I'd love some advice please ;-)

GeordieChameleon

I've a very small and struggling business. Currently operating on a sole trader basis.
Overthe last 3/4 years I'v accumulated around £30,000 debt. This is from loans/overdrafs and credit cards.

I'm separated from my wife, and have been for about 2 years. We are still friends so when I spoke to her about my debt problems she agreed I could sell the home we jointly own and pay off the debt I could. She would accept just a small amount as and when I could manage it.

The sale is expected to go through within the next week. However yesterday recieved a demand from a building materials supplier for payment of an account to the tune of £5000. This is from a previous employment I left some 18 months ago and I had given directors guarantees on. I was unde the impression that this account had been settled by the remaining directors..........but obviously not.

This demand gives me 7 days to pay in full or they will make me bankrupt. Now I cant pay that in addition to the other amounts I was going to pay so Im almost resigned to the fact that I'll be made bankrupt.

But as I am going to be made bankrupt anyway I was wondering whether or not I should pay my ex her true entitlement of half of the equity before it hppens, and just accept that I cant pay all of the other creditors. Would this look (wrongly) as if I was trying to filter some cash away from my assets.

I just think if I'm in the mire anyway I dont want her to have to pay for it.

Also just how closely do the receivers look at business accounts. Do they cross reference with the revenue,, or do they just look at bank statements etc............and yes in this case I may have not been fully open with HMRC, but I probably should be with the receiver.

I'd appreciate any thoughts/advice

Thanks

G-G_4

Can you not deny you ever received the letter about the 5k ?

Then once your house has gone through and wife has been paid the OR will just include it in your debts?

I'm not 100% sure about what happens in this situation, i'm sure someone will be along soon to help you.

Good Luck

debt_doctor

I assume you have received a statutory demand. Most of these are a bluff and hardly ever go through to bankruptcy, but could do. Go and get advice from a debt charity asap, BR will have complications for you.

Best

DD

GeordieChameleon

The letter was not sent recorded delivery, so I supose I have an element of deniability. Especially as it refers to previous correspondence which was definately not received........if it was ever sent.

It calls itself a letter before action. In which it states a "statutory demand for payment" will be issued.

I dont want to go bankrupt IF its avoidable, hence the sale of my home (at a knockdown price to get a quick sale) but IF I'm likely to be forced down that route anyway I dont want to pay of all the other debts with what is in effect my ex's money.

I know there are repercussions for trading, but I'm less worried about that as I'm not exactly making a fortune.....in fact havent had any wages for 3 months. So closing that down, and looking to start again aren't a major issue. It's the ex's money and what the OR investigates that are the worry.

debt_doctor

Its a meaningless piece of paper ! Sounds like a typical debt collection letter and is NOT a statutory demand

DD

GeordieChameleon

Thanks Doc, So my initial course of action should be to continue the sale, to put me in a position to clear up what I can..........but be prepared for a change of tac if a statutory demand follows.

debt_doctor

I think you need some tailor made advice from a debt charity, for instance;

If you are selling at a knock down price then if you do end up being declared BR then that could be seen as a transaction at undervalue. Also if you sell and your partner gets little from the sale then apart from being unfair to her if you do not have the money to pay all your debts then howare you going to choose who to pay ? This is called prefferential crediting.

The OR has the power to undo those transactions and revert the situation to how it was, plus they are both BR offences.

How about if you sold your house at a reasonable price and your ex was given half the profit, you declare BR and your share goest o the OR. No offences there, and your ex gets treat fairly. Who knows, if you still get on together she might decide to 'treat' you once you are discharged !

Best

DD

debt_doctor

.....or you might want to avoid BR and offer your half as full and final settlement, treating all your creditors the same or enter in to a one off lump sum IVA .........

Do you see why you need advice ?

DD

GeordieChameleon

Cheers Doc, I think you're right. I'll give the CCCS a call tomorrow