Capquest Bankruptcy Order

VoyagerC

I spent the last 3 yrs caring for my old mum as well as working full time self employed. I also ran most of my husband's business, of which I am also a partner. We do not share a bank account & are pretty separate in every way. Last year was so bad that I hardly had time to sleep & I put all mail to one side and I stupidly missed CCJ issued on behalf of Capquest/Bank of Scotland unpaid card debt (mostly interest). After a traumatic few months mum died in Nov 2014 & about the time of the funeral Dec 3 I was handed a scruffy note which was a Bankruptcy Order hearing to be held in early Jan. I didn't know if I was supposed to attend but I intended to, got stuck in traffic & gave up. I now have Official Receiver interview on Weds. As it happens I can now pay the debt but it looks as though I still lose my bank account, cards etc. I have been pounded by solicitors touting for business saying they can help at a cost of £1500. Do I have to have a solicitor? Can I continue to work? Is there anything I can do to save my bank account? Grateful for advice

TheGardener

Hi
Please ring business debtline first thing in the morning - They are experts and the are FREE - you do not need a solicitor at this stage but you do need to act very quickly. There is a great deal you need to become familiar with and reading the Weclome post at the top of this board is the starting point. If you haven't already got a basic bank account get that sorted - The only High Street bank account you can open now is basic account with Barclays, they will open a basic account even if they were a creditor but you will need to go into a branch and explain the circumstances.
Read everything you can on the Welcome posting and come back and ask any questions.

National_Debtline

Hi VoyagerC

Welcome to MSE.

I am sorry for your loss and would like to try and offer you some guidance about where you stand at the moment. First of all, TheGardener is correct, that you should start with some free advice to get more tailored information for your circumstances. I would like to offer you some general information based on what you have described.

If you were unable to attend the bankruptcy hearing then the court cannot hear your side of things and a bankruptcy order is normally granted in that situation. This seems to be what has happened to you because you are now being contacted by an Official Receiver. Their job is to do several things, first of all, to process the bankruptcy application (so it is very important to cooperate with them) but also to seize any assets that you have for the bankruptcy. Unfortunately, this can include any property you are named on, cars (typically worth more than £1000), savings/ cash, inheritance etc.

When you are declared bankrupt then any debt that was accrued before the bankruptcy will be included (and subsequently written off). I appreciate that this debt was about £1500 but it may cost you a lot more than that to try and reverse a bankruptcy (it is known as trying to annul a bankruptcy). It would cost you the total balance of any debt that was included in the bankruptcy, plus the Official Receiver costs (and sometimes a Trustee as well), plus you will need specialist legal advice to attempt to do this. Unfortunately, reversing a bankruptcy is very difficult and expensive.

VoyagerC wrote: »

as well as working full time self employed. I also ran most of my husband's business, of which I am also a partner.

When you are declared bankrupt you will normally be in this state for 12months. There are several restrictions placed on you and one of those is that you cannot be the Director of a Limited Company. If you are a sole trader then you can continue trading, there is no rule in bankruptcy that would prevent this happening, but it can be difficult if you require credit relationships with suppliers. Partnerships can trade if they are subject to a bankruptcy order but this can be more complicated as the original partnership would be dissolved and they would need permission of the Official Receiver. This is something that you can discuss with Business Debtline in more detail.

TheGardener wrote:

The only High Street bank account you can open now is basic account with Barclays, they will open a basic account even if they were a creditor

I would agree with this comment, that Barclays is the only bank that has said officially they will allow someone to open a basic account with them if they are in a bankrupt state. You can make enquiries at other High Street banks at your leisure as they may do this at their discretion. But when you are declared bankrupt, your main bank account, at that time, will be frozen. The Official Receive will decide how long this is for.

We have a factsheet about bankruptcy that you will likely benefit from reading - https://www.nationaldebtline.org/EW/factsheets/Pages/01 EW Bankruptcy/Default.aspx

Laura
@natdebtline

fatbelly

Just to mention that the threshold for a statutory demand is being raised to £5000in October, so this sort of situation won't happen, at least not on a £1500 debt.

https://forums.moneysavingexpert.com/discussion/5153745

The evidence for the requirement for a change came from a variety of sources, including two district judges who felt it was disproportionate to be forced into bankruptcy on such a small sum.

Too late for VoyagerC, but if anyone else gets a stat demand on a debt less than 5k, attend the hearing and argue that it's disproportionate

Flyright

It is not true to say that you can continue trading as before if you are made bankrupt whilst in a partnership. The effect of a bankruptcy order against a partner dissolves the partnership, so you cannot simply continue trading as before.

National_Debtline

Hello again,

National_Debtline wrote: »

If you are a sole trader or in a partnership then you can continue trading, there is no rule in bankruptcy that would prevent this happening, but it can be difficult if you require credit relationships with suppliers.

I would like to apologise for any confusion caused by this post. Flyright is correct that a bankruptcy order would dissolve a partnership. To clarify, there is no rule that prevents a partnership in bankruptcy. So if the original partnership had been dissolved and the individual was able to obtain the Official Receivers’ permission, then it may be possible to set up a new partnership. Please be aware that there are rules as to what trading name the new partnership can use, this would need to be confirmed with the Official Receiver. It is also important to note that the debts and assets from the original partnership would be included within the bankruptcy, so setting up a new partnership may not be that straight forward. For more information, you can contact Business Debtline.

Laura
@natdebtline