Bankruptcy threat on a personal guarantee - can anyone help please ?

[AndyOrch]

served on us personally

 

With your name on not the company's name

[nyla]

yes in our name

[dx100uk]

but you have not got the SD so you don't know who's names are on it yet?

 

an sd should not be used as a debt collection tool.

[AndyOrch]

Okay......so the SD was served in March this year in your personal names.

 

You sold the company and this debt since service...you didnt set a side and agreed a payment plan of £500 pm...even though you sold the company and debt ...so you have admitted liability my making the payments.

 

Now the creditor is not happy and have decided to serve a Bankruptcy petition...which is yet to be served on you.

 

There is no expiry period for a statutory demand. However, if more than 4 months has passed since you served the demand, they will need to explain to the court why you have delayed in presenting a bankruptcy petition. If the delay is too long, they may have to serve a fresh statutory demand.

 

The creditor will also If a bankruptcy petition is based on a statutory demand, file at court with the petition a certificate of service verified by a statement of truth that gives details of your service of the demand.

 

The person who verifies the certificate of service and statement of truth must be the person who served the demand, unless the debtor acknowledges service (agrees that they have been served it). If the debtor acknowledges service, then the person who should verify the certificate of service is the creditor or a person acting on their behalf.

 

If you wish to defend the petition you will be given a court date endorsed on the bankruptcy petition allowing you to attend court to defend the bankruptcy proceedings. Given that you sold this as an outstanding liability to the new owner of the company you have a defence to the bankruptcy petition disputing the debt, or a counter claim or cross claim against the petitioning creditor.

[nyla]

we have got the SD that came in march that was with our names on personally one in my name one in my partners name

 

so in march they sent us the SD in our names and the winding up petition in company name

 

told us they would put the winding up petition on hold( march 18) and if we fail to pay our arrangements they would carry on with the petition we stuck to or word they just carried on with the petition (july 18) so we never paid Julys payment thats why they are starting with bankruptcy petition

 

i have attached the letter that was hand posted through my door this is how i know they want to start bankruptcy

bankruptcy petition.pdf

[AndyOrch]

Out of interest how old is this debt ?

 

Was there any dispute with the debt ?

[nyla]

the debt is from the October - December 2017

 

no dispute of the debt

[AndyOrch]

And you have the paperwork from the sale of the business confirming they bought this debt ?

[nyla]

yes we have paperwork but that carnt stop them coming after us personally can it?

[AndyOrch]

No.....the PG can override the sale.

 

 

A simple explanation disregarding the PG.

 

Many business owners incorrectly assume the debt that the business has will disappear when the business is sold. This comes from the belief that a new buyer will simply take over the debt. In some cases, the debt is absorbed in the transaction as part of the sale. However, it is wrong to automatically presume you, the current business owner, will be free from all debt just because you sell your business.

 

There are two ways a transaction can be structured..... as a stock sale or as an asset sale.

 

A stock sale occurs when the buyer purchases the stock of the entity and assumes everything that the entity owns, including its assets and liabilities. Generally, when you structure a transaction as a stock sale, you are buying everything that entity owns – including any unknown liabilities.

 

In an asset sale, there is only a transfer of specific assets and liabilities from the buyer to the seller. You can basically pick and choose which assets and liabilities are included in that transfer.

 

The asset sale involves the transfer of title to certain assets and sometimes certain liabilities.

 

Options in how to handle debt at the closing.

 

1 - It could be paid at closing.

 

2 - It could be assumed by the buyer.

 

3 - You could negotiate with the creditor before the closing to see if they can reduce the amount.

 

4 - The simplest way would be to deduct the debt from the proceeds of the sale.

[SuperVillain]

They can apply for that court order as they have said - with that order when they next attend your property they can serve by posting through your letterbox and it would be deemed good service (ordinarily a bankruptcy petition has to be handed to you.

 

Unfortunately the definition of bankruptcy is an inability to pay your debts as they fall due. How much of the debt is still left to pay?

 

The bankruptcy petition won’t guarantee them immediate payment. Do you have other debts?