Questions you have before making a decision to go Bankrupt and the Bankruptcy process

Moderators: TalbotWoods, JaneClack

By kneedelp
#219206 hello again,hope you can help me.myself and my husband are hoping to both go bankrupt early in january.we stopped paying our credit cards approx 2 months ago.my husband is a sole trader and we have continued to pay our mortgage,our utility bills and my husbands main supplier ,either through direct debits or in cash at the month end for goods received.i have paid 1 pound each to all our credit cards as i did not want the or to feel that we have favoured one creditor over another.my problem now is that im worried to death that because we have continued to pay our supplier the or might view this in a bad light.problem is that if we dont pay supplier we cant continue to trade and therefore we will have no income apart from other things like child benefit and working tax etc.please can you try to put my mind at rest as its sending me nuts.we are doing our best to get accounts in order etc in order to file for br anytime soon.what do we do please?
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By Ransid
#219207 The OR is likely to look at the trading position seperately to any personal borrowings etc

As long as the sole trading is still viable (ie it is making profits not just generating turnover) then I can't see this is an issue.

If the business is loss making - why continue?

Don't be fooled into looking at turnover as income - the OR won't

Hope that helps
By kneedelp
#219208 thankyou ransid for your speedy reply.my husbands old business was the one that was not making enough profit,so he changed direction slightly and is now doing better,but alas not in time for us to avoid bankruptcy.will we get into trouble do u think for continuing to pay our supplier when we are not able to meet our credit card committments?thankyou once again.
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By Ransid
#219226 It shouldn't as I said As long as the sole trading is still viable (ie it is making profits not just generating turnover) then I can't see this is an issue.

One can never really tell what will irk the ORs examiner but if paying the supplier is keeping the income coming in and not making the position worse I can't see it being a problem.

They will look at it seperately, and generally their concerns will be payments made "other than in the ordinary course of business"

I don't know what your husband does but if it's a labour only sort of self employment, and he's just buying in goods from his "supplier" as he needs them, it should be ok to continue to trade but using credit might be a problem in future, if however it's something like a shop then it's unlikely the OR wont take action to stop it, not least to look at selling any stock etc and deal with the tenancy (if any) etc

Hope that helps