Author Topic: Self employed business gone wrong, want to go bankrupt  (Read 20931 times)

andy

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Self employed business gone wrong, want to go bankrupt
« on: Jun 14, 2016, 05:34:34 PM »



i hope someone can help me. i started selling on my dropshipping website which i created a couple of years ago selling books & dvds to Australia from the UK.
Over the last few months things have gone very bad, and i now have about £25,000 worth of orders which i am unable to fulfil.
The problem is, 'i bit of more than i could chew.'
Basically i am a one man team operating as a Sole Trader. Creating the website, listing thousands of products, fulfilling orders, answering emails and calls - and so a typical day is taking up to 16 hours everyday. At the end of it i am so exhausted that i have not been able to keep an accurate account of the accounts - running of just estimates.


The turnover of the business has been good, and i was assuming everything was ok. But the costs associated with the website have simply overwhelmed me. Hosting fees, google advertising fees, various apps for the websites fees, getting some specialist work done on the website and as i cannot afford to have the items sent with tracking, have had a lot of chargebacks which cost £15 each time, and have to refund the payment even though i have sent the item out causing large losses.


I am shipping from UK to Australia and so delivery times are quite lengthy and quite a few customers have requested refunds, which i have then had to pay as i wanted to avoid the £15 chargeback fee aswell.


I have been unable to fulfil a lot of the orders due to cashflow problems and the fact that the website was running at a loss when i was thinking i was making a profit.


On average each order is about £25, i have fulfilled about a 1000 and refunded about a 1000 and i have about 1000 outstanding orders which i now have no money to fulfill.
So in total about 1000 orders with a total value of £25,000.


i now realise my business is doomed and cannot keep afloat.


I am thinking of going bankrupt, but the problem is who do i owe the money to?


If i close my business and take [** sorry, no personal contact invitations allowed **] down, the customers will freak out and will file chargebacks on their card.
My payment processor which holds and transfers the payments to my account is called Stripe Payments and that account will eventually run into minus £25,000.


Who do i owe the money to? Who do i put down as my Creditors?
The customers will get their money back via the chargeback, but then my Stripe Payments account will become minus £25,000 and they will come after me.
Do i put Stripe down as the creditor for the full amount?


Have done anything wrong? As in illegal? I have not spent the customers money on myself, it has been going into business costs.


I genuinely thought i could get myself out of this slowly but surely, but have now come to the realisation that it is snowballing out of control and if i dont put a stop to it the debt could run into hundred thousand pounds.


What are my options, please help! this is having a very negative impact on my health, i have not eaten for 5 days, am losing weight rapidly, and am losing the will to live. I have four young children who are all suffering because i cannot even get myself to put a false smile on for them whenever they come into my (where i have locked myself in, trying to sort these issues out)


Please somebody help with some sound advise.
Thankyou

Lisa Thomas

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Re: Self employed business gone wrong, want to go bankrupt
« Reply #1 on: Jun 16, 2016, 04:56:16 PM »
Hi - I think you are worrying too much about the detail and not enough on the overall options.


What assets do you and the business own?


What liabilities do you have excluding the customer debts?


At present the customers are your creditors, if you do Bankrupt they will be contacted.  If they are subsequently paid back by their banks then Stripe will as you state become the creditor but that will all come out in the wash post Bankruptcy.


have you ceased trading?


Is there any value in your website?
www.Nevilleco.co.uk 01752 786800

andy

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Re: Self employed business gone wrong, want to go bankrupt
« Reply #2 on: Jun 16, 2016, 06:19:16 PM »
hi Lisa,
thank you so much for your kind reply. i really appreciate it.


I am still trading as i am afraid of taking the site down as customers will think i have run off.


The site is not really worth much according to the online site valuations services.


I have absolutely no assets, i live on rent, have two laptops for my work, and a £350 TV, apart from that i live a very simple life and own nothing of significant value.


What do you think are my options, and will i be in trouble for the downfall?


Thanks again

Lisa Thomas

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Re: Self employed business gone wrong, want to go bankrupt
« Reply #3 on: Jun 17, 2016, 11:42:46 AM »
Hi Andy


On face of what you have told me Bankruptcy would seem to be the best option but you might want to check and see whether you fit the criteria for a DRO (Debt Relief Order).


Happy to talk in more detail if you like 01752 786800.
www.Nevilleco.co.uk 01752 786800

Lisa Thomas

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Re: Self employed business gone wrong, want to go bankrupt
« Reply #4 on: Jun 20, 2016, 04:31:14 PM »
I've made various video guides which might also help you on my Neville & Co You Tube Channel.  I am unable to post the loink on here but you should be able to find it easily enough on You Tube.
www.Nevilleco.co.uk 01752 786800