question category: Bankruptcy

How will me going bankrupt affect my business partner?
Submitted on: 9th Jun 2009 by Non-Member | Total Answers: 1

I have a business partner who has a property secured for the business loan. I am thinking about going bankrupt and want to know the implications on my business partner before I do so. Will they loose their property? Or will it just be a case of them taking full responsibility for the loan?

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Re: How will me going bankrupt affect my business partner?

The short answer is that you and your partner need to discuss the situation with an insolvency practitioner before you go down the bankruptcy route.

In the UK, bankruptcy is all about personal unsecured debt.

If you have given a personal liability for a an unsecured debt in joint names, your liability for that debt will be discharged in bankruptcy and your partner will have to take on the whole of that debt. This includes TAX and VAT.

In bankruptcy, I believe you cannot be a partner or director while bankrupt (without the permission of the court).

http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/howtowindupapartne...

www.insolvency.gov.uk has the official publications on bankruptcy and the facilities to complete your forms online. If your situation is complicated you should take advice from an insolvency practiotioner. You can find a local IP at https://www.r3.org.uk/financialcrisis/default.asp?dir=FindaPractitioner&...

Here is the Business Debtline leaflet on partnerships
http://www.bdl.org.uk/images/bdl09_ew_Partnerships.pdf

Submitted on: 10th Jun 2009 by Darren Member

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