Ltd company

[grtforestry]

I have recently started a new employed job after my first stint of self employment came to a crashing end. In 2012 I took out a big loan and jumped in balls deep with a tractor, timber trailer, firewood processor and a winch. 1 month after doing this it started to rain and didn't stop till what felt like 2013. Ended up having to sell all the gear making a loss on most of it due to not being vat reg, to try pay the loan back. I am now back to zero and only have a some van finance left. I was talking to a guy at the weekend who said my mistake was that I hadn't gonna ltd, when I asked what he ment he said if I had been ltd and I saw things were going bad I could of sold all the gear defaulted on the loan declared my self bank rupt and walked away with out having to pay any loan back and with them being able to take my house. Then start up again. I have heard of things like this going on before but I wondered its right or legal to this?

 

 

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[felixthelogchopper]

Right and legal aren't necessarily the same thing.

[scraggs]

Ahh he is one of those people without any scruples, far too many of those about now days sadly imo

Certainly not right as far as i'm concerned, having been ripped off by someone who it turned out done that on a regular basis.

Edited April 29, 2014 by scraggs

[Ian C]

In theory yes, in practice not quite as simple as that. You did the right thing as the finace company will still have trust on you.

 

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[Tom D]

You can't just start up again if you have been bankrupt, you are not allowed to be a director of a ltd co. if you have been declared bankrupt, neither will you be able to borrow any money, also many banks and finance companied will ask for a personal guarantee anyway, mine have.

[Ian C]

You can't just start up again if you have been bankrupt, you are not allowed to be a director of a ltd co. if you have been declared bankrupt, neither will you be able to borrow any money, also many banks and finance companied will ask for a personal guarantee anyway, mine have.

 

So have mine and the bank for the overdraft. In the old days you could probably get away with that sort of thing but not now.

 

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[Al Cormack]

Even as a Ltd company a bank will want a directors guarantee for the loan, so you can still lose everything.

[scraggs]

Not sure if it's still done but some finance houses will ask for a personal guarantee from limited company directors to cover against this happening to them

Edit: beaten to it

[swinny]

Great way to think (op)

[StephF]

Legally the 'LTD' co is liable for the debt not you personally, but you have to be a pretty hard nosed person to live with fact that you let so many others down when you did not pay what you owed them. Then there are a lot of future problems if you want to continue in business.