Been a while since been on here. I have been batling for the last year to try and avoid BR. Mainataining minimum payments, unfortunately increasing debt due to living and slow down in work. One of my main worries is that it would appear my only option is to continue trading in my current self employment capacity post BR. I can just about survive on the income generated from the business once the debt level is removed. However I am concerned about the fact that you need to disclose the fact that you are BR. Is this only in relation to supplies or services supplied to me. i.e. I don't need to tell my customers that I am BR. The reason I aks is that I have various business acquaintances that I do work with and I don't really want to inform them what has happened.
I am in a Franchise and this will dictate the need for me to change my company trading name. I am a sole trader.
Should I set up the new company before or after BR.
In addition to this should I open up a bank account for the new company obviously with no Credit Facility with it? Or will the OR just close that down anyway.
One of the most important things you need to do BEFORE looking at bankruptcy is to check in minute detail you franchise agreement.
I have often come across franchise businesses during my involvement in bankruptcy/debt solutions and the majority of them have a clause hidden in the small print with regard to bankruptcy which unfortunately will 'cancel' any agreement if the fanchisee is subject to a bankruptcy order.
You must establish this before you make any decision as it is going to affect your ability to carry on business.
Melanie Nicholas 28 years insolvency experience - 23 of which in the Insolvency Service - Insolvency Manager Jones Giles email me at melanienicholas@jonesgiles.co.uk
Many thanks for the reply. I have checked my agreement and there is a clause means the Franchise is terminated. However it does not say I cannot continue to trade outside of my territory. To be honest I have been in constant contact with the Franchisor and they are fully aware of my situation.
Could you let me know what you think re my other questions. I have sent an email to your office to see when the best time is to call.
you could of course review the IVA route which may be the most efficient way to continue trading, however you would need to be able to demonstrate that the contributions are affordable based on trading figures.
Mekanie is right in that most franchise agreements mean that the agreement is terminated, this is because the franchisor wants to be incontrol of the business and not have the OR involved in a potential sale ( not good for image!)
suggest you speak with Melanis first re the IVA.
If the IVA route is not possible then if you are to continue in business you need to get a workable plan togethr that will keep the OR happy and still mean that you can actually trade succesfully.
We have helped a number of businesses trade after insolvency and although there are some challenges ( business bank account for one) it is suprising that it is not as difficult as you may think.
Continuing Trading
Posted - 09 April 2009 : 13:43:09
