My business is going Bankrupt

lilacgirl_2

Thanks Dalip , think we decided on abbey for the free business banking and because we thought we would just opt for the IVA route.

I just needed another account opening asap to transfer my dd's so my wage would still pay for them and isnt taken out for the loan repayment instead - the loan payments are taken from the business account and transferred to my persoanal account each month, my wage isnt enough to cover the loan payments with or without our utilities

maxmycardagain

phew, talk about complicated!

erm....

if your a legal partnership (and I thought that required a legal document for sole traders for HMRC tax purposes) it looks like the benefit will be only 1 set of fees.

going BR jointly will wipe all your outstanding loans/debts, your outstanding van HP can continue IF you want and IF you pay the monthlies

if you are confident that you can trade on (check that cashflow) then you can keep the van you own if you want that one, or the one on HP if its going to last you longer/better

what you do about the new round is your choice, lose it/dump it

maxmycardagain

Legal structures: the basics

Partnership

In a partnership, two or more people share the risks, costs and responsibilities of being in business. Each partner is self-employed and takes a share of the profits. Usually, each partner shares in the decision-making and is personally responsible for any debts that the business runs up.
Unlike a limited company, a partnership has no legal existence distinct from the partners themselves. If one of the partners resigns, dies or goes bankrupt, the partnership must be dissolved - although the business can still continue.
A partnership is a relatively simple and flexible way for two or more people to own and run a business together. However, partners do not enjoy any protection if the business fails.
Set-up

• Each partner needs to register as self-employed employed - see the page in this guide on self-employment.
• It's a good idea to draw up a written agreement between the partners. For further advice, consult an accountant or solicitor.

maxmycardagain

lilac, besides your paye job, are you registered as self-employed?

lilacgirl_2

Hi Max,

No I'm not I was I didnt have to as I didnt draw a wage and never worked for the business - when we first bought the round i was f/t but since our daughter i changed my hours

the accounts for year end 07 showed a loss of £22k because of the loans, our accountant is still working on last years so i cant even guess - its the loans that are sending us under as the business could be a good earner taking £225k pa but our overheads are just over £3500pm because of the new round (new round = extra loan at £490 pm, unit rent £400, petrol £400pm - round is 60 miles from where we live) the extra amount of £1290 pm is crucifing us especially as the new round is only taking £2k sales pw (£1150 profit pm). Without the new round we were paying out in overheads just under £2300 pm but were surviving.

we might just walk away from the new round as our established round is suffering (some customers being missed and not delivered to) do you think this would be justifiable to the courts/bank as we only had the new loan amount of £25k in april - we did a business plan and the bank checked the figures so doesnt that pass some of the blame? :rolleyes: maybe not....

i suppose its just the stigma attached to BR its making us feel incapable of handling our finances ever again!

this site and people who have replied to me have helped reassure us that the mess we're in could be sorted given time, it just helps knowing what steps to take and what lies ahead for our extending family:o

lilacgirl_2

Max, i forgot to ask...

could we still keep the van on hp even though none of our other creditors will be paid?

we could carry on trading fine but without the loans - the van would keep the business afloat as we are van sales, the van repayments each month are £162 per month and we have 30 months left to pay

can you pick and choose who you default with?

maxmycardagain

lilacgirl wrote: »

Max, i forgot to ask...

could we still keep the van on hp even though none of our other creditors will be paid?

yes, the HP companies are only interested in getting paid, the OR wont want it as its a tool of the trade

we could carry on trading fine but without the loans - the van would keep the business afloat as we are van sales, the van repayments each month are £162 per month and we have 30 months left to pay

can you pick and choose who you default with?

no, but why would you want to? thats the point of going BR, just dont upset the suppliers!

BTW, if you were not registered as self employed you werent a partnership as far as HMRC are concerned

lilacgirl_2

if we go BR will all of our bank accounts get frozen? :eek:

we pay some of our suppliers by BACS and this could get tricky to keep them on side with good prices

we have a car on HP with only £2k left to pay, will they take this too even if we chose to still pay them or because its for personal use would they take it from us because of our debt?

dalip

lilacgirl wrote: »

Thanks Dalip , think we decided on abbey for the free business banking and because we thought we would just opt for the IVA route.

I just needed another account opening asap to transfer my dd's so my wage would still pay for them and isnt taken out for the loan repayment instead - the loan payments are taken from the business account and transferred to my persoanal account each month, my wage isnt enough to cover the loan payments with or without our utilities

It needs to be a basic acount if you go bc and then you have a chance on the day of bc to explain to the OR why you need it. Remember(not too many ee's i hope:o )it is the banks that freeze accounts not the OR.D

maxmycardagain

do u have credit off suppliers? u can get a barclays or coop account probably and transfer the ddms without fuss, no need for suppliers to ever know, but new suppliers may credit check you, or you will have to deal in cash

its not impossible that you could time BR the day after all your DDM's go out giving you a month to open a new post-BR basic account

as for your own car, it depends on convincing the OR that you need it for work