Declaring Bankruptcy In Wales (a Limited Company)?
Hi
my mum is looking to declare bankruptcy but after a long talk with her solicitor, he said that it would be best to leave it until the company owed money files a bankruptcy against you.
she has opened up a business about 5 years ago and things didnt go too well and she tried so hard to keep it open and the debts just kept on piling up. she has been paying them reguarly until last year, she had no money to pay them back
now the landlord has gained the business property and she has been kicked out of the house too as we were all living up in the room above the business. (he sent nasty men to threaten my mother, falsely declared themselves bailiffs and that they had a warrant which they did not have)
now people are chasing after her sending her letter demanding payment. i know its bad not to pay them back but she really has been trying hard to get the business up and running, however failed miserably. she has been stressed out from all this and i was hoping to find some answers for her.
the thing is also that i was the director of the company and ive also been sent letters demanding money.
she also received a letter from the council demanding overdue council tax as well, but shes hardly living by as it is, and it is really difficult for her to even spend a pound at the moment. if she declares bankrupty, will that clear the debt with the council tax? shes living with her friend at the moment
i used up all my saving to help her business and not that i regret but, am worried that this might affect me also. do i need to declare myself bankrupt as well?
im a student whose getting student loan and altho i am in my final year, is worried because im afraid this might affect my study.
thanks for your help
Tags: bankruptcy, Company, Declaring, Limited, Wales
February 28th, 2010 at 4:15 pm
Steps to be undertaken to declare yourself Bankrupt
1. Identify Your local County Court and Tel Number
To declare Bankruptcy, you will have to present your Bankruptcy application documents (petition documents) in person at the County Court local to where you live. The local Court can be identified through the telephone book, directory enquiries or by searching on the Court Finder web site: http://www.hmcourts-service.gov.uk/HMCSC… If you live in London, you may have to present your documents at the Royal Courts of Justice located in the Strand.
2. Contact Your Local County Court and Request Application Forms
Telephone your local County Court and confirm that you are considering Bankruptcy. Check whether you are speaking to the correct Court location based on your home address. This is important as you must present your Petition for Bankruptcy at the County Court local to your place of residence.
You should then ask the Court to post you the necessary application forms for Bankruptcy and associated information. You will need two documents:
Bankruptcy Petition (doc 6.27)
Statement of Affairs (doc 6.28)
The Court will post blank copies of these documents to you free of charge. Alternatively, these forms can also be downloaded from the internet using the following website links:http://bankruptcy-info.we.bs/
Good Luck…
February 28th, 2010 at 7:01 pm
waiting for someone else to wind the company up.. thats not the advice I’d expect
she would be ell to contact her accountant and get the compnay wound up in that way.
why.. well it kills the company off quicker, you are in control up to the moment the receiver/liquidator is appointed
whether peopel are chasing you for money or not is irrelevant.. yes you are a director but that doesn’t mean you have any personal liability. both of you need to make certain that you do not pay anybody personally (as this could make you liable for other debts).
strictly sepaking this isn’t really a lawyers area of expertese, its an accoutantcy issue.
if the company has no propsect of paying of the debts then you need to fold it as soon as possible to avoid incurring extra costs. which could cause you and any other director problems.
as regards the council tax if the liability is owed by the company then the debt stays with the company, if its persoanl then it stays with her.
if the financial side is so messy that she herself declares bankcrupvcy then the liability will go into her personal bankrupcy.
you need to act now to stop the risk that the failure of the company could cause consequentila problems for her and yourself.
March 1st, 2010 at 12:23 am
your mother needs to contact Business Debtline, they are a free impartial advice agency that will be able to help her in more detail than i can give here.
But in a nutshell the only advantage of waiting for someone else to declare you bankrupt is that it saves about £500.
In regards to yourself you shouldnt be liable unless you have given a personal guarantee against any of the debts or you acted dishonestly in your role as director.
March 1st, 2010 at 4:45 am
As another poster points out this is really an accountancy issue.
Technically speaking, a limited company is declared INSOLVENT. Bankruptcy is a term applied to a person.
One reason for having a limited company is because it has limited liability. i.e. people who run the company are not liable for its debts when the company is wound up.
A sole trader is personally liable for debts, but not a trader registered as a limited company.
You dont seem to have had great advice from your solicitor, see the citizens advice bureau for free and they will help or point you towards someone who can.
The only way the directors of a limited company are personally liable for debts is if the courts deem the directors liable ( very rare)
People who are after debts will not tell you this, they will colect from anyone they can.