Can I keep my Small Business during Bankruptcy

Dannnasus

Hi hope someone can help as I am getting conflicting answers when googling about this. I have over £30000 debts mostly credit cards and am considering bankruptcy. However I am self employed and do not want to involve my small business. As it is my means of income will I be able to keep it going while I am bankrupt? The business is failing fast as all my spare money has been going to the credit card companies so I cant afford to buy regular new stock. If I could use the money I was paying them to buy stock instead then my business should survive. I have no assets whatsoever. The debts were from a failed marriage and were in my name so I was left to pay them.

standalone

My understanding is if you go bankrupt you have no choice but to involve your small business.
That said you can go bankrupt and still continue to trade and earn a living from your business. The day after you go bankrupt your business will be in effect be starting anew.
Your case worker in the office of the official receiver will want to know during your interview if you are earning enough through your business to have a surplus of cash after paying all your living expenses in order to make payments on an IPA.
As you are self employed the OR may want to keep track of your sales, purchases and profit on a 2 or 3 monthly basis in order to see if you should be paying an IPA.
I am sure others on here will advise you better than I can but it is not possible to avoid involving any business small or otherwise.

KeepOnKnitting

I am self employed on a sole trader basis, and I was not stopped from trading. I do not use any lines of credit or employ anyone, so I was just allowed to carry on as normal. You might want to speak to business debtline, I found them to be brilliant in giving me peace of mind before I went BR,

tigerfeet2006

I second Business Debtline. Please ring them ASAP.

Dannnasus

Great thanks for your help. I will give them a ring once I decide if bankruptcy is definitely the way to go.

Annisele

Dannnasus wrote: »

Great thanks for your help. I will give them a ring once I decide if bankruptcy is definitely the way to go.

You should probably call them before that - the information they give you should helpl you decide whether bankruptcy is the way to go.

skintandfat

Remember the OR can force you to sell any business assets (such as a van) if you go BR.
If your van is worth less than £1000 and you need it to work (so you can do an IPA) then you may keep it.


The business is more important than your credit cards, but remember if you go BR you will be able to continue as a sole trader, not a company director- and you will have to inform all your business creditors that you were BR.


I did and all my wholesalers didn't bat an eyelid- I have always paid my wholesaler bills on or before time


On another note- if you don't have any supplier bills (as a debt) on your SOA then they will not be informed by the OR

tigerfeet2006

Annisele wrote: »

You should probably call them before that - the information they give you should helpl you decide whether bankruptcy is the way to go.

Dannnasus wrote: »

Great thanks for your help. I will give them a ring once I decide if bankruptcy is definitely the way to go.

Please ring them now.They will help you through it all. Don't wait.

silvercar

....The business is failing fast as all my spare money has been going to the credit card companies so I cant afford to buy regular new stock.....

You need to prioritise. The credit card companies should be at the bottom of your list of bills to pay.

tigerfeet2006

This is the details for Business Debtline.

https://www.businessdebtline.org/

Ring them NOW do not delay.

debt_doctor

Hi,
to touch on what others have said, Business Debtline is very good for support in strictly business matters.
As Silvercar mentioned, don't overlook the basic priorities fact that the reason your business is failing is because you are repaying large amounts of money to credit cards that prevent re stocking your business - if this is so, then reduce or stop paying your credit cards and let the business pick up.
Always remember a couple of things; Any stock will be sold in bankruptcy, and if perishable will be destroyed. It is also possible that the OR will decide that your business has a resale value and will want to realise such monies either from a third party you introduce or by potential sale.
DD