Returning To The Uk Facing Bankruptcy?

[casaboy]

Hello all,

 

I've not posted here for a long time.

 

Basically I've got myself into a complete mess, and yes some of it is my stupid fault. I'm not proud of it, but i am where i am.

I've read similar posts but not quite as complicated as mine.. and havent found any answers either.

 

I'll try and explain without going into war and peace.. and I'd really appreciate some constructive advise from anyone who may have been in a similar situation or might be able to offer some advise.

 

So, 2 years ago I decided to leave England for a new life and new business in Spain.

At that point a had 2 x credit cards with approx 5000 each, which i couldnt afford to pay off in full, so decided to continue to carry on paying the minimum balance.

I also had a small house in the UK which I arranged to be rented out for 9 months as a safety net in case I decided to move back.

As time went by the business took slower to create an income than planned, and the credit cards became increasingly difficult to pay. I managed to reach an agreement with them for token payments for a 6 month period, but in that time i moved to another rented property and whilst I know this was silly, I didnt both getting back in touch with the credit card companies and as such this debt is outstanding. They havent chased me, as they dont know where i am, yes this was a stupid thing to do, but I cant change what I've already done. I wish i could.

To complicate matters further, after the tennant moved out of my UK property, i couldnt find another one and couldnt keep up the payments on the mortgage, so decided to 'hand the property back' to Northern Rock. This decision was based on the fact that I had no intentions to move back to the UK, and figured it was the lesser of two evils.

As with other threads I've read, due to the plummiting UK property market, the value of my house has 'dropped' by £90,000 now leaving me in negative equity of over £70,000. I happen to know that the property has just been sold and it is currently going through motions.

I have no assets to pay this off, nor do I have £70,000 (or £1000) lying under the bed.

 

In the past 8 weeks, my father has been diagnosed as terminally ill, and as such I cannot justify being abroad and I have decided to return to the UK in 8 weeks for the foreseeable future and close the business there.

In parallel to this (and quite fortunately), I have been asked to go into a partnership as a Director for business in England, which is currently being registered in companies house.

 

So, whilst I have the credit card debts that may well have been written off by now, they will clearly show on my file and i assume will cause me serious problems in my personal life for some time - mobile phone, tenancy agreement, car lease or HP, and anything else that requires a credit search now and for quite a while?

 

In addition to this, with the sale of the house now being finalised, I'm assuming someone will want to have a chat to me about the £70,000 negative equity position with my old house.

 

And finally, as a director of a new business in the UK, this presents me with some serious problems:

 

1) should the company need a loan or any sort of credit, i understand the directors all get credit searched? if so, then this will hinder the company getting any credit.

2) I assume I will immediately be 'on the radar' once I'm registered at company house, and could therefore cause visits to the business address either for the credit cards or more likely the house.

3) I have not discussed my financial situation with the other directors (and didnt particularly want to) but now I think maybe I have no choice.

 

So, I guess I have a couple of options:

 

a) declare bankruptcy and face the consequences for however long it takes. And I assume I would need to be removed from the company as a director (although could probably remain as a shareholder?) but not be able to obtain and credit / bank accounts etc for years and years to come.

b) Or, sit tight and wait till somebody comes knocking - although as I will need to rent a property and have utilities bills, car insurance etc (as well as some sort of paper trail in companies house) it wont take long before someone comes banging the door at my new rented property (if I can even get one) or at the registered business address via the paper trail from companies house.

 

So, a complete mess.. and I just dont know what to do.

I have to go back to the UK and face the music, but I just dont know what this will mean to my life (both personal and business) for the foreseeable future.

Whilst i have no problems paying said debts off with whatever I can afford to be, I'm not sure whether this is even an option (particularly with the negative equity) as it will take me 30 years or so to pay.

 

if you've read this far, thanks for staying with me.. I just hope you can offer some advise or point me at someone that might be able to offer me some practical advise about how to tackle this and what to expect the impact to be to my day to day living.

 

Thanks for reading.

 

casaboy

[gizmo111]

Sorry to hear about your dad, and whatever else you do, don't let worry over these debts be a priority over spending time with him in whatever time you have left.

 

Re; the debts & business

 

Will you be investing in the business to get the shares that you mention? If so how much?

Will you be receiving any inheritance and if so how much roughly?(sorry to ask but it will make a difference to your position)

 

If you go BR then all your current debts including the shortfall will be wiped out, but your assets will be taken into account and these could be the shares. You are correct in that you can still be a shareholder in the business butthat will depend on the value of them. You cannot be a director whilst BR. If you receive an inheritance whilst BR then around 60-70% will go to the OR. Once you are discharged - average time is around 9 - 11 months at present then the inheritance and any other windfall is yours to keep, as will be any assets you purchase after this time.

 

You are right in that this is going to affect your credit rating and life for quite some time whatever you choose to do.

 

I think you need to talk to your propsed partner and come clean, and consider delaying your involvement in the business until you are discharged from BR.

 

More info here http://www.consumeractiongroup.co.uk/forum/formal-solutions-bankruptcy-administration/56970-insolvency-dealing-debt.html

[casaboy]

Hi Gizmo,

 

Thanks for your response.

 

There will be no investment on my part in the new business (other than labour), the other directors are buying into an idea and want me to be part of the company as a major shareholder.

Yes, at some point (although this is unclear) there will be some inheritance. This will probably be less than the negative equity amount mentioned, but might not be far off. Obviously dont want to think along those lines but i guess you have to think long term.

 

I dont particularly want to go down the BR route, but not sure I have a choice?

Presumably it's best not to go down that route and try to reach an agreement without that?

As far as share values; 75k has been set aside by the partner to keep the business going for a set period of time until it sees profit, so on that basis I guess you could arge that they are worth my % of the 100%.

 

I dont know your background but you seem very well informed, so do you happen to know if I could somehow not go bankrupt, and who I could speak to to assist with reaching an agreement?

[gizmo111]

I dont know your background but you seem very well informed, so do you happen to know if I could somehow not go bankrupt, and who I could speak to to assist with reaching an agreement?

 

Your other choice - given the inheritance is going to be quite sizeable would be a full and final IVA, which means you offer say 50% of the total debt, it is wrapped up in an IVA and your liabilites end with a one off payment.

The alternative would be to make arrangements direct with the creditor, but these will go and on for years and have much more of an adverse effect on your long term finances.

I suggest you speak to a Insovencly Practitioner - have a look here for your home town.

 

I think the first thing you need to do is talk to the business partner. are you married - in which case your wife could hold the shares for you?

Edited February 4, 2009 by gizmo111
added link

[Guest dvdriley]

Sorry to hear about your problems, cant add anymore to what has already been said, except stay in Spain. Its got to be better than the UK

[casaboy]

thanks guys.. i wish it was a simple as staying in Spain

As far as the shares go.. no I'm single so I guess they would need to stay with me.

if I went down the IVA route, the share would be safe though?

In essence they're not actually worth anything at the moment anyway.. they maybe in years to come, but at the moment they have no tangiable value

[gizmo111]

if I went down the IVA route, the share would be safe though?

 

Yes should be - personally I would speak to a good IP (maybe get a 2nd opinion as well from another in the area)..... talk to your partner, look after your dad and take it from there. Don't rush into anything in a panic.