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HELP / ADVICE for failed entrepreneur - Bankruptcy?


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Dear all,

 

Have read many of the threads on here, its great so many of you contribute and provide assistance based on knowledge and past experience. I fully intend to do the same!

 

My situation is fairly complex and although have tried to find answers, there is so much conflicting information and most of the debt helplines have not been able to answer my queries and have not be able to find a reliable/ honest company or individual to give decent advice!

 

My story

 

In 2006 I started up a company. I was in some minor debt at the time but nothing major maybe £5k. Over the course of the last few years I have slowly invested in a variety of ways, i.e. using credit cards, banks, savings into the business. This was not all invested in one go into a business account. This expenditure was used for my day to day living, working capital and research and development into the product I was producing. These costs included travel, entertaining, visiting trade exhibitions, meetings, paying freelancers, finding team members etc.

 

I sold my property in 2007 and again invested proceeds to continue developing the business. I got very good feedback as to its viability from industry specialists and started looking for investors to commit further capital once mine had ran out. Each time I found an investor this added more costs due to regular meetings, initial legal fee's etc. Various investors showed interest and later dropped out.

 

In the last four years I've done all I could to keep it going, even sleeping in my car not to waste money paying rent! Its clear that I now have to give up and bankruptcy seems like my only option as I have no job, no assets and no property.

 

My biggest fears and questions relate to how this is going to be viewed by the OR.

 

Could it be seen that on the basis that I had no income I used that credit knowing I had no means to pay it back?

 

I recently (3 moths ago) had two opportunities to meet potential investors in Russia and Croatia and used my a credit card and amex charge card to cover these trips (this was my last hope to seal a deal) - Naturally I didn't stay in 5* hotels just cheap airport hotels and economy flights - but will this still be viewed badly, that only a few months ago I used credit for what could be viewed as a holiday?

 

As no deals were struck and with no capital or available credit left none of my DD payments have gone through and the total unsecured debt without fee's and charges is about £100k - plus they repo'd my car at the airport car park and sold it at auction for £15k less than it was worth.

 

I get about 20 calls a day but have stopped answering as I am not sure what to say, am staying on a friends sofa so have no fixed address to receive post and have no idea what creditors have done as my post is probably being returned from my old address.

 

Any help or advice would be greatly appreciated as its starting to drive me crazy and not sure where to turn. Doing nothing is much worse than dealing with it, am just unsure how to deal with it.

 

Thank you!

 

Victor

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Hi Victor

 

You story is similar to many people on here so please don't beat yourself up over it. You shouldn't see your current problems as a failure more a set back. Many of the greatest entrepreneurs have a string of insolvencies behind them - look at Branson as an example

 

With regards to your queries on what the OR will think concerning your expenditure in tryig t get the project off the ground - don't worry about it. It does not sound like you have been reckless just trying everything you can to make the project work but unfortunately ran out of funding. Thy will be fine with it and will not judge you. They have heard it all before.

 

From the info provided i take it you did this as a sole trader. If so I would wait for one of the crediitors to make you BR rather than waste the money doing it yourself

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Toddle,

 

Thank you, things always seems worse in your head then in reality, but nevertheless effective!

 

I had a limited company and put through all the receipts etc. and expenses. The company has now been struck off as I did not file the last return or accounts. The debt is all personal the company did not borrow anything as it was a start-up.

 

I was considering simply waiting but thought this would be viewed badly. There are 7 credit card companies, 1 loan company, 3 banks and ING for the car. I would have thought that ING would be the first to bankrupt me being the largest creditor. If they do bankrupt me will I still have to complete all the forms and attend court or does it just happen without my involvement?

 

Should one call up and ask? As am on a friends sofa, out of fairness to him I don't want to give his address so am not sure what to say to the companies that is why I am not taking the calls. Is there a legal obligation to provide an address for correspondence?

 

Apologies for all the questions!

 

Thanks again

 

- Vic

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Vic

It is always a lot easier looking in from the outside and being able to provide a more rational view whereas when you are in the middle of the storm it always seems like your whole world is coming crashing down. It isn't - as I said before it is a temporary set back.

 

How much do you owe ING? You are correct as these are more likely to go for the BR before the others. Yes if they do go for BR you will still have to complete the forms. You will need to complete the forms for the interview with the OR.

 

If you don't attend Court the BR Order will be made in your absence but you will still have to have an interview with the OR.

 

Have you another address you can use or just a correspondence address? You are supposed to give creditors details of a change of address but not everyone does.

 

Personally I would wait for them to do it to you and wait and see what happens. I would (try) to put this to the back of your mind at the moment and concentrate your efforts on getting yourself back on your geet at the moment which is far more importtant than worrying about creditors who you have no means of paying.

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Hi Victor,

 

been there done it my friend. I know its easy to write on a forum dont worry, but seriously, DON'T!

 

In my opinion, you would be better petitioning for your own BR, as it can be a little long winded, 'waiting' for someone to make you bankrupt.

 

i.e a few more questions from the official receiver as to why you didnt make yourself bankruupt. Nothing major I know, but you get my drift.

 

It is NOT an offence not to have an address. If you are concerned, simply open a holding address. Do this at 'MailBox' in the high street, or look on the net. There are tons of accomadation addressesyou can 'purchase' for a monthly fee in which to send mail.

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P.s Not sure if someone makes you bankrupt and you dont attend court what happens? If it were me, I would want to do it first, and get it done properly. Remember, however wierd it may seem, the court will never judge you in bankruptcy, unless of course you have been entirely reckless, but having read you post above, its a repeat story of 1000's of cases. and everything there seems totally legit. All you wanted to do was keep the thing going, and thats all of us ever want to do..

 

P.S forget the amount you owe, as it is entirely irrelevant. my o.h had to go BR for big money, bank guarantees, the lot after a massive business failure, and it was all done and dusted in one morning at court.

 

All the best

DB

Edited by danboy381

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Thank you for all the comments.

 

I think it would feel better if I were to petition my own BR, I cannot see how waiting is going to change anything. If I got a job and from what I've found so far not many like to employ entrepreneurs - I still wouldn't be in a position to pay it back.

 

Hardest thing for me would be the fact that in the UK unlike the US, bankruptcy is seen as a bad thing in business and starting up something new will be more of a challenge and not possible for at least a year.

 

Does the OR actually go through each transaction for the last 5 years of every account/credit card etc. or do they take an overall view?

 

- Vic

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From what I know Victor, they dont have time at the moment to go through too much - can you imagine going through all the credit card statements from the last 5 years on 1 card alone? It would take far too long, and in any event who cares whats showing on there? They will be looking at the overall situation, not dwelling on the fact you took a flight to a meeting. They will only really be interested in big assets that you maybe hiding. If you havent got anything then theres no worries.

Unless you have been completely reckless and stupid

If theres any wrong doing on your part, you will be putting this info down on the forms to petition for your bankruptcy.

 

The O.R now realises that many BR's at present are down to company failiures which yours is. BR for 12 months and an early discharge in 6 is more than possible, as you can argue you had no control over the world economy plunging downwards. After your discharge no ones really knows about your BR anyway, so its not like you have to go into an investor meeting saying, well first attempt failed , I went BR but here I am again.

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Danboy, you're right however am sure any due diligence would show a BR, getting a mobile phone, rental on an apartment etc. would all be near impossible given a credit check for a while. I suppose these are all the downsides to the BR!

 

Once you're BR do the restrictions only apply in the UK or in EU. I mean could a BR go to another country and setup a company whilst still undischarged?

 

- Vic

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Hmm,, personally, I kept an orange monthly contract going with no probs, on DD and still have it (despite the OR telling that he would inform them and they would then cut the phone) , got a friend to step in as Director of one of the companies for us, ( he then employs you) and if you want an apartment, then go to a private landlord.

 

I know several people that have declared bankruptcy in the Uk and gone on to form Ltd co's in Cyprus. I dont really think that other countries are going to check your credit profile in the UK. In any event why do you want to be a director? You will probably only be BR for max 12 months anyway.

 

In essence, nothing really physically changed when BR

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In essence, nothing really physically changed when BR

 

Spot on. I put my wife on as a Director whilst BR then switched myself back. Kept business o/d and also Company Credit Card in my name with no problems.

 

The problem to overcome is putting obstacles in your way until they actually happen by continually thinking about the worst case scenario and what will or won't happen

 

If you decide to male yourself BR or petition yourself the most important thing to do is get on with your life and get back on your feet

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  • 1 month later...

Hi guys,

 

Am having some real difficulty completing the Cause of Bankruptcy section - no matter how I write it it doesn't sound right to me. Maybe because am too close to it myself, can anyone assist or give me some examples that I can re-word or at least get an idea of how best to describe it.

 

My circumstances were nothing exceptional as per my first post above, just can't seem to get it right - writers block! :rolleyes:

 

Also under unsecured creditors I have listed all the credit cards and two of the questions I don't get date incurred and what was it for. For credit cards that have built up over say 5 years what date are they asking for and if it was various things do you simply put LIVING EXPENSES?

 

Some pointers would be very helpful!

 

Thanks.

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