When Lee's business succumbed to the impact of the Covid pandemic, the prospect of personal bankruptcy and the threat to his home loomed large. By the time we were instructed, the decision to liquidate had been taken. We stepped in at the right time to support and advise Lee on dealing with his personal guarantees, the probability of his bankruptcy and what options were available to save the family home.

Discover how early intervention and strategic negotiation can change the tide in our full case study.

Business failure and personal bankruptcy. Can you save my house?

Lee was referred to us by a business turnaround specialist. It was not unusual to find that he had taken loans and borrowed from friends and family to keep his business afloat. The business had long gone past the point when additional funds might save it, and liquidation was inevitable. Because bankruptcy looked unavoidable as well, he was very concerned that the family home would be lost, as a consequence.

Lee was finding it very hard to focus his energy when we met him. Once we were instructed, we reviewed his overall position, and we were able to reassure him that he had done nothing wrong, particularly with his Bounce Back Loan. We then contacted all his creditors and had the correspondence directed away from Lee, and over to us so that he could focus on his situation more clearly. In simple terms, Lee had tried to save his company for too long, and in doing so had thrown good money after bad.

Beyond the liquidation of his company, Lee was being pursued for several personal guarantees that he had signed some years before. We made a realistic informal proposal to his creditors within the context of limited family financial assistance that was offered. The dividend was too low and it was declined across the board. It was quite clear that he had no real option but to go bankrupt. In view of that, we assured Lee that we would make every effort to negotiate a deal with the Insolvency Service to buy out their interest in the property in due course.

Lee had left it too late to turn his business around. At the first sign of trouble, the first time you can’t settle your debts on time, that is the moment to get some advice. It does not have to mean it is the end of a dream, it can be the moment that the dream is saved. A creditor with a personal guarantee can call on the PG at any time they consider their debt is at risk because the company is in difficulty. This will add pressure to what is already a difficult time.

Liquidation will crystallise all personal guarantees in any case, some that you may have forgotten about from years ago, the timing could not be worse. But, circumstances are very likely to have changed since first signing the PG and that may mean the existing PG is no longer valid or enforceable. Our advice would be, don’t just pay up even if you can, get some advice first on any possible options to negotiate a better settlement.

We assisted Lee through his bankruptcy, providing support as and when he felt he needed it. We stayed in contact throughout the term of his bankruptcy, during which we contacted the Insolvency Service and engaged with them to negotiate a deal to buy out the trustee’s interest in Lee’s share, and save the family home from being sold in distress. Lee is now discharged from bankruptcy, in a full-time job and getting on with his life again.

Once we are in your corner, we stay until the job is done. We keep you informed throughout, making sure that you are aware of the good and the bad bits, so that you are never under any false illusions. That can be a hard conversation sometimes, but it is infinitely better to be prepared than to be shocked. And you are only speaking to one person about all the debts concerned, and that one voice is on your side.

Don't wait until it's too late; secure your assets and future with Anvil's expert bankruptcy advice today.