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Original poster

My husband is thinking of bankruptcy

65 replies

ridingsolo · 27/06/2023 18:48

My husband owned a fairly successful restaurant but during covid and then afterwards it became less successful, he now has a huge amount of debt (upwards of £100,000) one of them being a government covid loan. He lost his business premises a month ago and spent £4000 on legal fees to see if his landlord unfairly took away the premises (he always paid his rent, but the law company says he doesn't have a leg to stand on) most of what he owes is to suppliers, HMRC, government loan and credit cards. We live in a rented property and I own my own house that I bought before I even met him, I have a mortgage that I am solely in charge of.
My husband has been talking a lot of bankruptcy and I'm terrified, we have a 9 month old baby, I'm 35 and he's 41, I feel we are too old to start again. He's also just found out from the doctor that he has arthritis, he struggles to get out of bed in the morning. I feel like I'm in a film where everything goes wrong only there is no happy ending, sometimes shit happens to people and it keeps happening right? Has anyone been through this bankruptcy process themselves, could it be the right thing for us?

OP posts:
NoHeavenNoMore · 27/06/2023 18:54

A previous partner of mine declared bankruptcy. As far as I can remember, they cannot leave you without a place to live. So your house doesn't come into it. Is that rented out?
If it were me in his situation, I'd definitely file for bankruptcy. He's never going to pay off the money that owes. With a bankruptcy, yes he will have to make monthly payments towards what he owed, rightly so. But it will be cleared after 6 years.
You mention not wanting to 'start again', but what does that look like for you? Were you thinking of moving?
What financial products do you share? Bank accounts, mortgages?

massiveclamps · 27/06/2023 18:55

Tell him to go and see an accountant, and go through absolutely everything with them. All the business accounts, and all your personal finances as well. Let them have a look through it all and advise. They probably wouldn't charge all that much, and could save money in the long run.

Crikeyalmighty · 27/06/2023 18:55

Is all the debt in a ltd company name OP ? or is he down for it purely as self employed- if he's got a big covid loan sounds like it's a company --I've liquidated a company before but none of the debt was down to us as individuals.

NoHeavenNoMore · 27/06/2023 18:56

The monthly payments cannot be more than he can afford. So why don't you have a look online for statement of affairs and get an idea of what that figure may be?
Contact StepChange, debt crisis charity. Do not go down the route of bankruptcy through a company who will charge or add to the debt

Original poster
ridingsolo · 27/06/2023 18:58

@NoHeavenNoMore we literally share nothing, no joint bank accounts, no mortgage, I even kept my surname and we double barrelled our babies.
We live in a rented property, I lived in my cottage went we met and rather than me sell it we agreed I'd rent it out and move into his rented two bed.
I have a car that's worth about 12,000 (owned out right) and I have a diamond engagement ring. Other than that I don't really have anything other than TVs, laptops and furniture. My husband owns a crap works van and car

OP posts:
NoHeavenNoMore · 27/06/2023 19:01

ridingsolo · 27/06/2023 18:58

@NoHeavenNoMore we literally share nothing, no joint bank accounts, no mortgage, I even kept my surname and we double barrelled our babies.
We live in a rented property, I lived in my cottage went we met and rather than me sell it we agreed I'd rent it out and move into his rented two bed.
I have a car that's worth about 12,000 (owned out right) and I have a diamond engagement ring. Other than that I don't really have anything other than TVs, laptops and furniture. My husband owns a crap works van and car

That's all great. Very wise.
There's no financial impact on you apart from what his monthly payments may be.
Do you think he's been completely honest about the amounts he owes?
I would strongly recommend StepChange, get him to talk through absolutely everything.

Original poster
ridingsolo · 27/06/2023 19:01

It is a limited company, he has personal debt too, like this most recent £4000 legal bill that I wasn't happy about at all. He really thought he had a case, I feel he is just flailing around. The covid loan is 50,000 and a lot of the rest is VAT owed to tax man. He is determined to pay his personal suppliers back (ie smaller businesses) but I don't know how we possibly could

OP posts:
WhenIsayyes · 27/06/2023 19:03

Stepchange 100%

TheCatterall · 27/06/2023 19:04

I went bankrupt in 2018. Rented house so no issue there. Was allowed to keep old car (so I could work), old Mac (so I could work..) and my household goods as I had no high value assets.

speak to stepchange direct or citizens advice about bankruptcy.

I just wish I’d done it sooner.

my credit rating is now middle of the road rather than bottom of the well. It was life changing once I got informed and past the fear and stigma.

as for age - I’m 48 now. So 43 when I did it. My world didn’t end.

Hawkins0001 · 27/06/2023 19:04

Reading and all the best op

Original poster
ridingsolo · 27/06/2023 19:07

@TheCatterall would they take my car? It's not extremely fancy but it's worth around 12,000 I'm wondering if I should move back in with my parents while it gets sorted, also wonder if we should get divorced on paper

OP posts:
Original poster
ridingsolo · 27/06/2023 19:08

I'm not working at the moment because of the baby, I sold my own business before I had her. So I can't say I use my car for work.

OP posts:
Lamelie · 27/06/2023 19:10

Step change or CAP

Flowers
Original poster
ridingsolo · 27/06/2023 19:13

I'm finding it difficult to see the benefits of bankruptcy, they take over your accounts and make you pay back your loans over 6 years?

OP posts:
Crikeyalmighty · 27/06/2023 19:14

@ridingsolo pretty easy to liquidate a ltd company - and you won't owe anything from that- please tell him not to pay small suppliers - it can be seen as making preferential payment rather than HMRC etc- it is possible to do it all without an advisor - although it does feel a really unpleasant job - once it's done though , it's done- they can't take your house, your car- anything- unless they suspect foul play - and that's usually at higher levels than this. Lots of info about this online.

On debts a personal level only you can decide but if they are under a certain level it may be better to set up a payment plan if you can- as others have said something like stepchange will advise you- the reason being it can be hard to rent again if you have a bankruptcy on your credit record - which isn't a problem whilst you have a tenancy but might be if you need to move.

Original poster
ridingsolo · 27/06/2023 19:19

I don't particularly want him to pay back the suppliers I feel he's trying to do the right thing by them but in the process we are going to fall deeper and deeper, he has £300 in his bank just now, today I was visited by debt collectors in my home, I'm used to it now though, it's embarrassing

OP posts:
ApocalypseNowt · 27/06/2023 19:19

I'd recommend talking to Business Debtline rather than Stepchange as they specialise in, and can deal with, self employed people (they can also advise on personal debt alongside the business stuff)

Doveyouknow · 27/06/2023 19:21

I think you need some advice from step change or an insolvency specialist. You need to be clear what debts relate to the company (which is presumably a ltd company) and what debts is he personally liable for. Depending on the size of his personal debts bankruptcy might not be the best option. I would also want to be clear what bankruptcy might mean for any joint assets you hold.

TheCatterall · 27/06/2023 19:22

@ridingsolo we can’t say what they would take or do.

it’s no good asking on here when it’s business debtline and stepchange etc you need to talk to. We can only base it on our experiences which won’t be exact same as yours.

personal bankruptcy wipes the debts. You don’t pay them back.

I think you are also getting the various insolvencies confused. Please speak to the actual advice things and make sure you are with him and involved so you both know what’s going on.

Crikeyalmighty · 27/06/2023 19:22

@ridingsolo I've been there lovely- it's horrible- file on the limited company stuff asap- it stops it all very quickly

On the personal level get an application in for UC asap if you aren't earning and get a call in to step change- taking positive action stops all the doorstep shit

CatherinedeBourgh · 27/06/2023 19:25

You need to separate what are his personal debts from what are the ltd company's debts. If you liquidate the ltd company all the debts which are the company's go away (as do all the assets it has, if any). The personal debts do not.

hettiethehare · 27/06/2023 19:27

I'm sorry OP - it sounds horrifically stressful for your and your family. I'd second getting insolvency advice and also the debt boards on the moneysavingexpert forum are really helpful, both for support and advice.

CornishTiger · 27/06/2023 19:28

It really isn’t the big scary thing you think it is.

He may pay an amount over to the official receiver for 12 mths depending on his statement of affairs. It will stay on his record for 6 years.

As you have no financial connections then you will be mostly unaffected. Just make sure you are paying the council tax bill and he hasn’t forgotten to pay that!

Original poster
ridingsolo · 27/06/2023 19:29

Would the legal bills count as personal? I'm a bit annoyed about them as I told him to move on from that, instead he went to a very famous firm and they charged him £4000 to basically tell him he didn't have a case

OP posts:
Original poster
ridingsolo · 27/06/2023 19:30

CornishTiger · 27/06/2023 19:28

It really isn’t the big scary thing you think it is.

He may pay an amount over to the official receiver for 12 mths depending on his statement of affairs. It will stay on his record for 6 years.

As you have no financial connections then you will be mostly unaffected. Just make sure you are paying the council tax bill and he hasn’t forgotten to pay that!

Why is the council tax bill so important, we are late paying that too

OP posts: