business collapse/bankruptcy.. Need some advice

fits

Hi there,

My partner recently lost his business in its second year of operation and went under with quite a bit of debt in his own name.. Its over a year since it happened now, and nothing has been resolved. I suspect he is burying his head in the sand in relation to it. He has visited the Money Advice Bureau but nothing seems to have happened. I suspect that he would be best to visit a solicitor who specializes in this sort of thing, but dont know where to look. He contacted the Free Legal Advice centre, but I'm not sure if they will deal with this sort of thing.
He has no large assets such as property.

I have pretty much accepted that he will not be able to get credit for a long time, and I am fine with this. He has definitely changed his habits and has been much more responsible with his money for the last six months. He wants to go and get good advice on what to do, but just doesnt know where to go.

If anyone knows of anything in particular that could be of use, could you pm it to me? Any other advice is appreciated.

fintan

You may want to try the forum over at www.askaboutmoney.com

fits

thanks, just looking at that site now and trying to figure out which section to put it in.

Any input from this board is still welcome...

Sponge Bob

if he did not recklessly trade he should simply write to all creditors equally with an offer of % on the € and tell them they should all take the same amount/hit , if any creditor refuses the offer is withdrawn .

if his only creditor IS the bank he should look at a standstill ( pays it back no interest acccrues) or a writeoff and standstill, they write off 50% and standstill the other 50% and he pays that back.

he should offer all creditors the same % of the debt owed. if there are 2 or 3 of them he should throw them in a room together for 30mins

if he DID trade recklessly its quite complex and requires good clear legal advice, in fact all those scenarios do .

fits

Sponge Bob wrote:

if he did not recklessly trade he should simply write to all creditors equally with an offer of % on the € and tell them they should all take the same amount/hit , if any creditor refuses the offer is withdrawn .

if his only creditor IS the bank he should look at a standstill ( pays it back no interest acccrues) or a writeoff and standstill, they write off 50% and standstill the other 50% and he pays that back.

he should offer all creditors the same % of the debt owed. if there are 2 or 3 of them he should throw them in a room together for 30mins

if he DID trade recklessly its quite complex and requires good clear legal advice, in fact all those scenarios do .

How do you mean trade recklessly? I suspect he overtraded as he took on a large contract before the business was established. He has several creditors, the bank being the largest, however there was no 'agreed business loan' and the overdraft wasnt officially approved for some reason, so I think the bank is on dodgy ground...

I dont know how he comes across in these posts, but he worked his bloody butt off for two years, and it came to this. It was a very bad time for him. He didnt go out with the intention of doing people out of money, and his employees and the taxman were paid what they were due.

Would most solicitors be familiar with this situation, or should we look for a specialist?

Sponge Bob

You should really talk to a good lawyer and pay for the advice and then present him with it, he is quite possibly clinically depressed and for good reason and will not do pro-active stuff for himself so you must do it for him , otherwise you would not be asking .

If you trade when unsure of your financial position you may be adjudged to "recklessly trade" or "fraudulently trade" (thats stronger) , thats not an accusation against him but an observation .

If he had a firm contract , even if only verbal, he probably did not do either but he really has to get off his arse and prove it and get himself a break here. You read this first for background .

http://www.arthurcox.com/dynamic/publications/Directors,%20Officers%20&%20Managers%20Liability.doc

There is nothing unusual about this sort of "eggs in one basket" business failure, he needs to know its common and just deal with it and make his case to all his creditors but EQUALLY is the important thing . You may be able to get an experienced Enterprise Ireland mentor person to tell him that , again you pay a bit but not a huge amount for this wisdom. Twould be cheaper than a doctor any day and more relevant.

If he has no money he has no money and thats that. He has to go out there prove it to his creditors which means he has to get off his arse first.

fits

Thank you spongebob, I really appreciate this advice.

To sum up, I need to
1. get to a solicitor of some sort and see what can be done.
2. Contact Enterprise Ireland and
3. get him to a solicitor himself..
4 Ensure all creditors are treated equally.

Ok so...

I'm really beginning to think time is of the essence now..

Can anyone recommend a solicitor, perhaps by pm?

Sponge Bob

Leave out 3 for now , you execute points 1 and 2 and it will cost you €500 or so but will clear the situation up .

Point 4 is the approach to take once you take the advice on board from points 1 and 2. The local mentors in your region will all have a CV, see who has been thru the wars the most in their own careers and see if you can contact them and how they react.

Imagine a mentor as a business shrink or business counsellor, there are quite a few of them around , they should ideally deal with real businesses but he will not set another one up till he gets his head straight so they are being asked to dispense wisdom after the fact and suggest a workout arrangement .

Find a local solicitor who deals with businesses (not divorce or crimnal ) and who is sympathetic as well as competent . The solicitor should explain the 'equity' principle in sorting out the creditors for what you can pay them, I take it that none will get 100c in the € so you must eventually set a figure and offer it to all . Could be 5c in the € or 50c in the € .

Its often called a workout arrangement

http://www.yourdictionary.com/business_profile/debt/bankruptcy/bankruptcy-alternatives.html

fits

Thank you spongebob... I'm really grateful..

Here we go...:)

fits

Just to update you: it turns out that when OH was telling me he was 'dealing with it', that he actually was... MAB came back to him with a proposal that he pay back full amount to all creditors over the course of 10 years. Creditors wouldnt agree on anything else. When OH said this was impossible for him in present circumstances, the MAB said they could no longer be of any service, that was about two months ago. A so-called 'workout arrangement' couldnt be agreed upon. Each creditor has his address and phone number, but he has heard nothing since. He has a statement of means and details of his debts at home, ready in case something happens.

OH has found a solicitor and will make an appointment shortly (he can only deal with little bits at a time). He has a form for free legal aid, but I think paying someone will be quicker and better ( and I dont know if free legal aid covers this sort of thing anyway). He's actually quite well organised and I'm dead proud of him:) . A bit annoyed he didnt keep me more up to date on things, but I have my own worries at the moment, and he still finds it very painful to talk about the whole situation.

Sponge Bob

That sounds a lot better already . I'm sure its a trying situation for both of you and the very best of luck in getting a plan together to see both of you out of it .

It will take time and you have no idea how many OH persons are in the same situation today as you are fits (or worse as I assumed) .