Voluntary or involuntary

[vrockie]

My wifes business is about to cease trading (sole trader) with debts to banks of £10k and liabilities to franchisors with regard to franchise agreement and also 2 years to go on shop lease.

 

My questions

 

Would it be better just to cease trading and let creditors make my wife bankrupt (what implications can this have - will they be able to send bailiffs to our house) or should she go into voluntary bankuptcy.

 

How long does the process take for voluntary?

 

What can landlord and franchisor do to us for breaking agreements and what would be their process?

 

If bailiffs came to the house what is classed as basic living items, have 2 kids with things like Wii , tv, laptops etc?

 

Thanks for your help in advance

[debtinfo]

Hi, Once a bankruptcy order is made no matter who petitions the process is exactly the same, the creditor does not have more power because they initiated the proceedings. The problem is often they will not make you bankrupt but use other methods. If you go bankrupt they cannot send baliffs round. If they go for a CCJ they can send baliffs if the payments are not made. The landlord can distrain (take items) but only on the business property. If you need the protection of the court it would be better to make yourself bankrupt. Have you checked out all your other debt options, perhaps speak to CCCS, National debtline, CAB or Business Debtline, who will look at your situaton and give advice

[vrockie]

Thanks Debtinfo, can you tell me what the landlord and franchisors other methods could be as we have just discussed that we could make a regular 'token' payment to the banks for the 10k initially, the only real reason to go bankrupt would be to ofset the liability to the franchisors and landlord which would be 2 x years rent = £24k and 4 years x 10% of gross takings for the franchisor and breach of contract. If I can avoid the liabilities I would prefer to go into a payment plan with the banks.

[toddle2u]

What assets do you have? Is there any equity in your property? The landlord and franchisor may well go the route of getting a CCJ and then applying for a Charging Order on your property.

 

 

If you have no assets as such my initial advice would be to speak to the landlord and franchisor and tell them that the business is no longer viable and you are to cease to trade and see what they say. It is then up to them to make the first move in trying to recover the debt and you will have a better idea of their intentions regaring this.

 

As debtinfo said i would speak to Business Debtline

[vrockie]

Thanks toddle2u, I thinik that is the way we are going to go, let them play their cards first. I have spoken to BDL and that is basically what they suggest as first move.

 

We have about £20 - 25k equity in the house but I also have large debts (£28k unsecured) from supporting the business for the last 3years.

 

I suspect the landlord will be ok and not pursue but the franchisor is evil and i have no doubt that they will come after me.

 

Can I still go bankrupt after a CCJ or Charging Order?

What cost would be involved for the franchisor to do this?

 

House is in joint names.

[toddle2u]

As the house in joint names they are only able to get a CO for half the equity.

 

Yes you can go BR after a CCJ and CO. The CCJ will be wiped out by the BR but the CO will have become a secured creditor so will stand unless overturned by OR. This will depend on howong it is after CO is granted on property.

 

It will cost them about £1500 to make you BR

 

PM me who the franchisor is as I have had some dealings with franchises and may be able to give you a little more insight into how they will react

[vrockie]

It now looks like wife will go for bankruptcy as there are too many unknowns with CCJ and Charge Order, we dont want the unsecured to become secured on the house.

 

Her biggest issue with this at the moment is can she keep her car that is on HP.

 

She went for the scrappage deal about 5 months ago and took out a HP with Toyota Finacial Services - total hp is approx. £8k with only 4 payments of £167 made. Does anyone have any dealings with Toyota FS and will they take the car back even though I am prepared to fund the payments?

[toddle2u]

As long as the payments ar ebeing made I can't see why they'd do anything about it.

 

I'd still think hard about going the BR route and waiting for them to make the first move. There is a long way to gp before they get a C. You could even apply for BR after (if) the CCJ is issued and a CO is made. Also don'tforget you can offer to pay what you can afford on the CCJ and have this ordered by the Judge. As long as you keep up these payments they can't go for a CO

[vrockie]

Well, we have now closed the business and have received the following letter from the franchise's accountant who is acting as a DCA and they are threathening bailiff action, please could someone advise what the next move is.

 

I have just replied stating that the account is in dispute as they have added an extortionate £3000 to the bill for manuals, signage and the till which I have also agreed to return at their convienence, and I have mentioned that the case is being looked into by my MP and also for a breakdown of the debt.

 

What I need to know is will they continue to send bailiffs in at an early stage or are they legally obliged to carry on with correspondance before any action.

 

I would hate to have bailiffs turn up especially when my kids are home and for them to see sombody taking away their xmas presents.

 

Thanks for all your help in advance

[vrockie]

Copy of letter recieved

 

Watson Hope & Co

Accountants

Po Box 2960

London

NW3 7HX

 

Tel: 0208 84588864

 

[email protected]

Ref: xxxxxxxx

 

 

Dear Sir or Madam

 

Re: OVERDUE ACCOUNT xxxxxxxxxxxx £9000

 

 

We are debt collectors acting for xxxxxxxx xxx in relation to the above. The debt has not been paid despite reminders and we are now instructed to collect it from you forthwith.

 

If you have reason why not to pay your debt please will you advise us immediately. Otherwise would you please now make out your cheque for £9000 and send it to this address by return.

 

you may want to take legal advice because failing reply our instructions are to claim against you with a view to instructing bailliffs. Note, this will be without further reference to you whether as to costs or otherwise.

 

Alternatively if you are in financial difficulties you must contact this office with your proposals also by return.

 

Yours faithfully

 

Watkins Hope

[hatesdebt]

The main thing to remember with bailiffs, is to simply not let them in - no matter WHAT they say.

 

If you don't let them in, they can't place a levy on your goods. They can only force entry with a signed court order and they need a ccj against you for this anyway. Judges generally do not like signing the warrants for forced entry.

 

You need to look at some of the stickies on this site with regard to what bailiffs can and can't do. They have nowhere near the power people think!..

[vrockie]

Thanks hatesdebt

 

Wife had first phone call from the DCA on tuesday (bring back hanging I say) anyway, basically they are refusing to reply to my letter asking for a breakdown of disputed debt charges, also saying that my MP has no legal right to advise me and will be going for a court order in 7 days if debt is not paid. When my wife said she was not willling to discuss over the phone they said if she wanted a letter it would cost an extra £400 on our debt each time a letter was sent out.

 

Can you advise if the are any legal process which the DCA has to abide by as in time scales, answering our letters etc?

 

How long does a court order take to get and does this mean they are applying for a CCJ or does a CO just allow them to force entry to my home?

 

Can I have a CO put aside?

 

Looks like they are going straight for the jugular.

 

Appreciate if you could help as am looking to say sod it and fill in the bankruptcy app tomorrow and make appointment for court.

[vrockie]

Hi All, Its gone a bit quiet on here, if anyone could advise me on the current situation I would really appreciate it.

[socktug]

Hi All, Its gone a bit quiet on here, if anyone could advise me on the current situation I would really appreciate it.

 

Hi, just a suggestion. It might be worthwhile making a post in the DCA forum here and pointing them to this thread and ask for their advice.

 

They are very good at what they do!

[vrockie]

Thanks socktug