Advice for man in severe difficulties

[Conundrum10]

Hello. I am a regular female poster but have name changed in case the details of this post are outing.

I am very concerned about the situation a family friend is in, I have offered to ask for advice here as there are so many knowledgeable people, apologies if it’s a little long but I would really appreciate any advice.

This friend is a 60 year old man, he has had a limited company for over 30 years (one man thing, nothing major) doing a very specific job (no formal qualifications). He is not married, no children but unfortunately he has not managed his finances properly and made some very unwise decisions in the past.

In short, his company is now insolvent, there is almost no work coming in, he doesn’t have a pension (another stupid decision, he cashed it in to settle debts!). He had been renting for over a decade after a breakup (the partner took the house they had both contributed to). He was no longer able to pay rent so was evicted.
He moved into his mother’s house (late 80s at the time). She passed away a couple a months ago, apparently his late dad had taken an equity release mortgage on the house, so now that his mum is gone the house needs to go.

He has nowhere to live, no money coming in and at 60 it will be difficult to find a job.
what options of help are there for people in his situation? Which charities could he approach? His limited company also owes around £30k in debts to top it all!

I feel he’s lost and desperately needs advice. He doesn’t have anyone with enough money to pay his debts or house him. Thank you!

Op citizens advice bureau and local council for housing??? The citizens advice should be able to point him in the right direction regards the debt

He’ll be entitled to social housing, so he needs to apply to his local council taking evidence that he’ll soon be homeless. When he reaches state pension age he’ll be entitled to that, and/or pension credit.

If the company is insolvent it can be wound up and if he’s personally liable for any debts he can declare bankruptcy.

I'd start with the CAB. In theory he can apply for UC/council housing etc on his own, but with so much going on the CAB will be able to make a plan with him and let him know exactly what he's entitled to. Unfortunately his life won't be 'comfortable' but he'll be entitled to enough to live on - there will be expectations he finds work for the next few years I would've thought, but they can walk him through what those expectations look like.

Declare bankruptcy of the company. He isn't liable for the debts so get them written off.
Surely there will be some equity in the house that will be his? Sell up, use what's left to purchase a smaller property outright.
There are jobs out there for 60 year olds, local b&q, dobbies etc always seem to hire older staff. maybe sign on to an agency for work as well.

Business Debtline might be able to help (it's the part of national debtline charity that helps with business debt).
Entitled To website to see if he's entitled to any benefits.

Housing - he can apply for over 55 social housing, it's usually a quicker process than family housing. My dad got offered a flat within a month or so. Citizen's advice and step change for benefits/debt advice.

He’s under pension age so would sign on and be helped to find work. In some areas there is a shortage of applicants for retail and hospitality jobs and hopefully he will find something.

Stop the flow of money into the failing business immediately.
Look into liquidating the company. This will mean any unsecured debts are written off.
Study the terms of the equity release on the house. Have it valued by an estate agent. See if there is any remaining capital after equity release debts are settled. Tackle this as a matter of urgency as, depending on the type of product, there may well be mounting interest payments accruing and further depleting capital.

Investigate older person housing options in his local area - there is often social housing set aside, and in some cases local charities providing housing. If this is not an option look into renting a room in a HMO with older residents.

Do a benefit check for Universal credit and council tax discounts.

Also advice line for AgeUk
0800 678 1602
They also have free face to face sessions for advice on benefits, housing and many other issues.
https://www.ageuk.org.uk/information-advice/

Thank you so much everyone! I will pass on this info to him. I’m not sure he can find work in hospitality or anywhere at 60 with no relevant experience.

The house has been valued,etc there is only around £10k equity in it, not much at all considering his circumstances. Will he be able to use this for living? I am guessing that if he closes the company and declares himself bankrupt the liquidators will be able to take that money to settle company debts?

thank you again.

He must not declare himself bankrupt. Liquidating a company is not personal bankruptcy.

A limited company is a separate legal entity. The debts are limited to the assets of the company, not the individual.
The finances of the two are completely separate in a legal sense (are you sure it's a limited company and not a sole trader enterprise?).
Any personal property, savings or inheritance are not company assets, and cannot be seized for its debts. A limited company protects the liability of its directors and shareholders.

It's rather strange if he doesn't understand this as it is one of the main benefits of using this type of arrangement to set up a company. (Unless he has taken out personal debt in his own name to keep the company afloat - this he would have to repay).

Please encourage him to take proper advice, from Business Debtline or similar.

Some information in previous posts about the Ltd Company debts simply being 'written off' may not be entirely correct, depending on who the money's owed to.

If it's was a bank then it's highly unlikely lending of £30k would have been provided to a small Ltd Company without a supporting personal guarantee - and if he gave one then this would mean that yes, he's personally liable for that balance. IF that's the case, it's very important than he doesn't enter any form of personal insolvency (bankruptcy/IVA etc) until the debts have been crystalised (liability formally passed to him) otherwise they might be excluded from any personal bankruptcy/IVA.

Thank you for this. He didn’t tell us (my DH and I) who the company owes money to, so this seems to be a critical piece of info.
I will definitely pass on this advice to him. Clearly the situation is not straight forward so he needs specialist advice.so very worrying for him!

What area of the country is he in? There are some where demand for over 55s SH doesn't much outstrip supply. If he's in London, will be much harder obviously.

I wouldn't assume he won't find work anywhere at 60 with no relevant experience either. He can't be choosy, but some sectors such as care and hospitality are in no position to be fussy.