I desperately need some help/advice...

P592431

Hi everyone,

I desperately need help to decide how to proceed with my self-made debt crisis! Can anyone please help advise me?

I formed a LTD company in 2021 to pursue a business idea (only me employed/involved) and having foolishly gambled on marketing spend have run up a (100%) personally guaranteed overdraft and short-term business loan debt of £45k!

To try and save the business I also lent the company £40k of borrowed money via two personal loans/credit cards. The business has run out of cash and has no assets to sell. 

The business has no trade creditors as I’ve always paid up front for everything. It owes HMRC £3.5k, Bank £45k and myself now zero having taken monthly repayments back from my director’s loan account to cover living costs.

The business has finally failed and has run out of cash. I can’t afford to appoint a liquidator (£2k-£4k quoted).

My wife and I live in a rented house. We’re both in our early 60’s. My wife works self-employed from home due to illness and is on a small income. However, she is due to inherit £200k in the next year and is intending to buy a property to become rent free. Understandingly she isn’t willing to bail me out and thinks I should go bankrupt.

I’m now looking for a job and should be able to earn £10-£15 per hour. I don’t have the skills or profession to earn much more at this stage without training.

Therefore, I don’t think I’m going to have any available income after living costs to satisfy my creditors via a DMP or IVA.

Should I declare myself bankrupt? Should I first try to negociate a DMP or IVA? Should I wait for my creditors to take legal action?

At what point will the business bank debts be pursued via my personal guarantees? Can this future liability be included as part of the bankruptcy? 

Will my wife be implicated in any way by my bankruptcy? We don’t have any joint loans or other liabilities. If I died, would she be burdened by the debt in any way?

I have a 7 year old/modest car (value under £5k) and apart from basic belongings and household effects, I have no other assets other that my iphone.

I don’t have the funds to approach an Insolvency Practitioner but is this a false saving in the long-term? Or should I just fill in the forms, pay the £680 and do it myself?

What should I do? I’d really appreciate some pragmatic advice. 

Thanks,

Peter

Grumpelstiltskin

Have you spoken to Business Debt Line?

Business debt advice | Free debt help | Business Debtline | Business Debtline

They should be your first port of call.

P592431

No, not yet but will call them today. Thanks 

ToxtethO'Grady

BDL would be my advice as well.

Something you should be aware of is that your personal guarantees need to have become due to be included in your bankruptcy. If they have not asked you to make payment by 'activating' the guarantees they are classed as contigent debts and so not included in bankruptcy.

ManyWays

ToxtethO'Grady said:

Something you should be aware of is that your personal guarantees need to have become due to be included in your bankruptcy. If they have not asked you to make payment by 'activating' the guarantees they are classed as contigent debts and so not included in bankruptcy.

Contingent debts are included in bankruptcy see 43.7 Bankruptcy debts in https://www.gov.uk/guidance/technical-guidance-for-official-receivers/43-creditors-and-liabilities