Question
I need help!
My business has gone bust and I signed as guarantor for all the loans, and also had loans in just my name. My company did kitchens and bathrooms, and while I had some work, much of th work dried up. So now I owe the company’s debt and my own debts, which total well over £30,000. In addition, I took deposits from future customers and used that money to pay towards the bills and debts, in the hopes that more work would come in and I could continue to pay the bills and debts. So now these customers are asking me when am I going to begin the work promised them, but I have no money to buy the sinks or showers to begin the work.
I own nothing but my work van and my tools, no property or anything else of value. I have moved into a bed sit and can barely afford that. I am unsure what to do?
T
Answer
T,
Your post does come across as being in dire straits, but there is always a way out of debt. There is always an option.
If you feel you cannot turn things around within a reasonable period of time, and work out payment arrangements for the accounts, and continue to trade, then you may need to consider bankruptcy.
Bankruptcy is the quickest way out of debt, and it will give you a fresh start. There are consequences of going bankrupt, such as it stays on your credit file for six (6) years, but it does allow you be rid of all the debts.
Depending on how your company is structured, you will still be able to trade, but may not be able to trade under a different name, and you may be required to advise any new customers of the old company.
Those customers you have taken deposits from can be an issue. While you could include them as creditors in your bankruptcy, it will not do your business any good at all. You need to find a way to make good on the work you have promised them.
How many customers deposits did you collect, and how much in total were they?
Bankruptcy is a serious financial matter, and as such, you may wish to speak to someone to go over your full set of circumstances and finances related to yourself and your company prior to entering into bankruptcy.
Regards,
Jon