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Max Lowry
Max Lowry, Advocate
Category: Bankruptcy Law
Satisfied Customers: 1457
Experience:  LLB, 10 years post qualification experience
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ot sure IVA or Bankruptcy. Feel that company advising is swaying

Customer Question

ot sure IVA or Bankruptcy. Feel that company advising is swaying to IVA due to their fees. They say Bankruptcy will effect my career and IVA is softer blow. I cant see why? Need assistance to help me select right option.

Currently have disposable income of £150.00 then going to £650 in seven months. Therefore means huge cost implications on the IVA in seven months for long period of time. Only real issue is I am a personal licence holder for a hotel I am General Manager for and they advise if I declare bankruptcy, I will not be able to hold this position.
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  Max Lowry replied 3 years ago.
Hi, welcome to the site. My name is XXXXX XXXXX I will help you with your question. Why do you feel an IVA is not in your best interests considering your occupation? Have you spoken with any other professional insolvency practitioner about your options? Do you own a property? How much are your debts?
Customer: replied 3 years ago.

Hi Max


 


I am being advised by an online copmany regarding my circumstances.


 


Debts are in region of £120K. Massive negative equity in a property that was repossessed.


 


Being advised IVA is best solution. However, as mentioned, concerned of length of time to complete and dramatic increase to monthly payments for four years of £650 per month.


 


I currently have no assets anymore.


 


Every company seems to push to an IVA rather than bankruptcy.

Expert:  Max Lowry replied 3 years ago.
Thank you. How important is being a licence holder to you? I don't see any problem with being a general manager but that will depend on your employer but your licence will lapse if you become bankrupt.
Customer: replied 3 years ago.

I suppose it can be assigned to another member of the team. I am just wary of the reaction of my directors if I am declared bankrupt. Not sure of best route. My current role is to manage a £3million a year business, if bring to attention of directors worry their view on me will change.

Expert:  Max Lowry replied 3 years ago.
Can I backtrack a little please? Are you a personal licence holder for a bar? Who holds the premises licence? Thanks
Customer: replied 3 years ago.

Hi


 


I am the designated premises supervisor for a 80 bedroom hotel, serving alcohol throughout. I hold a personal licence.

Expert:  Max Lowry replied 3 years ago.
Ok thanks. You are probably aware that if you go bankrupt you can continue holding a personal licence but you cannot be the DPS but this can be transferred to somebody else. If you are in an IVA neither the personal licence or your position as DPS will be effected.

Is there anybody you can speak with at work (HR) in confidence about what would happen to your position/how it will be looked at by the employer if you were bankrupt? I get the feeling you are swaying towards bankruptcy as this will write off all your debts but remember you usually have to declare a bankruptcy on application forms and especially insurance application forms etc. An IVA, whilst still registered against your name and on your credit file will not be as harsh. Yes, you will have to pay the fees of the nominee and supervisor but they all charge differently and you should probably shop around and get various quotes. Bankruptcy will certainly draw a line under the debts but should have less impact in respect of your employment and your position as DPS. Also, it may be worth phoning around smaller insolvency practitioners to see how much they charge for an IVA - they have different fees for these.
Customer: replied 3 years ago.


How long does a bankruptcy last, it it correct 12 months and will I be allowed to be DPS after this period?


 

Expert:  Max Lowry replied 3 years ago.
Bankruptcy will generally last 12 months providing you cooperate with the Official receiver. After discharge you will be apply to apply to be a DPS. This will have the usual criteria required to be a DPS. Bankruptcy will not effect your application. The police will not be interested in your bankruptcy either. They are only concerned with criminal convictions. You would need to satisfy yourself that your employer will allow you to go back to being DPS.
Customer: replied 3 years ago.

So in my case if the employer is accepting of the bankruptcy is a better option than an IVA?


 

Expert:  Max Lowry replied 3 years ago.
Yes, based on the circumstances you have described, if your employer is not concerned about bankruptcy then this sounds like the best option. If the employer is concerned about bankruptcy the IVA is the way to oh but get some quotes first.
Customer: replied 3 years ago.

Hi Max, have opted for bankruptcy but dont know where to turn to do sort this. Do I need to use a specialist to do this for me


 

Expert:  Max Lowry replied 3 years ago.
Ok, you’ve done one of the hard parts and decided on the way forward.

It’s not actually difficult to go bankrupt – you can do it yourself. Fine out your local county court https://courttribunalfinder.service.gov.uk/ and give them a call to make sure they do bankruptcy work.

You need to complete Forms 6.27 and 6.28 in full and take 2 copies of each with you to the Court at the time and date previously agreed with the bankruptcy section. The forms can be found at the following link. Also download the guidance form to Form 6.28.

You will need to take the fee with you at the same time you attend Court. The total is £705 (£525 for the Official Receiver’s deposit and £180 for the Court fee). If you can’t afford to pay the fees there might be a charitable trust in your local area that could help you. You should call your local Citizens Advice Bureau to see if they can suggest one.

I hope this helps. Please let me know if I can clarify anything for you.
Customer: replied 3 years ago.

Hi Max, your advise has been great thank you. I have come home from work and have been sent a letter to say that the RBS wants to serve a Bankruptcy petition. They are using a solicitor. He wants to come on Tuesday. Do I simply proceed with this, will this prevent costs to me and will it be easier to deal with?

Expert:  Max Lowry replied 3 years ago.
You are welcome. Absolutely, you don't need to fill any forms or pay any fees. The bank has got there before you. It really doesn't make any difference to the outcome if you do the petition or the bank does it for you apart from the cost saving for you. Let me know if I can help further.
Customer: replied 3 years ago.


you are giving a lot of advise and want this to continue, can I add extra fee at the end? Next question would be what is the process that is now going to follow? i.e. what happens once the petition is served?

Expert:  Max Lowry replied 3 years ago.
Hiya, you can accept the the answer which means I will get a fee. The question will not close and you can continue asking me further questions relating to this.

Once you have been served with the petition you will see that it will have a hearing date for the bankruptcy. You can go along to court on that day and the judge will ask you whether you understand what is happening. If the judge is satisfied the petition is correct and a formalities have been complied with he/she will make the bankruptcy order. After this, you will be contacted by the Official Receiver who will probably ask you to attend an interview to go through your finances. After 12 months you will be discharged from bankruptcy unless it is a complex case with lots of assets (which you have already said it isn't).
Max Lowry and other Bankruptcy Law Specialists are ready to help you
Customer: replied 3 years ago.


Seems straight forward enough. What is the likely event of me having to pay money into the bankruptcy each month. Although I earn a good salary, my disposable income at the end of each month equates to around £150 and then I am in addition going through a divorce and have to add these costs into it as well.

Expert:  Max Lowry replied 3 years ago.
Thank you for the rating.

It's quite possible you could be asked to enter into an income payments agreement which would last for three years. I suppose if you can show that your disposable income is is quite low as you will be paying substantial divorce costs. The lower disposable income you can show and hopefully prove, if required will mean either no income payments agreement or lower monthly payments.
Customer: replied 3 years ago.

Hi Max, further question to you. I have spoken to a licencing legal executive who says that I am not the personal licence holder I am simply the designated personal supervisor. DPS. which would not be effected by the bankruptcy. Can you confirm if this is correct?


 


 

Expert:  Max Lowry replied 3 years ago.
Hiya, I confirm as DPS you should be the named as the premises licence holder and upon bankruptcy the premises licence will lapse.
Customer: replied 3 years ago.

Hi Max


 


Sorry, this continues. Do you need me to open a new question on this? Below is her response. Please advise me.


 


I have had a good look at The Licensing Act 2003 and as I said yesterday there is no need for you to worry it is the licence holder who cannot hold a licence if declared bankrupt rather than the DPS, Squire Hotels are the licence holders. See paragraph below. The only time that a Personal Licence can be revoked is if you commit a relevant offence. I can let you have a complete list of relevant offences if you like but I think it unlikely that you will commit any of the offences any time soon.



Licensing Act 2003


Duration of licence


26 Period of validity of premises licence


(1) Subject to sections 27 and 28, a premises licence has effect until such time as—


(a) it is revoked under section 52, or


(b) if it specifies that it has effect for a limited period, that period expires.


(2) But a premises licence does not have effect during any period when it is


suspended under section 52.


27 Death, incapacity, insolvency etc. of licence holder


 

Expert:  Max Lowry replied 3 years ago.
Thanks for this. Can you tell me which local authority deals with the licence? I don't need to know where you live or work but just the name of the local authority please.
Customer: replied 3 years ago.

Ribble Valley. (Lancashire)

Expert:  Max Lowry replied 3 years ago.
Ok, I've checked the Ribble Valley website - unfortunately it gives little information about what happens to the premises licence if you go bankrupt. Some local authority websites have better guidance.

Section 27 of the Licensing Act 2003 makes it clear that a premises licence will lapse on insolvency. You therefore need to check whether you are the personal licence holder and/or the DPS. You confirmed earlier on that you are both the personal licence holder and the DPS. If this is correct your personal licence is fine if you go bankrupt but the premises licence will lapse. The premises licence relates to the DPS.
Customer: replied 3 years ago.

These things are definately not straightforward. I have checked, I am only the DPS and not the premises licence holder, the company is. I have just had this confirmed. So are we saying this is okay?

Expert:  Max Lowry replied 3 years ago.
Ok, if you are not the premises licence holder you have nothing to work about and yes, it is ok to go bankrupt. Can you just check with licensing at Ribble Valley tel no. 01200 414454. They will have a copy of the personal licence as well as the premises licence. But if you are not the premises licence holder you will be fine.
Max Lowry and other Bankruptcy Law Specialists are ready to help you
Customer: replied 3 years ago.

Hi Max, the council have confirmed the following:


 


The Premises Licence is in the name of Squire Hotels Limited and you are named on the licence as the Designated Premises Supervisor.


 


This is then okay? Sorry just want to be double sure.

Expert:  Max Lowry replied 3 years ago.
Ok got it. The Business is the premises licence holder. You are named on the licence as the premises supervisor - the DPS. In these circumstances it makes no difference whether you go into bankruptcy, your role as DPS is legally not effected. If you held the premises licence in your name, which you don't then it would lapse on bankruptcy.

I think/I hope we've got to the bottom of this one👍
Customer: replied 3 years ago.

Perfect, thanks Max!!!

Expert:  Max Lowry replied 3 years ago.
Anytime! Good luck

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