bankruptcy advice

got a mate with a shop and hes feeling under pressure at the moment from his suppliers/paye/vat etc…how exactly if he does will he go bankrupt? he asked me but ive not exeperienced it..whats the time frame etc. any tips? im a bit worried about him tbh 🙁

Take proper (i.e. not STW) advice straight away.

This is his business, he should be speaking to someone now.

who should he goto?

his business’ lawyer or accountant should be able to provide initial advice/direct to an appropriate person.

the key thing is that he takes steps immediately.

it may be that he can take advice which could save all or part of his business, prevent him losing more than he needs to, or indeed lessen his personal liability if he continues trading whilst he thinks he may be insolvent (particularly important if LTD).

depending on the circumstances, he might get a bit of breathing space.

1. an accountant
2. chamber of commerce

Is he a LTD or sole?

This will have a bearing on how it is dealt with.

hes ltd…good advice from the chambers of commerce?

His he LTD company? also call the Accountant first.

yeah, if he’s having difficulties and he’s ltd then he must speak to his financial adviser immediately and made sure he has a nice auitable trail of all correspondence and advice from this point forwards.

Accountant then contact a adminstrator and they do all the work for you.

HE should speak to his accountant who should have been giving him advice anyway. He may be able to set up a voluntary arrangement where the creditors can’t apply any more charges or interest to the liability which will allow him time to trade out of it.
The accountant should tell him if the buiness can trade out of it if it’s a cash flow problem or if it’s insolvent.

The Citizen’s Advice Bureau can help people for free, but it can take some weeks to get seen. They can also help people go through bankruptcy proceedings. But a bankruptcy petition is heard in court, and they can still make you pay money back.

If the amount he owes is less than £15,000, he could get a Debt Relief Order. You can contact National Debtline for free and they process it all over the phone, and by post. You don’t have to go to court, but you do have to do a lot of the correspondence, form-filling yourself. There are quite a lot of stringent conditions attached to one though.

National Debtline http://www.nationaldebtline.co.uk/ is actually funded by the banks. Basically with a debt relief order, you have a year’s grace where people can’t chase you for money at all or add any interest, and if your financial situation improves within that year then you must start paying your creditors back. The best thing for him to do is just agree a longer time frame with each of his creditors to pay back what he owes. He should get it all in writing. Say if they force bankruptcy on him, then they’ll get nothing back at all. He can be forced to sell most of his assets to pay off creditors aswell. So bankruptcy isn’t always the easy way out!!

National Debtline also operate Business Debtline http://www.bdl.org.uk/ – this might be just what he’s looking for, again they don’t charge for their advice or take a fee for organising anything for you as far as I’m aware.

Stop buying
Stop spending
Talk to people you know, people who care about the business and qualify as stakeholders.
I know you can be a miserable got sometimes but people do care about you and your business.
Sort out the tribunal payment and stop Paul from taking action – SOON !
Paul wants to use a mutual friend to mediate.
You are too bloody stubborn for you own good!
Let the right people help you, there is no shame in that, don’t let egos get in the way
I would help all I can, I owe you!
Isolation is crap
You seem to have been waiting for a ship to come in, Newsflash – It won’t happen
Joss

Firstly even if you go bankrupt, you will be paying the money you owe back there isn’t an easy way out!

The stock you hold in both shops is beyond belief, why do you stock so much high end kit? Sure have some but remember it might increase sales turnover but not profit margins and maximisation. Commit to a brand don’t stock every single one you can have a normal brand like giant, have a premium brand or two just keep it simple. Stop buying. Stop spending money on stuff you don’t need, won’t sell. Talk to your creditors tell them what changes you are going to be making and how you are going to ensure you get them their money back you owe them, Have a sale get rid of stock it’s the hardest asset to shift! So advertise effectively. Did i mention stop buying? Listen to people who might actually know what they are talking about because you clearly have no clue! Stop letting your ego get in the way! Do you think all the big companies got to the top by doing it themselves? They took help and advice when they needed it! Oh and talk to ‘Paul’ tell him you will get him his money show him how you are going to do it, strike up some sort of agreement. Let people help, take advice! People will help you. And stop being such a jerk! Yeah and singletrack is not the answer on how to liquidate a company!

p.s A limited company does have limited liability but not all the time!

If he can do all he can to avoid going bankrupt, he might be thankful in the future.

Going bankrupt can make life very difficult for the next few years….

😯

@

taysider

Ask your suppliers to take stock back, and give you a credit, they may well rather have stuff back and be able to re sell as opposed to loosing the value of it.

Cheap help – the Federation of Small Businesses – join and they have lawyers on hand to help clarify what your obligations (and rights) are. Not sure about insolvency but they’ve been great for queries about people not paying me. Also if you have HR issues… reading between other people’s lines.

VAT – contact HMRC and arrange to pay in instalments. I’ve done this once and it was not as horrific as I expected.

Stock – have a sale. It’s really hard not to buy one of everything (especially whilst you’re learning your customer and some of them do ask after things, you get them in and then they don’t buy them leaving you feeling most ‘annoyed’) and to get left holding things that noone wants. When it comes to the choice between not losing your business and not making what you expected on something the former is more important. Cash in your hand can then be used to make wiser choices even if the balance sheet isn’t as good.

Noone is having it easy at the moment. Surviving should make you proud.

this thread has taken a bit of an unexpected direction….

Talk to your suppliers immediately.

At Madison we have helped loads of customers over the years through tough times but always the best policy is to talk and we’ll listen and help. Businesses go through bad periods from time to time and it does not mean the business is bad and can’t be saved.

Best of luck.

Dom
Madison

So locals who else remembers rod ?