Will Declaring Bankruptcy Stop me From Running my Company?
Author: Derek Cooper
For those with a personal debt problem bankruptcy can be a very effective solution. If you run a company either as a director or sole trader this could have implications for you.
The very idea of bankruptcy has overtones that often put people off even considering it. It can however be a very useful debt solution in a number of situations. If you declare yourself bankrupt, all of your unsecured debt will be taken away from you. You are generally bankrupt for 12 months after which you are discharged debt free.
If you are a home owner with equity in the property it is quite likely that the house will be sold. However for business owners or company directors with no equity in property it can seem to be a very good option to solve your personal financial problems.
However, there are other implications for business people that you will need to be aware of:
Company directors who are bankrupt must resign
A bankrupt person cannot act as a limited company director or in the capacity of managing a limited company.
If you want to declare bankruptcy then you need to find a replacement director who can take over your responsibilities until your bankruptcy is discharged. If that is not possible then it may lead to the business being closed.
An alternative personal debt solution call Individual Voluntary Arrangement (or IVA) exists which will allow you too continue as a director but still resolve personal financial trouble. If you are a director this may well be a better solution for you.
Sole traders may find banking difficult
While there is no prohibition on running a non limited company while being bankrupt, there are other implications you need to consider.
You will be able to continue to operate as a sole trader business without the burden of your personal debt. As such bankruptcy can be a very useful tool for self employed people who have no property to lose.
However, one of the problems with declaring bankruptcy as a sole trader is that you may have to close your business bank account. If your business account is with the same bank as your personal account and you owe money to this bank, the business account may be frozen or closed after you declare bankruptcy.
Once bankrupt, you can open a new personal bank account, but it may not be easy to open a new business account.
There is a way round this issue - open two new personal accounts, one for personal, and one for business activities. However, as your credit rating will be affected, it is unlikely you will be given overdraft or credit card facilities for either of these accounts.
Overall, whether you are a company director or sole trader, declaring bankruptcy may have a significant impact on your business. Bankruptcy can be a very good way of resolving personal debt. However, if you are considering this as a solution, you will need to plan carefully to ensure that any negative impact to your business is minimised.
Article Source: http://www.articlesbase.com/finance-articles/will-declaring-bankruptcy-stop-me-from-running-my-company-2266581.html
About the Author
Derek Cooper is Managing Director of Cooper Matthews - specialists in Business Debt Advice for small to medium sized businesses. http://www.company-debt.co.uk/I-have-personal-debt--What-should-I-do.html
Do you think it should be against the law (and something done about it) for a bankrupt company?
to refuse to sell when a reasonable offer has been made? This is what is happening close to where I live. Along with hundreds of others in the timber industry losing their jobs. Pilgrims Pride stated that they wanted to make the glut of chickens go away so chicken prices could be raised. To me that just is not right!!!
This was in out local paper:
Pilgrim’s Pride’s northeastern Louisiana employees and chicken growers were left in limbo today as the company remained quiet about the latest $60 million offer to buy the company’s Farmerville Processing plants.
State Sen. Mike Walsworth, who has been joining daily meetings of Gov. Jindal’s Pilgrim’s Pride Emergency Task Force, said that there were no new developments today.
Pilgrim’s Pride didn’t return calls or an e-mail requesting an update on the status of the company’s decision.
Meanwhile, the Louisiana Workforce Commission has scheduled a series of meetings on Monday through Thursday for the 1,300 workers who will lose their jobs if the complex is closed as scheduled in April.
The Workforce Commission will also open a transition center on March 24 at the Pilgrim’s complex for the workers, where services such as job placement assistance, job counseling, job search workshops, unemployment insurance and other supportive services will be offered.
All Workforce Commission services are free.
Jindal and his staff have been working to broker a deal for Foster Farms of California to buy the northeastern Louisiana Pilgrim’s operation, with Foster Farms putting up $20 million and the state investing $40 million.
The governor said that Foster Farms would also invest about $50 million in new equipment and agree to keep the work force intact for at least five years.
Pilgrim’s Pride, which declared bankruptcy in December to reorganize, rejected the first $40 million offer from Foster and the state earlier this week, but took the $60 million offer under consideration.
“Discussions continued (Thursday) between Pilgrim’s Pride and Gov. Jindal and his staff regarding the future of the company’s Farmerville complex,” Pilgrim’s spokesman Ray Atkinson said in a written statement on Thursday. “A revised offer was formally presented to the company (Thursday), and several potential alternatives were also discussed. At this time no agreement has been reached and no offer has been accepted.”
State officials said Pilgrim’s executives originally said the company valued the plant at between $65 million and $70 million.
Jackson said the company is closing the complex because of a glut of chicken on the market.
Louisiana Attorney General Buddy Caldwell said this week he is looking into potential violations of Louisiana Unfair Trade Practices Act by Pilgrim’s Pride based on the possibility that the company could be trying to manipulate the chicken market by closing the plants.
Caldwell spokesman Tammi Arender Herring said the attorney general is also investigating whether Pilgrim’s Pride is violating bankruptcy laws by holding up the sale of the complex.
Any truth to this? The Chrysler Closings?
Read this….long but illuminating…
I know that most of you have seen or heard parts of this auto deal!! But you won’t believe what you read that you didn’t know. And it just keeps going.
Chrysler’s Railroad
This could be a scandal of epic proportions and one that makes Nixon’s Watergate or Clinton ‘s Monica Lewinsky affair pale by comparison.
Why was there neither rhyme nor reason as to which dealerships of the Chrysler Corporation were to be closed? Roll the clock back to the weeks just before Chrysler declared bankruptcy. Chrysler, like GM, was in dire financial straits and federal government graciously offered to “buy the company” and keep them out of bankruptcy and “save jobs.” Chrysler was, in the words of Obama and his administration, “too big to fail,” same story with GM..
The feds organized their “Automotive Task Force” to fix Chrysler and GM. Obama, in an act that is 100% unconstitutional, appointed a guy named Steve Rattner to be the White House’s official Car Czar- literally, that’s what his title is. Rattner is the liaison between Obama, Chrysler, and GM.
Initially, the national media reported that Chrysler had made this list of dealerships. That is not true. The Washington Examiner, Newsmax, Fox New and a host of other news agencies discovered that the list of dealerships was put together by the “Automotive Task Force” headed by no one other than Mr. Steve Rattner. Now the plot thickens.
Remember earlier we said earlier that there was neither rhyme nor reason why certain dealerships were closed? Actually there’s a very interesting pattern as to who was closed down. Again, on May 27, 2009, The Washington Examiner and Newsmax exposed the connection.
Amazingly, of the 789 dealerships closed by the federal government 788 had donated money, exclusively, to Republican political causes, while contributing nothing to Democratic political causes. The only “Democratic” dealership on the list was found to have donated $7,700 to Hillary’s campaign, and a bit over $2,000 to John Edwards. This same dealership, reportedly, also gave $200 to Obama’s campaign. Does that seem a little odd to you?
Steve Rattner, the guy who put the list together. Well, he happens to be married to a woman named Maureen White, who happens to be the former national finance chairman of the Democratic National Committee. As such, she would have access to campaign donation records from everyone in the nation, Republican or Democrat. But of course, this is just a wacky coincidence, we’re certain.
Then comes another really wacky coincidence. On that list of dealerships being closed down, a weird thing happen in Arkansas , North Louisiana, and Southern Missouri .
It seems that Bill Clinton’s former White House Chief of Staff, Mack McClarty, owns a chain of dealership in that region, partnered with a fellow by the name of Robert Johnson. Johnson happens to be founder of Black Entertainment Television and was a huge Obama supporter and financier. These guys own a half dozen Chrysler stores under the company title of RLJ-McClarty-Landers.
Interestingly, none of their dealerships were ordered closed – not one- while all of their competing Chrysler/Dodge and Jeep dealership were! Eight dealerships located near the dealerships owned by McClarty and Johnson were ordered shut down. Thus, by pure luck, these two major Obama supporters now have virtual monopoly on Chrysler sales in their zone. Isn’t that amazing? Go look in The Washington Examiner, the story’s there, and it’s in a dozen or so other web-based news organization, this isn’t being made up.
Now if you thought Chrysler was owned by Fiat, you are mistaken. Under the federal court ruling, 65% of Chrysler is now owned by the federal government and the United Auto Workers union- Fiat owns 20%. The other 15% is till privately owned and presumably will be traded on the stock market. Obama smiles and says he doesn’t want to run the auto industry.
As horrifying as this is to comprehend, and being as how this used to be the United States of America, it would appear that the president has the power to destroy private businesses and eliminate upwards of 100,000 jobs, just because they don’t agree with his political agenda. This is Nazi Germany stuff, and it’s happening right here, right now, in your back yard.
There are voices in Washington demanding an explanation, but the “Automotive Task Force” has released no information to the public or any of the senators demanding answers for what has been done. Keep your ear to the ground for more on this story. If you’ve ever wanted to make a difference about anything in your life, get on the phone to your national senator or representative in the House and demand an investigation on this.
Benjamin Franklin had it right when he said, “All that’s necessary for evil to triumph is for good men to do nothing.”
Car Czar No More
An amazing thing happed as this story was going to press. Obama’s Car Czar,
Was it sinful for Obama to terminate 787 Chrysler & 661 GM auto dealers who contributed Republican?
Chrysler’s Railroad
This could be a scandal of epic proportions and one that makes Nixon’s Watergate or Clinton ‘so Monica Lewinsky affair pale by comparison Why was there neither rhyme nor reason as to which dealerships of the Chrysler Corporation were to be closed? Roll the clock back to the weeks just before Chrysler declared bankruptcy. Chrysler, like GM, was in dire financial straits and federal government “graciously” offered to “buy the company” and keep them out of bankruptcy and “save jobs.” Chrysler was, in the words of Obama and his administration, “Too big to fail,” same story with GM.
The feds organized their “Automotive Task Force” to fix Chrysler and GM. Obama, in an act that is 100% unconstitutional, appointed a guy named Steve Rattner to be the White House’s official Car Czar – literally, that’s what his title is. Rattner is the liaison between Obama, Chrysler, and GM..
Initially, the national media reported that Chrysler had made this list of dealerships. That is not true. The Washington Examiner, Newsmax, Fox New and a host of other news agencies discovered that the list of dealerships was put together by the “Automotive Task Force” headed by no one other than Mr Steve Rattner.
Now the plot thickens. Remember earlier we said that there was neither rhyme nor reason why certain dealerships were closed? Actually there’s a very interesting pattern as to who was closed down. Again, on May 27, 2009, The Washington Examiner and Newsmax exposed the connection. Amazingly, of the 789 dealerships closed by the federal government, 788 had donated money, exclusively to Republican political causes, while contributing nothing to Democratic political causes. The only “Democratic” dealership on the list was found to have donated $7,700 to Hillary’s campaign, and a bit over $2,000 to John Edwards. This same dealership, reportedly, also gave $200.00 to Obama’s campaign. Does that seem a little odd to you?
Steve Rattner is the guy who put the list together. Well, he happens to be married to a Maureen White. Maureen happens to be the former national finance chairman of the Democratic National Committee. As such, she has access to campaign donation records from everyone in the nation, Republican or Democrat. But of course, this is just a wacky “coincidence,” we’re certain.
Then comes another really wacky “coincidence.” On that list of dealerships being closed down, a weird thing happened in Arkansas , North Louisiana, and Southern Missouri . It seems that Bill Clinton’s former White House Chief of Staff, Mack McClarty, owns a chain of dealership in that region, partnered with a fellow by the name of Robert Johnson Johnson happens to be founder of Black Entertainment Television and was a huge Obama supporter and financier. These guys own a half dozen Chrysler stores under the company title of RLJ-McClarty-Landers. Interestingly, none of their dealerships were ordered closed – not one! While all of their competing Chrysler/Dodge and Jeep dealership were! Eight dealerships located near the dealerships owned by McClarty and Johnson were ordered shut down. Thus by pure luck, these two major Obama supporters now have virtual monopoly on Chrysler sales in their zone. Isn’t that amazing? Go look in The Washington Examiner, the story’s there, and it’s in a dozen or so other web-based news organizations; this isn’t being made up.
Now if you thought Chrysler was owned by Fiat, you are mistaken. Under the federal court ruling, 65% of Chrysler is now owned by the federal government and the United Auto Workers union-Fiat owns 20%. The other 15% is still privately owned and presumably will be traded on the stock market. Obama smiles and says he doesn’t want to run the auto industry.
As horrifying as this is to comprehend, and being as how this used to be the United States of America , it would appear that the president has the power to destroy private businesses and eliminate upwards of 100,000 jobs just because they don’t agree with his political agenda. This is Nazi Germany stuff, and it’s happening right here, right now, in our back yard. There are voices in Washington demanding an explanation, but the “Automotive Task Force” has released no information to the public or to any of the senators demanding answers for what has been done. Keep your ear to the ground for more on this story. If you’ve ever wanted to make a difference about anything in your life, get on the phone to your national senator or representative in the House and demand an investigation into this.
Benjamin Franklin had it right when he said, “All that’s necessary for evil to triumph is for good men to do nothing.”
Car Czar No More
An amazing thing happened as this story was going to press. Obama’s Car Czar, Steve Rattner, resigned on July 13 and was promptly replaced by former steel workers union boss Ron Bloom.
According to CBS News,
BTW: No one complains when tax-payers who contribute all their lives to support the government have bad periods and receive subsistence.
Likewise, shouldn’t the government help industries in an HONEST manner who gave billions and made it strong?
to refuse to sell when a reasonable offer has been made?
Define a ‘reasonable offer’. Based on YOU figures, a reasonable offer was not made.
Everything Obama has done so far is unconstitutional, & yet congress let’s him get by with it, I think when election times comes, we all should vote them ALL out & put in a leadership that will honor the constitution of the USA. Our political people has shamed the USA for their evil deals. Wake up America.
Did you know that 68% of all statistics are completely made up?
Didn’t link a source, did you? It would be very interesting to actually see the information and read it myself instead of just trusting some anonymous poster.
There are no official “Czar” titles in the White House. This is all something that the media started calling them. And, there is nothing unconstitutional about the President having advisers (which is what these so-called “Czars” really are).
And, here is something else to chew on. Our local GM dealership also owns the local Chrysler/Dodge/Jeep dealership. And you know something? THEY JUST BOUGHT THE LOCAL FORD/MERCURY DEALERSHIP ALSO!!!! There must be some type of conspiracy angle you can come up with for this, isn’t there?