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Original poster

Thinking of bankruptcy

32 replies

Thinkingofbankruptcy · 26/08/2023 02:25

Changed name for this.

Awake again at 2.24 AM with worry.

I lost a business after covid, and long story short I’ve just lost a court case in relation to that and as a result I’m in more debt than I can possibly ever repay. £400k.

I've had advice and there’s no other route at my age. 55.

I can continue to earn a reasonable living and pay rent etc.. but I’ve only got one way out.

Need hugs, and to hear from anyone that’s been through it.

I’ve got a gut feeling it actually isn’t going to be as bad as it feels right now, and after a year I’ll be relieved it’s over..

OP posts:
DramaAlpaca · 26/08/2023 02:46

No advice, but I can offer a <hug>

You've been through a lot, and if bankruptcy is the right way to go, then do it. I'm just a bit older than you and understand the need for financial security. I can only imagine the stress you've been under but I'm sure that while it feels utterly shit now, in a year's time you'll be glad to have got rid of the debt.

Just make absolutely certain you've thought it all through first, all the implications, and that the advice you've been given is correct - but it sounds like you're sure you're doing the right thing.

Wishing you all the best and worry free nights ahead.

Original poster
Thinkingofbankruptcy · 26/08/2023 02:52

DramaAlpaca · 26/08/2023 02:46

No advice, but I can offer a <hug>

You've been through a lot, and if bankruptcy is the right way to go, then do it. I'm just a bit older than you and understand the need for financial security. I can only imagine the stress you've been under but I'm sure that while it feels utterly shit now, in a year's time you'll be glad to have got rid of the debt.

Just make absolutely certain you've thought it all through first, all the implications, and that the advice you've been given is correct - but it sounds like you're sure you're doing the right thing.

Wishing you all the best and worry free nights ahead.

Thank you. The maths is simple, I’ve lost the court case, and it’s north of £400k, plus it’s increasing at 14% per annum under the court

I’ve got £140k cash at hand and I’m renting and I have a new small business that’s doing ok.

I’ll lose the cash at hand but I’ll keep the new business.

will be a problem if I want to rent something else in the future.

hugs appreciated

OP posts:
TeenagersAngst · 26/08/2023 12:15

Have you sought professional debt advice?

TeenagersAngst · 26/08/2023 12:16

Sorry, just saw you mentioned seeking advice. Who was that from?

caringcarer · 26/08/2023 12:22

Thinkingofbankruptcy · 26/08/2023 02:52

Thank you. The maths is simple, I’ve lost the court case, and it’s north of £400k, plus it’s increasing at 14% per annum under the court

I’ve got £140k cash at hand and I’m renting and I have a new small business that’s doing ok.

I’ll lose the cash at hand but I’ll keep the new business.

will be a problem if I want to rent something else in the future.

hugs appreciated

Show quote history

OP are you sure you can still run your business? I thought you can't be a company director if bankrupt unless all debts are repaid. Could you get a repayment plan? Also any business assets you have equipment etc would have to be sold as you can't keep any assets if bankrupt. I think you need to seek specialist debt advice from a debt organisation. Also it will depend on your age if you are old going bankrupt won't be so bad but if young it will affect your credit for years to come. My exh went bankrupt and couldn't get a mortgage 15 years later.

BarbaraofSeville · 26/08/2023 12:36

Worry about future restrictions re mortgage and renting are not a reason to avoid bankruptcy when the debt is so large and likely not able to repay.

Although OP, is there any scope to offer partial settlements? Has that been explored? If you started by offering a 25/30% full and final settlement, making it clear that they're likely to get less if you went bankrupt, especially if there's tax debts or other priority creditors involved, then it gives you a bit of scope to negotiate if your creditors said no.

If you can't do that, I agree that you should go bankrupt and start rebuilding your finances. You'll have an income payment order, which again you might be able to use your £140k to offer a 'clean break' especially if your income from your new business is only just covering your household expenses (make sure you read advice about putting together a sustainable budget, as you'll have to live without credit for 6 years so you need it to cover emergencies and fluctuations in day to day expenses).

Also build up a little resilience eg by making sure your gas and electricity accounts are up to date (I think you're allowed to continue with a normal DD arrangement and this should be in credit at this time of year, so increase the DD if not), buy extra non perishable food etc.

Have a look at the specialist MSE forum for bankruptcy:

Bankruptcy & living with it — MoneySavingExpert Forum

Bankruptcy & living with it

To help people who are bankrupt rehabilitate their finances, without judgment.

https://forums.moneysavingexpert.com/categories/bankruptcy-living-with-it

Original poster
Thinkingofbankruptcy · 26/08/2023 14:07

caringcarer · 26/08/2023 12:22

OP are you sure you can still run your business? I thought you can't be a company director if bankrupt unless all debts are repaid. Could you get a repayment plan? Also any business assets you have equipment etc would have to be sold as you can't keep any assets if bankrupt. I think you need to seek specialist debt advice from a debt organisation. Also it will depend on your age if you are old going bankrupt won't be so bad but if young it will affect your credit for years to come. My exh went bankrupt and couldn't get a mortgage 15 years later.

Show quote history

I’ve had advice and the business doesn’t have any assets.

correct I can’t be a director of it, but someone else could be and I could work for them in it on a salary.

that would be allowed because it’s where I get my income from.

i think I’m probably ok on that.

OP posts:
Exasperatednow · 26/08/2023 14:09

Do you have someone who could be a director/run the business?

Original poster
Thinkingofbankruptcy · 26/08/2023 15:23

Yes DP would run it and be a director. I’d work for it PAYE

OP posts:
caringcarer · 26/08/2023 21:49

Thinkingofbankruptcy · 26/08/2023 15:23

Yes DP would run it and be a director. I’d work for it PAYE

A business must have a minimum of 2 directors.

TheSecretHistoryOfGoldfinchTartt · 26/08/2023 21:59

caringcarer · 26/08/2023 21:49

A business must have a minimum of 2 directors.

Show quote history

Not true unless a plc which the OP’s company will not be

Original poster
Thinkingofbankruptcy · 26/08/2023 22:04

caringcarer · 26/08/2023 21:49

A business must have a minimum of 2 directors.

Show quote history

No. 1 is fine. They can also be the co secretary.

that’s what it is now

OP posts:
DawnThoughts · 26/08/2023 22:04

Oh OP no advice but definitely a big hug! You've clearly been through an enormously stressful time and things have gone against you. Taking as much professional advice as you are able ahead of a big decision like this is the way to go. Golly. Hope things turn around for you from now x

<hugs>

Original poster
Thinkingofbankruptcy · 26/08/2023 22:04

TheSecretHistoryOfGoldfinchTartt · 26/08/2023 21:59

Not true unless a plc which the OP’s company will not be

Show quote history

Not yet but we live in hope!

OP posts:
TheSecretHistoryOfGoldfinchTartt · 26/08/2023 22:11

I hope one day you get there

Original poster
Thinkingofbankruptcy · 26/08/2023 22:19

It’s funny actually once you’ve reconciled it you can plan beyond it.

and that’s positive planning as opposed to planning for a decade of souls less work to pay off debt.

it’s a whole different mindset.

probably more people should do it.

anyway thanks to all of you for your kind words.

im a man by the way, but I still needed the hugs!

OP posts:
BingoBastards · 26/08/2023 22:20

Just wishing you the best as money stress is awful

Original poster
Thinkingofbankruptcy · 27/08/2023 05:55

BingoBastards · 26/08/2023 22:20

Just wishing you the best as money stress is awful

Well the thing is this, I don’t have any money to worry about. All I have is debt. If that went away then going forward would be a whole load easier.

I’ve been in this position before. After the 2008 banking crisis I should have gone but I didn’t make the move and instead I slogged through it. If I’d gone over then I’d be miles ahead now. But if I’d done that my son would have ended up in social housing near a school with stabbings.

OP posts:
BingoBastards · 27/08/2023 08:18

You really need some specialist advice - my situation is different as I'm low earner low debt at present and am very much hoping to get out of it within a year. I may have to rent in social housing but I have an escape route as I'm slightly academic.

A friend of mine is high wealth but was worried about stabbings with her children despite living in an affluent area, homeowner, absolute back up from millionaire family if anything ever went wrong. I didn't quite understand why she was so worried about stabbings tbh but I guess young children

Have you asked on MSE as a starting point? It sounds like you're deciding which way to jump on this

IAmAVintedAddict · 27/08/2023 08:43

You lost any sympathy I had with this

"But if I’d done that my son would have ended up in social housing"

The irony of going bankrupt owing close to half a million because you don't want to live in social housing...

IAmAVintedAddict · 27/08/2023 08:48

There are stabbings in all areas, unfortunately. Our nearest city centre has a high proportion and they are usually connected to involvement of drugs and not limited to social housing dwellers. I'm not denying the effect of demographics. It's the just the sympathy given to someone going bankrupt owing this much money and then displaying unpleasant snobbery, doesn't sit well with me, especially if smaller suppliers or clients lose out.

Ariela · 27/08/2023 09:19

Definitely use your £140k to offer settlement. I helped a friend with a business she had to close, she owed 100k, got to agreed settlement of £45k
(I suggested she started by offering 30k, friend said but they won't accept that they want £100k, I said no it's a start, but their actual loss is likely to be about 40-45k so start at 30 and negotiate. )

Richmondgal · 27/08/2023 09:30

BingoBastards · 27/08/2023 08:18

You really need some specialist advice - my situation is different as I'm low earner low debt at present and am very much hoping to get out of it within a year. I may have to rent in social housing but I have an escape route as I'm slightly academic.

A friend of mine is high wealth but was worried about stabbings with her children despite living in an affluent area, homeowner, absolute back up from millionaire family if anything ever went wrong. I didn't quite understand why she was so worried about stabbings tbh but I guess young children

Have you asked on MSE as a starting point? It sounds like you're deciding which way to jump on this

What on earth has this to do with op post

BingoBastards · 27/08/2023 09:35

Richmondgal · 27/08/2023 09:30

What on earth has this to do with op post

Show quote history

Oh - I was just trying to give different examples of current financial situations and say that her situation was different so she'd need more aligned advice.

I didn't mean any harm by it.