can anybody help i am about to enter into an iva but i am worried that i may not be able to meet the monthly payments so i am looking alternativly at bankruptcy but i am self employed and i am worried about my lease on my shop will the landlord take the lease if he knows that i am going bankrupt the shop employs 3 staff it does not make loads of money but it keeps us all in a job my shop is not in any debt its just personal debt of 90k all unsecured i want to pay back the creditors as much as i can this would this count as an asset or would it be the tools of the trade i am a sole trader the debt is between me and my partner we are both employed at the shop is my 10 lease at risk or my staff can i still pay back monthly payments even though i am bankrupt
in bankruptcy you can still trade in business ( NOT as a limited company) but there are a number of hurdles to go through. These are not impossible to manage but you cannot do this by yourself because of the complexity of the case.
For example the landlord probably wouldn't mind the situation provided that he gets the rent paid and that there are no arrears.
However the official receiver would undoubtedly think that there was a value to the lease ( even though in these times there may be none) and would visit the location and close the business down probably the day you go bankrupt.
Therefore my suggestion would be to discuss the matter directly with a specialist in commercial insolvency AND individual bankruptcy procedures.
there are a couple of specialists on the forum including myself.
Paul Johns Assisted Bankruptcy Specialists Reviva UK www.revivauk.com
Firstly hold fire on the IVA and contact an expert to obtain a balanced view with regard to you and your partners position and asperations
There is a question as to whether an IVA would be the right option, and if it is then you really need to be comfortable that payments will be affordable and sustainable.
You say you are a sole trader therefore the business and you are seen as one, this would mean that all assetts become property of the OR on your declaring Bankruptcy.
As Paul says your business would cease to trade and your staff will be dissmissed. You lease would then pass over to the OR to see if there is any value. Also your stock would have a value therefore the OR may look to trade the business to sell the stock.
As far as the OR is concerned, he has to look at what is going to give the best return to the creditors, therefore if you can identify that by trading the business, paying the staff, lease to the shop as well as selling the stock via trading will give a better return to the creditors then trading may be allowed to continue.
The case is fairly complex so as Paul suggested I seek advice before you do anything else.
help
Posted - 16 March 2008 : 23:35:30
