Advice needed - considering Bankruptcy

Polly_Rocket · 24 June 2019 at 1:38AM

Hello guys!

I have spent the last couple of days reading over this forum and have plucked up the courage to ask a few questions after seeing the help others have received.

I am seriously considering bankruptcy. I do have an appointment with the CAB on Friday but like to be armed with as much knowledge as possible. I have unsecured debts of over 50k.

I am currently self employed in a partnership with my husband. We run an online retail business which deals with the sale of livestock. The business has no debts as I funded it with personal credit as we were unable to gain business finance. They are my debts only - no joint debts. We live in rented accommodation and we have 1 car valued at £600.

I would just like your thoughts on the below queries please -

1. If i do decide to go bankrupt, I understand I can still continue to trade as a sole trader, but my concern is for the stock that we hold. Would it be wiser if i ceased being self employed and I severed the partnership to prevent the OR taking that sort of interest in the business as it would solely just be my husbands? I would be classed as unemployed/ stay at home mum receiving child tax and child benefit? If this is a wise move how soon from ceasing my self employment could I look at applying to become bankrupt?

2. If I was classed as unemployed, but my husband still being self employed, would an IPA still be considered if there is disposable income due to the household receiving a wage as opposed to just solely relying on my benefits?

3. Bank accounts. I have a joint current account with my husband in good standing. All my benefits go into this account, and our wage as well as all my direct debits. Would it be a good idea to open a basic bank account in my name to have my benefits paid into this and my utility DD's go out of this one for minimal disruption before applying for bankruptcy?

4. Should I get my name removed off the joint account to disassociate myself from our only financial tie. Or should my husbands name be removed as this is the account that all the creditors direct debits go out of?
His credit rating has improved drastically recently and I wouldn't want to further hinder that progress.

Any advice is much welcome. We have tried our very best to cope with all these outgoings and until this day I have never missed any payments, with the help of my wonderful parents, but they can only do so much and it is time for me to face reality. The debts for me started 5 years ago when my then partner was physically abusive and I left the family home with my two little boys with nothing but a couch. I had to start all over, house, car, furniture the lot. My mental health wasn't great at the time so I didn't have the will to fight him, I was just relieved to have got out of the situation. Again I am looking forward to getting life back on track

Thanks for reading
Polly

Minkym00 · 24 June 2019 at 1:16PM

The OR is always going to be suspicious of changes made to personal circumstances right before a bankruptcy order. They will look for misconduct in the 2 years prior to the order and if they think you have given assets to your husband or transferred your interest in them in order to keep them out of the reach of creditors then you could be investigated for a bankruptcy offence.

What sort of stock is it and how much is it worth? Did you pay for it all from your personal credit?

You wouldn’t not be considered for an IPA if your income is from benefits only, no matter what your husband earns.
It’s a good idea to take your name off the joint account and open a new bank account as your joint account will be frozen. If it has any kind of credit facility then bank won’t unfreeze it - they don’t allow bankrupts access to credit.

JCS1 · 24 June 2019 at 1:55PM

A partnership is usually dissolved when one or more of the partners go bankrupt, and the partner(s) who are not bankrupt have to account to the OR for the bankrupt partners assets.

Might be worth a call to Business Debtline as well as CAB

Polly_Rocket · 24 June 2019 at 4:59PM

Thank you :-)

Under no circumstances would I ever want to commit any kind of offence, I just know there are legal loopholes people can use hence me putting my feelers out .

The stock is marine coral and invertebrates, which obviously have to be kept in tanks under special conditions so not just stock sat on a shelf. Only a small percentage of the debt was used to purchase stock. Must be worth about £1500 - £2000 in bulk in total.

The business is split 70/30 with the majority being the other halfs as he puts in the longer hours. Would the OR have to take into consideration that he owns 70% of the stock and just look at my 30%? It would possibly be in their best interests to allow us to find someone to purchase the stock back on our behalf maybe?

Will speak to the other advice line also.

Many thanks

Minkym00 · 24 June 2019 at 6:32PM

Yes the OR will only look at claiming any asset you have a beneficial interest in, providing you can prove your 30% ownership. The OR will want a third party to buy out your interest as this stock is not something their agents can handle. This is massively in your favour as they are far more likely to accept a lower than market value offer.

It doesn’t matter if it makes up any of your debt but it does means they can potentially prove what you paid for it.

So get your husband or another third party to go in low and see what they’ll accept. (You can always buy it back off them if there are enough funds in the business).

Advice needed - considering Bankruptcy

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