Sole trader business debt passed onto courts and a judgement made...

[mrk1]

Hello.

Site looks like could be some help.

 

I have been running my own clothing shop for 8 months now and had a bit of money saved up when i opened and spent a lot of it on stock (wish i hadn't now).

 

I got some stock on credit - but was unable to pay the invoice come 30 days when it was due. There was a few invoices that went unpaid.

 

However, one has esculated and been sent to the courts... and a judgement has been made against me. I managed to speak to all parties involved (solicitor of the company, the courts, the enforement officers (MARSTONS) and the company themselves).

 

Basically they sent out a letter which i did not receive asking what i intend to pay, however I did not receive this.

 

So now the solicitor said that a judgement has been made and a bailif will be round to my house anytime soon.

 

I don't really have anything of any value (my house mate does though - tv, hi fi, ipod etc). I have a few items like ipod and record collection, bike). I a not even taking a wage at the minute, because business is very slow.

 

I have rang a few solicitors but none of them can give much advice. A few have. I am going to citizens advice tomorrow morning.

 

Obviously I owe this money and want to pay it off.... but it is all these charges that make this a big problem.... silly charges like 75 pound to apply to make a payment (if i want to make an offer of payment, in writing, i have to pay 75 pound), also chrges when the enforcement officer comes roud and all the other charges.

 

The probem is I am not earning any money other than the money make in the shop, but this is not even enough to pay my rent on my house, sometimes I am working in other jobs like promoting for bars and clubs of a night but this is hardly any money.

 

The amount of stress is too much, it's like a pit and these horrible people could just not care less.... honestly what am i supposed to do?

 

Please can anyone help with a good answer??

[tomtubby]

 

I cant provide much advice as I am rather confused at what has happened. Has a CCJ been awarded against YOU at your home address or against the business?

 

Do you trade as a Limited Company?

 

How much is the CCJ?

 

You have no need at all to allow the bailiff to come into your residential property. Any entry can ONLY be by "peaceful means".

 

The shop is entirely different as the bailiff can simply walk in.

 

To avoid the removal of all of the goods within the shop you will have little choice but to agree some sort of monthly payment arrangement.

 

Has a High Court Enforcement Agent made a visit? If not, you could consider applying for a "stay of execution". Contact the court that issued to writ for details.

Edited December 13, 2022 by dx100uk
unnecessary previous post quote removed

[Thegreenpimpernel]

TT said:

 

"To avoid the removal of all of the goods within the shop you will have little choice but to agree some sort of monthly payment arrangement."

 

Or get on the internet and incorporate (set up a ltd company) tomorrow. You can get same day service from some formation agents, but do check out their reputation online, not all of them are up to scratch.

I'm not suggesting evading the debt, just a survival strategy.

 

Welcome to the 'should of gone LTD from the beginning - but learnt the hard way club'. There's a lot of members.

 

If your business is viable and you're determined to carry on, there is nearly always a way. The stress will end, and seems to be a necessary 'rite of passage' to full competence.

 

I've been there, and i'm keen to help.

 

I would:

 

1)Go with TT's advice re. the "stay of execution"

 

2)Get your flatmate to do a Stat. Dec. or other 'proof' of ownership just in case.

 

3)A bailiff may be unable to seize certain goods at your shop, for example:

 

a) Goods you have not yet paid for, that you have on account. There is a retention of title clause in most trade account t&c's which means the supplier still owns them until you've paid.

 

b)Hired items like credit card terminals, tills etc..

 

Locate / prepare the paperwork to prove the above.

[mrk1]

Great advice thanks..

 

I am a sole trader, but can i set up as a ltd and evade this problem????

 

I have rang marstons and they said their first port of call would be to send out an officer to come and try make an arrangement to pay.... i asked if any fees involved and they said no... not on the first call...

I am just worried about all the charges they out on..

 

By the way it is linked to my home address as the brand/company sent goods there first..

 

I am just off to Ciotizins advice right now....

 

 

I will look into this paperwork also today....

[Thegreenpimpernel]

Going Ltd wouldn't evade the problem, but it can prevent disproportionate consequences by separating the business and it's assets from your current problem.

 

Many small businesses find all their stock, and their ability to carry on trading removed to pay a relatively small debt.

 

They will pretty much empty a small retailer to pay a £1000 biz rate or trading debt.

 

I'm not optimistic about this 'arrangement' and 'no fees at this point' business.

 

More likely, once you let him levy, he'll demand an unaffordable monthly payment, take all your money for a few months then possibly empty your shop when you can't keep up!

 

By transferring your business stock and assets to a Ltd entity, they can't impose impossible payment plans (no threat to remove goods and effectively shut you down).

 

And, you as an individual will be insulated from future financial burdens.

[Thegreenpimpernel]

Just to clarify:

 

Going Ltd now, means the existing debt stays with YOU as an individual.

[mrk1]

So definitely become a ltd now...??

 

And that will make all my stock as ltd assets? Which means that they can not empty the shop if I miss a payment.??

 

Update on this morning......

 

I have spoke to a lot of people this mornign and this afternoon.

 

- citizens advice -

 

Guy I spoke to was very chilled about ti. He wasn't too helpfull, about the beast thing he done was give me a number for a business specific number to call. he was just saying dont worry about it, everythign will be ok, they can't do ****. etc etc..

 

- Business specific number - Not sure what they were called but they gave some good advice. they mentioned the n244 form, again and they said what I needed to do was to send this off to the court as soon as possible to stop marsdens from taking action. The £75 fee is just not right but hey. They also said that marsdens can not do anything when that form has been processed..

 

 

I then rang the court in walsal to ask about this form and how to pay the £75. Long story short after about a 20 minute phone call, she said why dont you just speak with the solicitors or marsdens to try to come to a payment plan, as thats alll youll be doing with the judge anyway.

 

I rang the solicitor and he sais that he will be expecting the writ of fifa anytime soon and as soon as he gets that he will send it to marsdens. He would not help me out as he said he is acting on behalf of the client . No help there. He said if i wanted to write in and make an offer, he would then pass it onto the client and see if they would accept.

 

He said i could fax or email it so have just emailed now.

 

I'm hoping that they accept my offer of payment, I have written a good letter and am now just waiting for a reply off the solicitors.

 

This whole system is such a con and a mess. i feel like such a small helpless part in somethign way out of my control and its a horrible feeling.

 

There really isn't anyone out there to help. Well I mean here is a great place and I have spoke to some good people who have been helpful, but at the end of the day, marsdens are like a nasty pack of wild docgs barking on chains..... my only problem is that soon their chains could be cut free!!

 

 

Wish me luck...

 

 

Oh I know someone said they can't but can bailiffs force entry on a house or not.... and how vigilent should I be when answwerinf the door?

 

 

** just called the solicitors now who have said they got my email with the letter and they will be sending it onto the client. He said he has put my file to the back of the files so that is good at least).

[Thegreenpimpernel]

Sounds like you're well on top of this.

 

But being an eternal skeptic, i would say don't trust any of these people. If they agree to a payment proposal on the phone, send them an e-mail requesting confirmation of the agreement by return. Use the excuse of needing to know the exact due date for sending the e-mnail or letter.

 

And yes, becoming Ltd and transferring the stock and assets does protect the goods from seizure, but if you can get a payment arrangement in place you will be able to think things through a bit more.

 

Personally, having made the mistake myself before, i can't understand why individuals put their assets and sanity at risk by being sole traders.

 

It's quick and cheap to incorporate, looks more professional, usually reduces the tax bill, and doesn't have the drawbacks it used to. For instance you will almost certainly be exempt from account auditing fees.

 

There are things to consider, like a new bank account, return filing fees (£15 / year), account filing fee (£15 / year) and a possible tax liability if you made a profit 'selling' your stock to your company.

 

Like i say, sounds like you are well up to this task. Create some breathing space and consider the way forward.

 

Oh and NO they cannot break into your home.