Some Advice please?

ccwweeuuw

Hello, Im wondering is maybe someone has been through what im currently going through or if someone could advise?
In Feb 2020 the company i have been sole director of for 9 years ceased trading. I Ran a company that imported and sold a large range of own brand housewares and products.
I used alternative funding to build the company to a decent level and the company was doing well.
However towards the end of last year we started to see issues with our asian suppliers as well as having a family issue things escalated and the decision was made to close the business, covid-19 seemed to be the issue with our asian suppliers shutting shop for a period of time meaning we were unable to re supply and with monthly payments mounting the company became insolvent very quickly.

I now have the issue where i am personally liable for the business debt, around 230k i have throughout the process made contact with the lenders some have been surprisingly quiet, others not so much. 
Its come to a point now where the largest of the lenders i owe money to are wanting to place a charge on my house, which i have next to 0 equity in, i live with my partner but we are not married.

I have offered large lump sum payments of up to 50% to end the debt, however the lender wont accept this (understandably i guess)
Im currently in the process of looking at ways to set up again, however i feel that my only real option here is to declare bankruptcy, i have little in the way of assets, and almost 0 in equity in my house, my partner has a decent amount of savings that she could buy my equity share of the property i assume this will be around 11k. 
I understand by declaring bankruptcy i will be unable start a new business any time soon.

Is there actually any other option available to me where im not going to end up with a charge on my house as this would effect my partners equity stake and im not happy about bringing her down with me  

Id also like to say that up until feb 2020 the month i liquidated the company payments to all lenders had been met with 0 issues for years, and the business model is extremely viable, i have tried to speak to the largest lender and explain that given the chance the first thing i would like to do it begin making payments again, however they seem reluctant to assist in any way.

Thanks in advance

luvchocolate

I would suggest you contact Business Debtline they have a good reputation on this board. 
I'm sure other posters will be along shortly also. 
It's something I have no experience of 

ccwweeuuw

Thankyou, Having spoken to them they have left a few things up in the air.
My property has very little equity in it, the business debtline has said my partner "may be able to buy my stake in the property" 
However i cant understand why only May, surely if she has the capital to do so she would be able to buy the stake, or is there a reason why the OR would not allow this?

Minkym00

ccwweeuuw said:

Thankyou, Having spoken to them they have left a few things up in the air.
My property has very little equity in it, the business debtline has said my partner "may be able to buy my stake in the property" 
However i cant understand why only May, surely if she has the capital to do so she would be able to buy the stake, or is there a reason why the OR would not allow this?

The reason it’s not definite is because OR has three years to deal with the property and may think it prudent to wait longer and see if the equity position improves. If it does increase in value in the next 3 years then your partner would have to offer a higher sum in order to buy out your stake. 

How were you intending to offer sums of money to your creditors if you have no assets?

Mary444

You said they are "wanting" to place a charge on your house.  
I would suggest you sell it after getting several valuations (ask them to price it for a quick sale), you can either sell it to your partner or have a fresh start in a new property that she owns.
Get your post from old house redirected to an office address to reduce stress and make your decision from there.
With no assets you can ask them to make you bankrupt, do not offer anything.  When they have felt the feeling of getting nothing they will be more reasonable.
My brother had a business he put into administration and was left with about 100k of personally guaranteed debt, he got them to accept 10% of 100k, He jointly owned the property but she played hard ball and bought him out for a song.

Minkym00

Mary444 said:

You said they are "wanting" to place a charge on your house.  
I would suggest you sell it after getting several valuations (ask them to price it for a quick sale), you can either sell it to your partner or have a fresh start in a new property that she owns.
Get your post from old house redirected to an office address to reduce stress and make your decision from there.
With no assets you can ask them to make you bankrupt, do not offer anything.  When they have felt the feeling of getting nothing they will be more reasonable.
My brother had a business he put into administration and was left with about 100k of personally guaranteed debt, he got them to accept 10% of 100k, He jointly owned the property but she played hard ball and bought him out for a song.

Be VERY careful here!!! The OP is already insolvent as they know right now they owe £230k. By selling their share of the share the property, with knowledge of insolvency, they would be putting an asset out of the reach of creditors unless they gave the monies from the sale to their creditors on a pro-rata basis. Equally “pricing for a quick sale” could open them up to an allegation of selling at undervalue. Both of these actions are a misconduct that are very likely to attract a BRO/BRU and mean the OP could be prevented from acting a director for up to 15 years.  

Mary444 do you actually know anything about insolvency legislation??

ccwweeuuw

I understand i cant transfer the equity share to my partner.

However upon checking on the internet she should be able to purchase this from the receiver, she has a large amount of savings, however unfortunately not enough to cover the 230k debt. However she should be able to buy the share from the receiver, the only thing im concerned about is when i spoke to an advisor they mentioned that she may not get the opportunity, is this correct?
Surely if she has the capital to do so then thats ok?


Im also concerned as the biggest business lender im guaranteed to has given me until tomorrow to accept the voluntary charge, however when seeking advice it would seem they are not following correct protocol, as i have offered large lump sum payments and an offer of a staged pay back plan, (my Partner is willing to cover this for the time being) yet they will only accept with a charge up my property, the issue with this it would effect both myself and partner. It also concerns me that once they have the charge they would call in the charge and force sale anyways. 

Would it be wise to seek legal advice as i seem to be offering everything i should to resolve the issue, yet they seem to want only one thing. 
The mad thing about it all is they would be left with a lot less by making me go bankrupt as the house has 0 equity and i have next to no assets as i had pushed everything i had into the business and the only real reason for the failure of the company was a family argument mixed with covid 19  

RattyIrk

If you have a PG for the business debt that does not mean the creditor is automatically entitled to a charge over your property.  What they are trying to do, pointing out the obvious, is to give themselves security outside of the business and PG itself so if the worst happens they can try and get something.
If you can offer part payment of this and other debts you need professional insolvency advice which may then lead onto needing legal advice.  This is not cheap but I can't help thinking if you have some assets you can throw at it then you may be able to find a way forward that does not lead to insolvency.
When my company went under, with associated personal liabilities, there was nothing meaningful left so out of options.  I'm not convinced from what you say you are quite there.   

ccwweeuuw

Hey Rattyirk

I personally have very little assets.
My partner has some substantial savings she can assist me to offer a payment plan to the debts, however Funding Circle The biggest of the debts appears to only be interested in obtaining a charge on my property. Which is strange as there is very little equity in the property and due to the current financial crises i assume there will be not much in 3 years either.

I will make contact with a solicitor regarding the matter and obtain advice, However what concerns me is that i may delay the process and allow the lender to take me to court and get a charge placed on my house. Im unsure how this process works and how long it could take them. 
I dont want this to happen as the debt it mine and not my partners. As said i have offered a substantial payment to clear the debt which was rejected and also payment plans to clear the debt in full over time, I have read the Ts&cs on the FC website and it appears they will accept a plan if the monthly payments are higher without a charge so i have asked them wha they would accept and will look at our costing to see if i can offer more monthly than i did.

I dont really want to go the bankrupt route as it will delay me being able to set up trade again, (the business is viable) the issues came due to personal matters more than anything. (please note that all company assets were sold in the liquidation process so there is nothing to offer FC there to bring the debt down)

My head is telling me that going bankrupt may be the most viable option, as i dont seem to be getting anywhere with an agreement, however ideally i want to set up a payment option with the lenders in the hope i could then pay off the debts owed.  

I read online that people have managed to bring the debt down to 1-30% of the value in the past. However i have no idea how this was achieved. I have read about IVA online however this seems no better than bankruptcy. The advise i have so far been given from the Business debt line seems pretty week. 

Cheers in advance 

RattyIrk

Them getting a charge over your house is not a quick thing.  You would have months.  They have to comply with protocols etc.  Their best bet tactically would likely be a statutory demand but risk with that is it could force you into bankruptcy and once that happens they then have to deal with the OR.

For them best thing would be for you to agree a charge over the house so that if you went bankrupt they would at least have that as a first ranking security.  

So the worst they could do is make you bankrupt which you may have to do anyway from what you say.  They do not have as much power as they make out.  In my view I would be inclined to go back to them and offer them the alternative of you giving them 'x' or inviting them to bankrupt you which would result in them receiving far less.

One of the nicer things about bankruptcy is companies and individuals which had power of you have that largely pulled out from under them.  

MinuteNoodles

ccwweeuuw said:

I understand i cant transfer the equity share to my partner.

However upon checking on the internet she should be able to purchase this from the receiver, she has a large amount of savings, however unfortunately not enough to cover the 230k debt. However she should be able to buy the share from the receiver, the only thing im concerned about is when i spoke to an advisor they mentioned that she may not get the opportunity, is this correct?
Surely if she has the capital to do so then thats ok?

No it's not correct. A co-owner will always get the opportunity because the ORs duty is to maximise the money they can get for the creditors and a partner or spouse buying out the bankrupt's interest in a home guarantees them the most money as it'll be free of any sales commission, free of any legal fees (she'll have to pay the OR legal fees typically in the order of a few hundred pounds) and it'll be at market rate not what the property fetches at auction. The only thing as previously mentioned is the timing of it depending if the OR decides it may rise significantly in value.