Dh's business is insolvent. I'm panicking.

[Malrhia]

I am an employee- a proper one, I do the marketing and most of the design. So I am about to lose my job as well. He employs 15 people so redundancy costs will be high - they've all been there for years. It's not dhs fault, he's lost contract after contract to overseas suppliers despite doing everything he can to keep it going. He said a few weeks ago he was feeling suicidal over it all so of course his mental health is our priority. I'm 58 and jobs are hard to come by where we are (rural northern England). He's owed nearly 200k from suppliers who keep saying they are about to pay but don't. If they did we'd still have to close but at least we could do it properly. He's spoken to his accountants today who agree the only solution is to declare insolvency.

I'm really fucking worried about the financial side of things but more than that dh says he will be traumatised and 'destroyed' with shame when it closes. His dad started the business and it was successful for a time. Don't know why I'm.posting really I can't talk to anyone in rl about it. We don't owe the bank any money I guess that's something.

OP I really feel for you both.
Have you contacted any membership associations that you are part of? They may be able to offer some free advice.
Good luck.

@Malrhia yes it is very helpful - all my friends are talking about their impending retirement and I feel like I'm living in a parallel universe. I will have to work till I drop as we have no home.

I know exactly what you mean. I'm seeing friends booking holidays and living seemingly carefree lives and it feels odd. I've really dissociated.

Mind you, dh hasn't been able to take a holiday for the past 6 years anyway.

Hi @Malrhia sorry that you’re going through this. I worked for a couple of small family businesses in my career in HR and it’s awful when things are not working out, I recall the boss of one when the business was on the verge of collapse selling his car so that we could cover the payroll the last month.

On a practical note does the company have employers insurance? There will be a helpline and online resources through that (an Employee Assistance Programme) that your husband and employees can access counselling and advice about all sorts of issues. They are normally really good and can signpost other services too.

I'm not sure. The company is very well organised generally and up to date with everything as we have to be to bid for contracts, but I'll check later.

I've got teens doing exams as well so having to be strong for them. Spent the morning looking for jobs- nothing out there, all marketing jobs are for young people! I wonder if I'd be eligible for jobseekers.

I meant you market the property and then upon exchange and completion of the property you wind the actual business up with the cash from the sale of the property available to pay staff and other debts thus exiting on a solvent basis.

This is usually the most cost effective way as you aren't then paying for administrator/receiver/liquidator, unless of course there is too much debt exceeding the value of the property.

I have suggested this to dh but he's reluctant to do it. Thisnwas my first thought.

Its a real shame if the property is held by the same company as the operating company as its value is counted in liquidation.
But if it is, as the PP says it might go some way to cover costs. The point of a limited company though is that once the company has been wound up and all its funds exhausted, thats it, liability is limited to the company.

Sorry you are loosing out to China OP, what sector are you in?

I hope they do - it's called karma.

Don't worry. As a limited company, staff will receive statuary redundancy from the government, usually 6 to 8 weeks after closing. They will also get any back holiday pay and if they have not been given notice, will also get pay instead of notice. As employees, both you and your husband will be eligible for this. The gov claim the payments back after the assets have been sold, if there is anything. The amount anyone gets depends on length of service. As long as you have no charges from the business on your house, or personal guarantees, then they will be protected too. The insolvency practitioner will explain how it works. We went through this 5 years ago, and although it was worrying, we survived, all our staff got new jobs and we didn't lose our house.

Your dh should be proud, he’s employed 15 people and yes this must feel horrible but he has still done very, very well all in all.

This will pass. You will be fine.

Hi OP, have you considered looking at invoice finance.. if the issue is slow paying debtors. Have a look online but it’s essentially getting a % of invoices up front with the balance less fees paid when the debtor pays.

My DHs business went voluntary insolvent last year. It was pretty horrible in terms of our own guilt etc but it was our only option. Employees- including yourself and potentially your DH- will be able to apply for redundancy payments from the insolvency service- it won’t be as good as a company redundancy package but it is something. Going insolvent does cost a few thousand- I believe it varies on the size of your company and the work involved for whichever insolvency practitioner you choose. We are just over a year through the process now. After the initial hiring of a firm and giving them all the info they require there hasn’t been much more involvement from us. My DH is a lot happier now too.

Good idea but may not work if the clients are non UK

Op ignore the tears who seemingly know nothing about business, debt collecting, or being a decent human being.

i really feel for you, it must be awful, but you will be ok

Twats, not tears

Hope something equally shite happens to you and hope you get the same comments.

I know you're both scared, and tired and sad 😔. I've been a slightly similar position and I got through it with the help if the Money Saving Expert chatboards. I know its not always good form to direct to another site, but those guys literally saved my life when I had no where and no one to turn to.

I also learned loads and am much more confident dealing with creditors.

As a side note a close friend went bankrupt some years ago and although their life was difficult for a while, only close friends knew.

No advice but just support. My husband got made redundant last month at very short notice-the company he worked for had a similar position to your husbands in that if the people who owed them money just paid they may have been able to salvage things, but to no avail. I’ve seen the impact it has had on my husbands MH so I can only imagine what your husband is going through. There is no shame in this situation. It’s a rough environment right now. Really hope you guys are going to be ok.

I don't think this will help, if the accountants are also recommending insolvency. It sounds like it's profitability as well as cash flow.

@Malrhia I hope you feel better after the supportive and helpful comments. And please ignore the not so helpful (and frankly spiteful) comments. I've been in finance for many years, and seen many clients go through what you're going through. And, yes, I know it's hard, but you're in the thick of it right now. You have the protection of limited company status, you own you're own home, and you'll get some payout for redundancy from the government even if there's nothing left. So you've done as much as you can to protect yourself.

You will move on from this though. Many do, and you've clearly got some strength there.

So sorry to hear how difficult this is for you OP. There really hasn’t been a more challenging environment to run a business than the present. It’s such a tough and demanding job but that is what will make him so valuable as an employee going forward. If he can get through this and realise how experienced and resilient he is, he may discover a better life on the other side. You, too, will have gained so much valuable experience from understanding the business owners’ perspective which you will take to your next role. Focus on the positives. Your home is not at risk. You have enough savings to manage for a reasonable length of time. The workplace is much more flexible than pre-covid. You sound as if you both have your health. You have kids who will soon be adults. You are not alone. There is no shame. It will get easier once he has handed responsibility to the insolvency professional and told the staff. That will be playing on his mind. Let him rehearse with you what he plans to say. Give him time and space to grieve for what he has lost. More than ever you and the kids need to value him and treat him with respect. Look after yourself and get yourself the support you need. Remember that this could happen to any business at any time and will happen to many more, sadly. 2nd generation businesses are particularly tricky to run as you have the expectations of the founders/ family to contend with and that can often limit the freedom you have to pivot or change the business. He is lucky to have you. Very few highly successful entrepreneurs have not experienced business failure at some point.

It’s really not as simple as that. We own a Ltd company with overseas clients - if they don’t want to stick to their terms there’s little you can do about it short term. Cash flow then can become a prob

The above was a reply to the person who said op was being blasé. It posted here for some reason

@Malrhia
Realise this is an old thread but can I ask how things are now? Or can I PM?

I have no words of wisdom. Just want to wish you best of luck in the future. A horrible situation for you and your staff.