Bankruptcy and my sole trader business

Boobydoo

I've today made the decision that I have no choice but to go bankrupt. There is one major thing that now concerns me. I am a sole trader and my business is fairly new. I've been told that I may have to close my business, as I am not yet drawing a wage and find an employed job. I don't mind getting another job, but I have two very young children and am a single parent therefore I think it may be very difficult to find something.

Is this true? Will I have to close my business?

Also, I have checked my house tenancy agreement and nothing in their about bankruptcy etc, but does my Landlord get told I'm bankrupt directly? I guess it's just I would feel embarrassed by it and they may want to get rid of me.

KeepOnKnitting

I called business debtline to get advice about my self-employed status.

There was no problem with me continuing to trade, but I was actually drawing an income from my business and stopping trading would have meant losing income. I don't think the OR can force you to get an employed job, but you may have to think about how well you can financially support yourself without being able to borrow money or draw an income from your business.

HappyMJ

Boobydoo wrote: »

I've today made the decision that I have no choice but to go bankrupt. There is one major thing that now concerns me. I am a sole trader and my business is fairly new. I've been told that I may have to close my business, as I am not yet drawing a wage and find an employed job. I don't mind getting another job, but I have two very young children and am a single parent therefore I think it may be very difficult to find something.

Is this true? Will I have to close my business?

Also, I have checked my house tenancy agreement and nothing in their about bankruptcy etc, but does my Landlord get told I'm bankrupt directly? I guess it's just I would feel embarrassed by it and they may want to get rid of me.

If your business is structured as a limited company with you as the director then you will have to resign as director. You can sell the shares you have in the company to someone else and they could take over as director. You can still be an employee of the company but you'll have to let someone else manage you.

If you're not a LTD company then you can continue to trade as a sole trader. You will need to notify any suppliers that you deal with you are bankrupt. They will still sell to you but they'll require you to pay cash upfront rather than give you goods or services on credit.

luvchocolate

Hi I was up to date with my rent and the O.R told me he would not be notifying my landlord. He did want to see the rental agreement
3 years on now no problem.

dancingfairy

You need to speak to stepchsnge or national debtline and get further advice as you will need to satisfy the judge you have taken advice re bankrupty and understand the consequences. (I'm not saying they are that bad, just that you need to understand what's what).
Df

elljay

luvchocolate wrote: »

Hi I was up to date with my rent and the O.R told me he would not be notifying my landlord. He did want to see the rental agreement
3 years on now no problem.

Yes this is exactly what happened to me, I was worried sick about telling the landlord. The OR was quite clear that she would not need to disclose my bankruptcy.

Do phone Business Debtline - 0800 197 6026. They will go through all your concerns with you and help you to find the best course of action. (It's free) They were brilliant with me and can help with non-business related stuff too, though in my case both personal and business affairs were all mixed up. If you do go bankrupt eventually the judge will ask what sources of help you've used.

EJ

National_Debtline

Hi Boobydoo


Very good advice and first-hand experiences from the above posters. They're right in stating that bankruptcy won't in itself force you to give up acting as a sole trader. The Official Receiver cannot dictate how you choose to earn a living - just what portion of those earnings they claim.


I just wanted to add that Business Debtline are now offering advice by web chat as well as their traditional helpline service (during the same opening hours). Just visit www.businessdebtline.org


Good luck


Dennis
@natdebtline

Strachan

My bankruptcy was also not disclosed to my landlord. Good luck

skintandfat

As far as wholesalers went, here's my story


I use several regular local wholesalers, always pay my business bills before they are due and went bankrupt due to personal debts.


Spoke to my main wholesaler and told him of my BR; answer
The reply was - my mum went BR, we know you so it's not a problem


One other wholesaler said (when I told them I wouldn't apply for an account as I was BR) - apply and I will make sure you get an account.


It's not all doom and gloom

Boobydoo

Thank you all so much for such great help and advice