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

Moderators: TalbotWoods, JaneClack

By snoopy
#4217 Hi,

I found this site about a month ago and found it of great use, simply knowing there are so many others who have the same problems and worries with debt.

When I made a posting a month ago, I was still commited to developing my business and believed I could straighten myself out through that. Not the case at all. Last week I nearly had a breakdown from the worry and pressure of the business and have found myself in a situation where I can no longer cope. With the business debt combined with my personal (I'm gurantor for the business loan) I'm £30k in debt. I have no intersest in the business anymore, indeed the sight of the logo makes me feel sick. I've been working a minimum of 15 hour days , 7 days a week for 18 months and have struggled to get my rent money (£437) each month. I've given everythign to it but have reached burnout. I believe in the idea but no longer have the motivation nor desire to forfeit any more of my life. The result? I'm 33, single with £30,000 owing.

I had wanted to avoid bankruptcy but think it's perhaps the best solution to start off with a clean sheet. My concern though, I'm a lodger, on the electoral role and am concerned that the adress will have bad credit against it? I share with the landlord, he's my flatmate and we get on very well - I would hate for him to have to suffer any consequences for my going bankrupt. Does anyone know if this will happen?

I'm at a stage that I need to find a new career, have no money, am looking at my business going bust (if nobody has the desire to develop it to its' potential) and much debt.

£25k is with HSBC - does this make any difference when it comes to sorting out the debt at all?

Thanks for reading this.

We'll all be OK - at least we're in this forum and are talking about it instead of hiding away. That's what I keep talling myself anyway. :)
User avatar
By JaneClack
#4218 No Snoopy - your bankruptcy will have no effect on his credit rating and you could always apply for a notice of disassociation anyway. Email Experian at http://www.experian.co.uk. You say you lodge there so you are not associated on the rent book and as long as you have no joint debts his creditors should see NOTHING about you on his credit file.

Secondly, the whole point of the new bankruptcy regime under the Enterprise Act 2000 is that it allows honest entrepreneurs - both business and personal - to start again. Previously we had this regime which encourgaed people to set up a business but if it failed then kicked them in the teeth. With the move to the Enterprise Act it allows someone to get out from an insurmountable level of debt. The idea is, like the American system, to encourage people to try again. Think how strong their econmy is. It is not a sign of failure, it is a sign of something not working and therefore you need to get out rather than belabour yourself.

Check the information on http://www.insolvency.gov.uk and read through the leaflets you can download on the top righthand side of the website. In particular read the one entitled Changes in Bankruptcy Law from the Enterprise Act 2002. As soon as the deed is done the debt is gone and you could be out of bankruptcy in six months to a year.

And No - it makes no difference who the majority of debt is to.

Good luck and let us know how you get on - research and everything!
By snoopy
#4219 Thanks Sarah. That has helped me to make a deciaion but I'll certianly check the links out you've suggested.

Talking of my faltamate he just had to ask me for me myrent, I'm 3 days overdue and he's got bills he has to pay. I've got it together (my parents gave me £200 cash at the weekend, after they found out my situation which I was totally taken aback by) and have taken money out of the business for the rest. I had avoided talking to them about my situation as I figured it was my problem and I should sort it. How wrong that was. I couldn't dream of better parents and am so incredibly lucky to be blessed with such a fantastic family. Anyway, back to my rent -m,y landlord has just offered to loan me some money to help me through - he had no idea I was so strapped for cash either. I find it very hard to accept all this generosity and am finding it overwhelming but at the moment can't afford to be proud. How lucky am I?!

With regards to the busienss - I want to find a secure job anf not set up a new company. Looking at a stable income, which I've not had for 5 years as I've been self-employed. Looking to clean my slate, start again and move on. I will be back I'm certain, I'vw got some tought iems ahead in sorting this all out . Thank goodness this forum is here.

Thanks Sarah.
By Lann
#4269 Hi Snoopy - just wanted to show a bit of solidarity. I am in exactly the same situation as you with regard to my business - still believe in its potential but decided before Christmas that it was no longer viable in its present state (plus married with a 3 wk old daughter). This forum's been great and I'm starting to be able to think straight for the first time in yrs!
Hope it all works out for you soon. Good luck,
L
By snoopy
#4273 Hi Lann,

Thanks for your message. It's surprised me how much your simple message has made me feel - that I'm not the only one out there, from the point of view in believing in a business but recognising that it is no longer viable. I feel I have failed but life is so, so short that there comes a point when merely existing is no longer acceptable. You have a baby too which makes it much tougher than for me.

I've discovered that I have some amazing friends - I had absolutely no idea. Out of all doom and gloom, there's always a bright side. It's being able to find it which is the tough part.

Lann, do please keep me posted with how you get on. I'm meeting the accountant next week and talking with someone who might be interested in taking the business on - at least all my efforts over the last 18 months won't go to waste but I'm not too optimitic really, as they have no idea yet how much I've lost in developing it to this stage.

Good luck, Snoopy
By Lann
#4292 Snoopy - glad you're able to see the positive side of this scenario. And you are right - life's too short to prolong the awfulness of this kind of situation. Something worth remembering too is that its the business, not you that is failing; its clear that entrepreneurs do not wish their businesses to fail but sometimes it happens - there are lots of self-made super-successful people out there who swear that its imperative to lose everything at least once before succeeding. Its what I keep telling myself during those long dark 'midnight of the soul'-type nights when sleep evades me and I try and work out what I should've done better and how badly I've let everybody down.

I've only just realised with a little advice that Bankruptcy seems to be the only option and now I'm trying to get the cash together to pay BT and the fee for the petition. Other than that just trying to get my head around the whole deal and fit back into the nine-to-five routine again which is tough but do-able.

Have a good weekend,
L.
By JohnDoe
#4297 Another one here too, if it helps.

Shut down my business in October, after 7 months of living the dream.

But on the positive, it looks as if we all know where it went wrong, which is a huge benefit, IMHO

As my dad says "sometimes your the pidgeon, sometimes your the statue, but it's about trying to be the pidgeon more times than the statue."