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Narked_Off
Starting Member
2 Posts |
 Posted - 19 December 2008 : 15:00:12
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Hi All,
Just wondered if I could pick your brains ?
Situation is that I'm considering petitioning for bankruptcy for my personal debts and my sole source of income is working as part of a partnership with my fiance, the business has no debt and very limited stock as we only stock/sell what's already been ordered and paid for in advance by customers.
So wondering what would be the implications of the bankruptcy on the partnership I sort advice and got 2 conflicting pieces of information.
First off Business Debt Line (BDL) advised at worst the joint bank account we have may be frozen as it's part in my name, but we could ask the OR and/or bank not too as the account has no debt, overdraft, etc. and is only used to take payments and pay bills, etc. At worst it could mean us needing to open a new bank account solely in my fiance's name for the business to continue.
But ...
Secondly speaking to Insolvency.gov.uk (IGU) they advise that the business would need to be closed down as a result of the bankruptcy no matter what, even though after I became bankrupt I could simply start the business again with no problems except a lot of paper work as a result of closing and re-opening the business.
Then calling back and speaking to either place again they both adamantly stress they are correct and the other party is incorrect .... so I'm a bit ?!?!?!?!?!
Anyone know which one is correct ?
Alterntaives that we could do in advance of the bankruptcy would be to move both the business bank account and the business name into my partners name which would take around a week according to the bank and our accountant, and doing this as a safeguard for my only source of income I'm not sure what the OR would think if we did it and I declared it in the SoA form especially as at that point I wouldn't own a business only be working for a business ?
Hopefully that makes sense and any advise/insight would be gratefully received.
I'd also like to take the opportunity to thank skippy and piggy bankruptcy for their blogs and for de-mystifying some of the rumours surrounding bankruptcy and allaying some of my fears about bankruptcy.
Plus has anyone got any experience of dealing with the OR or OR's in Cardiff ?
Thanks in advance ! |
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John
New Member
United Kingdom
73 Posts |
Posted - 19 December 2008 : 16:47:26
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Hi
the Insolvency site is correct.
The partnership would need to be dissolved on your declaration of bankruptcy. Removing yourself from the business account is not sufficient, you will still be a partner until dissolution.
If and when you are declared bankrupt all lenders will check their record to see if you hold, or have held until recently, an account.
If you do not declare that you were recently a partner (within the 2 years prior to petition) then technically that's perjury.
www.Bankruptcyhelp.org.uk
0800 078 9367 |
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Narked_Off
Starting Member
2 Posts |
Posted - 19 December 2008 : 17:54:56
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Thanks for the info' and speaking to the insolvency people again about something else I thought I'd ask again and they changed their view, hmm, basically it is down to the OR's discretion, but if the partnership is my only source of income and I can prove it is profitable with no debts or credit lines then there should be no reason to close the business down as it itself is not part of my debt problem and hence bankruptcy, so in line with Business Debt Lines opinion.
So I'm doubly confused, but basically the guy from insolvency.gov.uk said why would the OR stop you earning money if the partnership is your only source of income that could be used for an IPA ? |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 19 December 2008 : 20:43:13
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Hi
if the business is a Ltd company or a partnership then absolutely the company has to be closed down.
The Insolvency.gov team are absolutely correct ( bear in mind that they are the insolvency service and goverment body and what they say goes)
I would recommend closing the partnership down - bank account trading name etc etc etc and either start again in your partners name ( if she is not petitioning) as a sole trader or a Ltd company with you as an employee.
The key things are that if you are attached to the business and Br then you will not get a business bank account and that could be a problem.
Secondly you have to consider if the business has a value as theoretically this is an asset and would form part of your estate.
Thirdly as a bankrupt if you take advance payments or deposits for goods you are obligated to advise them that you are Br - this will not be helpful so you will need to consider the best way to work with this. If the trading business ( and therefore liability) is in your partners name you would not need to advise folk.
I would really suggest you get everything in order before you petition rather than afterwards. Ducks in a row!
The OR team in Cardiff are really friendly and helpful and really appreciate cases where EVERYTHING is fully prepared for them ( as do most OR's)
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
Real People ..... Real Debt Solutions
www.revivauk.com |
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Bankruptcy & Partnership query ?
