from the other implications.

As for my budget plan, with careful planning I'm sure it is possible to reduce my expenditure on household items to less than £500. I am already considering various ideas to reduce costs and somewhat enjoy the challenge of producing meals for the lowest cost possible. Come summertime there will be plenty of hedgerow foraging and making homebrew beer etc.

I have been very touched by the responses here and will be seeking advise from charity debt advisers. I have no objection to paying my way or contributing towards my burden of debt. This has been a very sorry state of affairs and despite my conscience I do possess more than a little grudge to paying the debts of others who run away from their responsibilities.

TheGardener

Hi - I know it must be really painful, I too was not entirely responsible for my debts but BR is a fresh start and although it is not the easy option, it is far easier than living with the stress of debts you can not pay.
If your brother really is aware that if you go BR - then your creditors will come after him for ALL the debts, then surely it is in his best interests to work with you! Depending on the level of the debt, he has everything to lose (house, inheritance) whereas you do not? Perhaps once you have had advice then you could talk to him and make sure he is clear about the consequences? By going BR you completely turn the tables on him...that may damage any future chance of a reconciliation...

alastairq

The state of the relationship between you & your brother pales into insignificance when compared to the debt situation you & your family find yourselves in.

You MUST put yourselves first & foremost.

BAnkruptcy isn't about 'getting revenge' for what has gone before...it is a debt solution.

It is a commitment [on your part...something your brother seems to be lacking?}....to your creditors.

Your brother seems to have had the right idea, when he left you in the lurch...he was looking after himself, and his.

Now it is time for you to do the same with yourself & yours?

And...if your actions eventually leave your brother in a similar situation to you at present, then he is welcome to come & post on this forum for advice & support?

Worry about building bridges when you are in a better place, eh?

ontrack

If I were in your position I would contact your brother and Clearly tell him that unless he pays his share immediately you will declare Bankruptcy and he will be liable for ALL the debt plus costs etc.
Then if he wont pay Just do it and forget about him. Its him that is not facing up to his responsibilities not you.
Unless your wife has signed as a guarantor or is a partner there is no way that the Creditors will be able to chase her.