Author Topic: BUSINESS DEBT HELP NEEDED  (Read 2426 times)

Wallboy

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BUSINESS DEBT HELP NEEDED
« on: Feb 14, 2011, 02:46:43 PM »
I use to run a small online business selling products but some how I managed to mess up and forgot to pay my supplier for the products. They have been chasing me up for over 12months for the sum of £299.16.
 
I have today received a letter from their Solicitors asking for the payment within the next 7 days.
 
I decided to stop trading around 18 months ago and have removed my online store from the internet. As the business is now closed and I am now un-employed, I simply cannot afford to pay back the £299.16.
 
I heard that if a Ltd company closes, all debts fall with the company name and not against the company owner.
 
Is this true? and how do I write to my supplier explaining the company has closed and therefore I am not required to repay the outstanding balance?
 

solvent

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Re: BUSINESS DEBT HELP NEEDED
« Reply #1 on: Feb 14, 2011, 07:03:27 PM »
Write to them first and say that your company has ceased trading so unfortunately you will not be able to pay them...if they do not accept this.


Then get form 652a from Companies House and send it back to them.  Write again to HMRC, creditors etc informing them, together with a photocopy of form 652a that you have sent to CH.

They then have 3 months to object and providing none don't, the Company will be struck off.

shocksoc335

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Re: BUSINESS DEBT HELP NEEDED
« Reply #2 on: Feb 15, 2011, 09:52:34 AM »

 
If the debt was in the name of the ltd company then you will need to check that you didn’t sign a personal guarantee or you will continue to be liable for the debt after the company has closed.
 
Also you  may have ceased trading but if the company hasn’t been officially liquidated or struck off (dissolved) then the ltd co will continue to be chased until it is.
 
You can check a ltd co status on companies house website – Click on the middle option ‘search company info’, type in the name of the ltd co and this will bring it up in a list. If you then click the reference number of the company on the left it will bring up the co info. It will show as ‘Active’ if still open, ‘Proposal to strike off’ if it is in the process of closing, ‘Dissolved’ if struck off or ‘Liquidated’ or ‘In liquidation’.
 
 
 Hope this has further helped!
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James Falla

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Re: BUSINESS DEBT HELP NEEDED
« Reply #3 on: Feb 15, 2011, 05:55:19 PM »
Hi there Wallboy
 
Can you confirm whether your business is indeed a limited company or whether you were acting in the capacity of a sole trader? If the business was indeed limited, then you can not be chased personally for the debts unless you gave a guarantee. If you were a sole trader, then you are personally liable and will have to consider a personal debt solution remedy.
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Wallboy

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Re: BUSINESS DEBT HELP NEEDED
« Reply #4 on: Feb 17, 2011, 09:08:46 PM »
I was infact a Sole Trader and didn't register my business so I will not be on the Companies House website.
 
I cannot remember signing a guarantee when I opened an account.
 
I need to try get off from paying the outstanding balance as I am now unemployed and don't even have £100 to my name  :(

shocksoc335

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Re: BUSINESS DEBT HELP NEEDED
« Reply #5 on: Feb 18, 2011, 05:15:49 AM »
Hi Wallboy,

It seems you are liable but the debt can be treated as a secondary credit debt such as a loan or credit card. Even though you are unemployed you can self negotiate a token payment with them by sending them a financial statement sheet showing them your income and expenditure.

I'm sorry this is not better news for you. In some instances you can also write to them and tell them you are unemployed and don't have the funds and request they write the debt off they can agree to do this but not usually.

Other than that if you can find a lump sum of money say 30% of the outstanding debt you may be able to offer them a full and final.

Hope this helps

Kind Regards
Shocksoc335
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James Falla

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Re: BUSINESS DEBT HELP NEEDED
« Reply #6 on: Feb 22, 2011, 04:56:23 PM »
Hi Wallboy
 
As Shocksoc has said, given that you were a sole trader and not a limited company, you are personally liable for the £300 outstanding. If you are not a homeowner and have little income then you might be able to consider a debt relief order. This will cost £90 and will mean that your debt is written off after a year. However, for such a small debt, even a DRO could be considered a sledge hammer to crack a nut and you might be better off making small token payments of even £1 a month until you are back on your feet and can pay the debt off.
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