Going Bankrupt… tell me about it.

Right, i'm broke at the moment, due to being self employed and having litterally no work. This may end up being a reality for me very soon. Has anyone had it happen to themselves? How did it affect you afterwards?

Ring the National Debit Line[/url] very helpful and free.

Lots of changes in this area recently and it might not be your only option and if it is they can walk you through it all. Few years back it wouldn't have caused you as many problems once you had been through the bankrupcy period but with todays and the future financial climate you could be in for a rough ride (if you need credit).

If you have your own business, surely personal bankruptcy and the folding of your business may well be different issues?
i.e. if you tie your business up you may not have to apply for personal bankruptcy? Rather depends on your personal situation though I guess.

If you have your own business, surely personal bankruptcy and the folding of your business may well be different issues?

Not if you're self-employed – its all one and the same. If the business runs out of money, debtors come after you personally.

Hi Lyons I went bankrupt in Jan last year – I'm a bit short of time right now but I'll post a bit more later.

In the meantime there's loads of help top be had here…
http://forums.moneysavingexpert.com/forumdisplay.html?f=136

Or feel free to email me off-forum if you want…
themuffins29 [at] googlemail [dot] com

I'm personally going through it at the moment. The business has been wound up, but the personal bankruptcy is surely next. I can't se how you can possibly do one without the other.

LIke MM said. If you run your own business you have personal guarantees with the bank etc. So you're personally liable for debts. And the tax certainly won't let you off the hook

Keep your chin up fella. I'm kind of resigned to it all now. When it gets too bad, get some prescription beta-blockers to try and reduce the inevitable bouts of 'The Fear'

What I meant was that if the business had enough assets to pay off it's debtors then you wouldn't necessarily have to become personally bankrupt (you'd just be left with no business or income).
Not very likely I guess.

For what it's worth, there is no shame in going bankrupt when you have had a proper go at starting a new company, and run it diligently.

If you operate through a Limited Company then it is a separate legal entity to you. Having a Limited Company means you have Limited Liability, hence your liability is limited to the investment you have made in the business. It is the business which becomes inslovent, not you personally.

If you have a limited Company you're unlikley to go personally bankrupt unless you have personally guaranteed loans, for example with a charge over your house, although if you have then there's little point forming a limited Company in the first place.

If a business has enough assets to pay its debtors then the Receiver would usually do this (although it's normal for a business to go into a period of administration to see if it can be saved before liquidation). But most businesses are well past this point by the time they are forced into administration/liquidation.

Unless the court feels there has been some form of negligence, when your limited Company becomes insolvent the worst case for your personally (apart from losing your income and business, which clearly is bad) is likely to be that you could be barred from becoming a company director for a period of time.

What assets do you have lyons ?

I went under in 1997, and I only have one piece of advice given to me by my trustee in Bancruptcy…….."get professional advice the minute you think there is a problem" in your case NOW!!!

If i had sought professional advice only 6 weeks before I did, i wouldnt have gone bust…….

Please please get some pro advice. I can reccomend Begby Traynor (nationwide franchise) haed as nails but on your side…

Good luck

P.S. I learnt more in 6 weeks about business/life and me than i had in the last 10 years. I was 27 when it happened….

Take advice is my advice. Citizens Advice, the debt advisory line already mentioed and if a business is involved get an Insolvency Practitioner involved asap. Begbies are v good but poss too big for your case. Smaller firms / partnerships will tend to be cheaper and probably good enough for what may be a simple case. Like so many things it is a sector with huge amounts of specialist rules, laws, clever tricks etc etc so the chances are you just cannot do as good a job yourself. Insolvency is far less frowned upon than in last recession so take pro advice – you could save a lot and these guys work for you even if its for the benefit of creditors.