My husband is thinking of bankruptcy

[ridingsolo]

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?

It’s not a stupid suggestion, it will ringfence the settlement against the bankruptcy and any subsequent proceedings by the liquidators of his business or any successors in title to their cause of action may have.

You can marry him again later when the dust has settled.

This could be far too serious to get all romantic about.

This, please do this.

there should be a letter of engagement with the law firm which either names him as the client or names the company as the client. That will tell you who holds the liability.

Is his business a limited company? If so, he needs to speak to a liquidator about winding the company up

If he is self employed, then get him to contact Step Change before he does anything else

@ridingsolo just wanted to say if you haven't already, try and get advice from different lawyers. My DHs business went bust and he was advised to go bankrupt and was told the house would be secure blah blah blah. They actually went after EVERYTHING. FIL had to step in to save the house otherwise they would have taken it.
Funnily enough the bills (+their fees) that they were trying to recover came to the same amount as what they valued the house at. (At first the bill was lower, but once they valued the house the put more of their fees on top)
It was a dreadful time and if it were now would not actually follow the same advice.
However, ours were not government, they were local authority loans.
I wish you so much luck 🍀

1. See an insolvency practitioner. For something so life-impacting, you need a professional to guide you through

1. Non payment of council tax does not result in a CCJ (PP said it did)

1. You are not too old for a 'round 2' in anyway shape or form. Plenty of people have gone bankrupt and turned it around into being successful again.

1. Covid fucked a lot of things up for a lot of people. It is not a reflection on you or your husband. I know it's hard and stressful but don't let it fuck up your marriage too.

Good luck

It certainly sounds as if the legal advice was very much related to the business so should be a contract and payment from the business and therefore would be written off in the case of insolvency

If you haven't been invoiced for the legal fees, get the invoice made out to the company to ensure that they aren't being added unnecessarily to personal debts. After all, the advice was about the company situation.

Whilst I agree with this in principle, it is unlikely to be the DH's choice - the law firm should have an engagement letter naming the client and this will be who gets the invoice.

In this situation, I would definitely declare bankruptcy - it will be hard, his credit score will be shot - BUT, after some time it will get better.
My ex declared bankruptcy 12 years ago and now he's managed to get mortgage so there is some hope.
He's just got to be prepared to be striped of his bank accounts, I think it is quite hard to open a bank account when declared bankrupt.
He (and you) may feel immense relief knowing that the money won't need to be paid back.
I would go through it all but I know in this situation I would do it.

I wouldn’t “definitely” do anything without advice.

I would also factor in that they are renting. Unless it's social housing then that can be insecure and they may need to move. Bankruptcy on your file can make that difficult . The business debts aren't the issue in most cases- the personal ones are the ones where you have to work out what's best for you and for going forward

totally agree @Crikeyalmighty

Presumably though if OP owns a property and for whatever reason she and her husband were unable to stay in their rented home, she could give her tenant notice so has a fall-back position.

Depends on the tenancy - if it is a fixed term 12 month, say, could be a while until it is free