Looking into bankruptcy - previous business debts piling up.

[mrk1]

Hi. I have been self employed for 3 and a half years now.

 

Running a fashion store, bricks and mortar etc.

 

I was in one location for 3 years and 6 months ago moved to a bigger location, more 'prominent' and the rest.

 

Long story short (for now), I am now closing the store and hope to focus online selling clothing, but not under the business trading name. (a new venture). However, I have debts chasing me, from clothing suppliers/brands.

 

I do not have the money they are asking for, and I have had a letter in the post now asking for a final payment immediately. Or the usual 'take legal action'.

 

The business is now LTD. But these debts where incurred when the business was a sole trader.

 

What are my options here?

 

Is there anyway at all I can cancel this debt under the business and fold the business?

 

Any advice/suggestions welcome.

 

Thanks.

[AndyOrch]

Thread moved to General Legal Issues.

 

Regards

 

Andy

[AndyOrch]

As the debts were incurred as a sole proprietor Im afraid not...as with a LTD company when that dissolves.

 

You could consider a Time Order :-

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?382658-Time-Orders.

 

Regards

 

Andy

[mrk1]

OK.

 

The total debts might be in the region of about £2000 spread across some brands..

 

I have some questions regarding dealing with these people in my own way.

 

I have been told as well experienced how a lot of these companies work.

 

If I did not pay £'X' - Amount, and just closed up shop (sole trader) and just left the premises... these companies would most likely keep sending letters and give up with no reply, or 'sell' or 'tender' the amount out to a third party ('debt collection' company or similar.

 

The debt collection company would continue to send letters out and eventually give up.

 

3 out of the 4 companies only have my company name, and not my real name down, and all 4 only have my business address.

 

I simply do not have the money to give, the last 4 weeks have been so tough.

 

So now I am thinking to pay the smaller more independent businesses, and the bigger more super sized businesses to leave the debt with them.

 

The highest debt to a supplier is £610.

 

I have heard that if it is below £500 any such 'debt collection' companies can only apply to a small claims company. Is this the case?

 

I can simply not be the 'nice business man' giving his past pennies out to these companies. I do not have.

 

Can someone advise me on the above???

 

Thank you.

[AndyOrch]

All small claims can be up to the value of 10K now....its your choice on how to deal with them...ignore and wait for a claim or just try to ride them out till they are over 6 years old.

 

Andy

[mrk1]

Hi Andy, thankS for your reply..

 

When you say all small claims can add up to £10,000.... In what sense?

 

As only one is above £500, I was told that that was the one to get below £500.... And if any of them under £500, that they could only be taken to small claims..

 

The people I am dealing with in the brand, do know my name, but all the letters they are sending out are not addressed to my own name, just the business name..

 

My thinking is that if I leave these long enough, that they will eventually go away, or at least that the 'debt collection' companies will not know where I am as they will only have my older shop address (and possibly mobile number - which might be changing soon).

 

And providing I don't make any conversation or correspondence with said 'debt collection' companies I have nothing to worry about?

 

I certainly have no intention right now to hand my money over, I am going to need this to survive and put into new projects to see me safe and making money in the near future, if you can understand and respect that?

 

Hope you can advise.

 

Thanks.

[AndyOrch]

Small claims limit is now £10K the £5K was changed last year.

[steampowered]

The risk is that the creditors may try to sue you at your business address. This would get them a default judgment, i.e. a CCJ which would go onto your credit record. That would damage your ability to get credit in future. I'm not sure if future suppliers would do a credit check before extending credit.

[mjt2013]

I'm not sure where you've got this £500.00 limit from but what Andyorch says about that is right. I wonder if someone was thinking of the bankruptcy limit of £750.00?

[mrk1]

I hope this is in the correct section.

 

I will try to be straight to the point here.

 

Ran a retail business for nearly 4 years in local town center, business was ok and then I relocated to a new premises and took out personal loans from friends (as well as previous loans from family in the past).

 

I lasted 7 months in new business location and the trade wasn't strong enough to support the increased rent, rates and general bills.

 

I was a sole-trader all the way through (wish I had gone Ltd now)

 

Cut to the point.

 

I now owe £4000 in rent and service charges, £3600 in business rates, £1000 in HMRC fines (maybe more now not sure), and probably about £1500 - £2500 in other miscellaneous debts.

 

I am running a business online now, still within the industry my retail store was in but not taking anywhere near as much money. Really is just getting by, still owe about £800 on house rent (my house mate is being really helpful).

 

It just seems like I can not move forward with these spiraling debts creeping up. There's no way I can comfortably afford to pay thee debts off and the stress it's bringing is just not good for anything.

 

I was looking into bankruptcy but am unsure if it will bring even more hardship.

 

Judging on the above mentioned debts, what are peoples thoughts about me going bankrupt? I just can't see another way to clear this stress and mess.

[Swoosh84]

While I am not able to assist on general 'personal' advice, bankruptcy will affect your current on-line business. If this is a Limited Company then the company will be wound up as a result of your bankruptcy by the official receiver. If you are a sole trader then any stock you may have will be sold by the official receiver.

 

If its a Limited company you should resign and appoint another director to run the said business, remember to sell your shares too. Remember, technically speaking you are not allowed to run or promote any limited company until your bankruptcy is discharged.

[mrk1]

No it is not limited, to be honest if I may use such a phrase it's a 'little bit on the side' if that makes sense, it's not really a business as such.... Just buying and selling a little bit of clothing to make some money.

[ploddertom]

I'll move you to the Forum that deals with these things where hopefully those that know may be able to help

 

http://www.consumeractiongroup.co.uk/forum/forumdisplay.php?169-Formal-Solutions-Bankruptcy-Administration-Orders-Debt-Relief-Orders-and-IVAs

[mrk1]

thanks.

[mrk1]

Hello Ploddertom, am I looking in the right place for replies as I thought I would have had more replies??