looking for any advice or help

[sagapal]

Hi,
I am presently in an IVA which was approved in october 05, so far I have been able to keep up the payments but am finding it increasibgly hard. The reason for my IVA was my clothing busines got into difficulties and I closed the three shops I had tpo locate to a new shop, which I hoped would do better. I took this shop as I was in rented accomodation and could convert the upper floors to a flat. I am half way through this but just cant meet my rent payments. Which is £25k per year. I sell clothing so have been trading with a few companies but now I cant afford to pay them for stock I have had and the trade is terrible because of our stock postition. I have had the shop up for lease for six months but no one seems to want it because of the location. I am increasingly stressed because im living and working in the same building on my own. I am worried that I may have broken the law because of the credit I have with suppliers. But clothing is all done forward order . The landlord is getting increasingly nasty, but I do not think they want me to leave because no one else wants the property. He has even threatened to have me beated up if I go Bankrupt. I have spent none years self employed and do not want to lose my business. My IVA supervisor knows it is difficult and at present is willing for me to carry on, but I am increasingly stressed. It is virtually impossible to run a business with no lines of credit when times are difficult especially in January and Febuary.
Basically im looking for any advice or help you may be able to give, and if there is any one I may be able to talk to.
Thank you in advance.
Alan


Alan

[ivamole]

sagapal, I know it's tough losing businesses but, from what you say, I assume you were operating as sole trader rather than a limited company.

It also sounds as though you are still struggling because the business is under-capitalised and you can't sustain both your current business and the IVA.

I assume that your IVA was based on you continuing in business in your new location but it would help if you could clarify this. Did the IVA allow for your current overheads, stockholding costs etc ?

You are right to be concerned if you are ordering from suppliers knowing that you cannot pay them. Not a good idea and you need to increase your stock-turn to generate fast cashflow and profit. You don't need dead stock that you can't afford to buy. You must talk to your suppliers and come to some arrangement with them.

I am concerned about the threats from your landlord and I would talk to a local solicitor urgently - many advise on landlord/tenant matters with a free one hour consultation - because harassment of tenants is a very serious matter.

I would also try talking to a reputable debt advisor like CCCS. They are a charity recommended by the Insolvency Service and their service is free. Their web site is at http://www.cccs.co.uk/

Hope some of these thoughts help.

[MelanieGiles]

Hi Alan - great advice there from IVAmole!

Just to add from a practical point of view, if I were your IP I would be assessing the overall viability of this business generally. There is really no point in flogging a dead horse, and it seems to me that this business has largely run its course due to a lack of readily available working capital.

What is the position regarding your personal assets? Do you own a property? If not, and depending upon the level of debts you are carrying, I would give serious consideration to the merits of bankruptcy proceedings - but do take advice from your IP first.

He/she is far better to advice, given their detailed background knowledge of your case, than anyone else. And if you do decided to seek external advice, choose someone with experience of trading businesses.



Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[sagapal]

Hi Thank you for your reply.

I am a sole trader and the IVA was based on this new shop trading well, which it started off doing. The break even was £3000 a week which we managed, but retailing has got more difficult especially due to the increases in interest rates.Which is making people more cautious, especially in clothing which is one of the things people cut back on.
It is getting increasingly more difficult because I can not afford to pay for stock and my rent etc.
To stock any named brands you have to order six months in advance as it is simply the way the industry works, but I am not doing this anymore as I am worried about running up more bills I may not be able to pay unless I can impove the trade.Would I be prosecuted if I went under ?
Surly IVAs only fail if someone gets into debt again because they are not trading well.?
It is a catch 22 situation really. I would be intersted to hear how other business people in an IVA cope with out any lines of credit, whch is how everyone works,how many business run with no overdraft and are cash rich ?
My bank has made this worse by charging me £5000 in excess charges in under a year, although I am trying to reclaim this.
Added to this I am living in the property to save any living costs and this is making me increasingly stressed, especially with the threat of violence from my landlord.
I am holding on for them really as they have to meet their commitments as well and are individuals and not a large firm.
My IVA is around £200,000 but a large part of this was made up from leases as the outstand term was included in the figures.
I have no assets which is why the IVA was approved and this cost me £4000 to set up.
I do feel incredibly stressed and this forum is extremly helpfull as you realise you are not alone in suffering these problems.
I know business go bankrupt all the time and I guess that was the point of making the length before discharge shorter, so you can start again.
But it is very difficult to admit defeat!

Again thanks for your replies and any more feedback would be greatly received.

alan

Alan

[MelanieGiles]

Hi again Alan

First of all you definately will not be prosecuted if the IVA fails, however it you are not servicing the monthly payments then the IVA will have to be brought to a conclusion.

Given that you are trading a business which relied upon lines of credit, I am sure that this was considered within the cashflow forecasts your IP used to present your proposals to creditors.

If your trading position is not allowing for you to buy in new stocks, and you are under threat from action from your landlord (I mean distraint rather than violence which is absolutely not acceptable), then you must seriously consider whether it is worth continuing to trade. And do make sure that you are not simply incurring more debts by trading on.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[sagapal]

Hi Melanie,

Thank you for you speedy reply. That puts my mind at rest a little.
I am not really running up more debts other than my rent arrears as I am now wholesaling stock in as and when I can. If I can keep doing this I will be able to pay off my two or three existing suppliers in the next few months.
So if I can impove the trade untill I can sublet the shop I will survive. Then I hope to find a shop that can be more succesfull and keep trading to pay the IVA. It is the pressure from the landlord which makes it very stressfull and obviously I am the only one keeping it all together so if my health suffers so does the business.
I am determind to keep surviving !

Thank you again for your support and advice, it really makes a differance. And well done for such a great website.

Alan

Alan

[ivamole]

sagapal, I'm not sure about the liability in your lease for rents to the end of their term. I stand to be corrected but this sounds wrong to me.

Are the previous properties still empty ? If not, I don't see how the landlords can collect a new current market rent plus a continuing proportion of the rent from you through an IVA.

I can understand a liability for unpaid rent up to the date you surrendered the lease and I appreciate that there can be leasehold complications like dilapidations when you vacate a property but it would help if you could explain this.

With regard to your current landlord and trade creditors, it's also important to bear in mind that you can be made bankrupt for non-payment of post-IVA debt. This applies to any debts that you have taken on since the IVA and it's important to remember that your current trade suppliers are not bound by the IVA.

I would also add that, from what you say, most of your business problems seem to be property related. You are paying the rent on shops even when they're closed.

Couldn't you trade without a shop - simply using a lock up and a van - and concentrate on wholesaling, online sales and outdoor markets instead ? It might be a way of rebuilding your capital whilst also reducing your overheads.

If you find that bankruptcy is your way out this is something that you could still do as a bankrupt. Buy in stock in bundles that you can afford and sell them on. Also means that you no longer have the stockholding costs of the extensive range that you have to carry in a retail outlet to make the shop attractive to customers.

Something to think about ?

[sagapal]

Hi

With regards to leases . Yes the amount till the end of the lease was included in the IVA this IVA around £40,000. And the landlords have re let the property now so will be collecting rent as well I assume.

My main problem is that as I live above my current shop I will also become homeless If I go under. Can the official receiver take my personal effects if this happens? Am I wise to move this to another location just in case and move in with friends? Or will it be exempt?

With regards to market trading and online trading, I will have no money to buy anything!! And no stock to sell!
Am I allowed to carry on trading while bankrupt? I thought you could not work for yourself during this time?
I see so many other traders just go bust and start up the next day! But I do not understand how this can happen. Is it true that sometimes the official receiver lets you buy back the business and carry on trading rather than removing the stock and fixtures to auction ?
It is so very confusing.

And some days I think it would be easier just to stick my head in the gas oven!!

Only I don't have one ! Which is probably for the best! Every thing happens for a reason they say!!

Alan

Alan

[ivamole]

sagapal, I would take legal advice on the leases included in your IVA. Try your local Citizens Advice Centre or use the CLS direct website to find a local solicitor who can give you one hour's free legal advice.
I would also take advise on your current situation and the threats from your landlord.

I may be very wrong here but if you have surrendered the leases and the properties have been let it doesn't sound right that a proportion of 'future' rents was included in the IVA. Please take immediate advice on this.

With regards to bankruptcy. The OR will not touch your personal effects unless you are dripping in Rolex watches and plasma TVs and if I were in your situation I would also move in with friends just to remove myself from the stressful situation. You don't need it!

You are not allowed credit in excess of £500 while you are bankrupt but it sounds as though you have no assets and you would probably be discharged after twelve months. Again take professional advice on this and phone CCCS to take a second opinion before talking to your IP.

I can understand why you have struggled to keep a business going but sometimes it's also good business sense to recognise when you're fighting a losing battle. Take a break from it all and think about working for someone else while you're bankrupt.

The people who carry on while they're bankrupt are often tradesmen (plumbers etc.) who are mainly selling their own labour and don't need much credit to trade. Either that, or they've traded as limited companies and use another family member's name to serve as Director and start up as another limited company. Dodgy stuff.

There's no getting away from the fact that bankruptcy will effect your future credit history but then so does an IVA. It will take time to build yourself up again but it sounds as though you need a fresh start.

There is life after bankruptcy and remember that you're at rock bottom now. From now on, if you start to do something positive about your current situation by taking as much advice as you can then you've taken the first step towards a brighter future.

Best of luck to you - and pick up that phone !

[sagapal]

Thank you
You have made things seem a little easier.

And maybe I do need a fresh start and your right it is important to know when your flogging a dead horse. It is not easy giving up either tho!

Thank you for the advice once more.



Alan

[neverending]

Hi sagapal
I can only quote from my own experiences and confirm that if you surrender your lease early then you are liable for the full amount until the end of the original term of your lease.
Regards

[sagapal]

Further to my previous posts.

My landlord sent in the balifs on friday. They took all my stock, and all my personal effects, furniture etc. The only thing I managed to take were my clothes. I just had to load them into my friends cars and leave the shop. As I was living above it was a nightmare. Nine years of work gone in a day.I feel devestated and exhausted. The IVA supervisor sid the only thing is to now file for bankruptcy. I am so worried about the effects of this.
What actually happens now ?
Do I have to appear in court?
Will I have o make payments if I get a job ?
Can I start a new business?
I have no house or assets. My mum bought me a car at christmass so I am hoping that is safe as it is in her name. Although I have been paying the insurance so that is in my name.
Who pays the official receiver ?
Will he close my bank accounts? Although they are both overdrawn.
I have tried so hard and feel desolated , loosing my home and business in one day.
Do I have a meeting with the offical receiver ? or will the iva company do it all.?
The iva company said I have done my best and that I need to think of health.
Any advise would be fantastic.
Alan

Alan

[scaredkez]

oh dear alan i am so sorry it has come to this unfortunatley i have not been in this position and i feel for you enormously
what can i say
kerri

Please view my blog at: http://scaredkez.blogs.iva.co.uk/

[neverending]

Alan
I feel for you.
Now is the time to wipe the slate clean and start again,so bankruptcy must be the option for you.Many of your questions can be answered on the sister site www.bankruptcyhelp.org.uk,so log on and post all the questions that come to mind.
The very best of luck to you and please keep posting as you are not alone.
Regards