| T O P I C R E V I E W |
| lostit |
Posted - 13 July 2008 : 17:33:00
I may have to apply for bankruptcy - I have 8 years remaining on a shop lease - will the rent for this entire period be included in the bankruptcy process - or will I continue to be liable for the rent for the next 8 years. Obviously I will forfeit the lease because I cannot pay the rent - but it is the future that is worrying me.
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| 11 L A T E S T R E P L I E S (Newest First) |
| JulianDonnelly |
Posted - 14 July 2008 : 11:33:09
Hi Lostit and welcome to the forum.
Perhaps you should contact a specialist in these matters. Brett England of England, Jackman & Spacey does excellent work in this area, as does Paul Johns of Reviva. You can contact them through their weblinks on the experts page.
Regards
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
| melanie_giles |
Posted - 13 July 2008 : 23:54:57
There are various ways to crystallise the future rent liability into an IVA, and if this produces a better return for your landlord than in bankruptcy he may well be prepared to accept an offer.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
| lostit |
Posted - 13 July 2008 : 23:51:03
I have considered an IVA but I don't think it will solve the lease problem - if the manufacturing unit is not sold (and together with the unprofitable shop continues to drain our finances) I do not think we will be in a position to continue trading unless the future rent is included in the IVA process. My landlord is a solicitor - total rent for the next 8 years amounts to £240,000 which would far outweigh the remaining debt - I have no doubt that he would use this to oppose a voluntary arrangement. |
| melanie_giles |
Posted - 13 July 2008 : 23:32:14
You might also wish to consider whether an IVA would give you some breathing space and enable to you to restructure your business without reverting to bankruptcy proceedings.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
| lostit |
Posted - 13 July 2008 : 23:22:15
Thank you Melanie - I will have a look at it. |
| lostit |
Posted - 13 July 2008 : 23:20:07
Paul, my stock is all perishable and therefore does not carry any particular value. However, to explain my position a little more clearly, I have three shops - two of which are profitable and I also have a manufacturing unit. The unprofitable shop and manufacturing unit have bled the business dry. The business is a husband/wife partnership (not limited). Currently, our assets are about equal to our debts (one of the shops is freehold with some equity) and we are in the process of remortgaging our home in order to keep the business going. We are hoping to dispose of the factory unit (we have accepted an offer but the process is really slow) and if this goes ahead soon our business will move into trading profit again quite quickly - equally however, if the sale falls through we will be in serious financial difficulties within the next three months as our debts mount and assets diminish |
| melanie_giles |
Posted - 13 July 2008 : 23:13:28
The future rent liability will be included in the bankruptcy. My point was to demonstrate the extent of the liability in the bankruptcy.
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
| lostit |
Posted - 13 July 2008 : 23:10:08
But surely if the future rent liability is not included in the first bankruptcy proceeding, and after discharge you still cannot afford to pay, you will then be in a position where you might have to go bankrupt again and again for the future rent and (presumably) small business rates. |
| lostit |
Posted - 13 July 2008 : 23:07:25
quote:
Originally posted by melanie_giles
As Paul has indicated - you remain liable for the full value of the unexpired portion of the lease until the landlord either grants a surrender, or finds a new tenant and the lease is assigned.
Are there any break clauses in your particular agreement?
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com
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| melanie_giles |
Posted - 13 July 2008 : 22:39:25
As Paul has indicated - you remain liable for the full value of the unexpired portion of the lease until the landlord either grants a surrender, or finds a new tenant and the lease is assigned.
Are there any break clauses in your particular agreement?
For an informal chat about any financial difficulties, or advice as to the options available, I can be contacted via my website - www.melaniegiles.com |
| Reviva UK |
Posted - 13 July 2008 : 19:27:17
Hi there
in the event that you are still trading and are behind with your rent then the landlord may take various action to recover the rent. This could include seizing stock so really suggest you take professional help from people experienced in small businesses in difficlty.
secondly in the event that the shop is returned to the landlord ( eithe forcibly or voluntarily) then although the lease will say that you are due to pay the balance of the 8 years, in reality of the landlord actually re-leases the property then they would only pursue you for the shortfall & costs.
The official receiver doesn't take kindly to a landlord claiming all the lease payments due if the shop has been handed pack properly allowing him to release.
We recently had exactly the same position with a client where the landlord was pursuing 16,000 in leasepayments but the insolvency service only allowed 3,000 against the estate.
You may also want to look at the whole debt picture after you know what the exposure is re rent because Br is not the only solution.
What are your total debts , what type of business are you in and what value of stock do you have.
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
www.revivauk.com |
