The following stories are all true ones as related to the Founder of the Bankruptcy Association either by letter or in person. Only the names of the people involved have been changed.

Mathew

My wife and I are both past retirement age but have been self-employed for most of our married lives. We were franchisees with an overnight delivery company in Plymouth. We operated this business successfully with other members of our family for over twenty years. At the turn of this century we had the opportunity to buy the Bristol franchise of the operation and we decided this would be an excellent opportunity to secure the futures of our family and to also provide us with a pension for our retirement. Together with a personal investment of £50k and bank borrowings of £250k backed with a DTI loan we purchased this franchise and installed one of our sons to manage the operation.

Over the three years that followed we experienced horrendous problems which were completely outside of our control. There were two changes in the ownership of our parent company with inevitable changes in the management structure. This resulted in a serious loss of customers throughout the group, including many from our Bristol franchise which created a loss of turnover to that franchise of around £100k.

To deal with our business problems we sold the Plymouth business and reinvested the proceeds into the Bristol operation to buy time to rebuild our customer base. We also sold our home to our son in order to raise more investment capital and because of rising property prices he sold the house on again to a third party to raise a further £50k.

On reflection, this was a desperate last option to raise more funds to cover our losses. Due to the highly competitive prices in our industry which our parent company is refusing to match, we are unlikely to increase revenue through customer growth in order to stem the drain on our capital which is covering our losses.

We have now decided to call it a day and to put the business into liquidation. Under the terms of our franchise agreement this will automatically cause us to forfeit our franchise and the franchiser will take over the running of the franchise. My wife and I have personal guarantees of £25k with the bank covering the business overdraft. We no longer have the funds to cover this debt. Technically, the remaining funds belong to our son. He has suggested that he uses some of the remaining funds from the business to buy a small flat that we could live in.

After a lifetime of working for ourselves and employing other people it very much looks like we will both have to go bankrupt. We will then have to live on basic state retirement pensions for the rest of our lives.

Christine

I started my own business five years ago in Southwold, Suffolk renting a shop on a six year lease. My partner also wanted to invest in my business so we took on the lease in joint names. I traded successfully for three years but unfortunately I had to move to Surrey for personal reasons and found problems with running the business from a distance because of difficulties such as finding the right staff.

Sales began to dip dramatically so I put my business on the market with an estate agent. They found two enthusiastic buyers willing to give up their jobs and sell their homes in London in order to take over my business. The sale price included the remaining three years of the lease and all the stock and goodwill. I owed money to suppliers but they were more than happy to wait for the sale of my business because I had always fulfilled my financial commitments to them in the past.

A few days before the contract for sale was due to be signed my estate agents received a telephone call from the landlord of my business saying he did not wish to re-assign the lease to prospective purchasers of my business, nor would he be willing to renew it in three years time. In fact, under the terms of the lease the landlord could not legally refuse on either of these two points. But the estate agents passed on the message to the prospective purchasers and the damage was done as the sale fell through. The female negotiator at the estate agent was a friend of the prospective buyers and had therefore passed the message on without my being able to explain that the landlord could not do what he had intimated.

I was then forced to negotiate a sale of the lease to a local businessman at a much reduced rate but because of procrastination by the landlord’s solicitor even this sale fell through. The landlord’s solicitor then had the audacity to bill me for £350 for arranging the re-assigning of the lease. I am now at the end of my tether. My partner has lost all his financial investment and I can now no longer afford to continue to pay the rent and I will soon forfeit the lease as result, together with the opportunity to sell it on.

To the best of my knowledge my landlord is a successful businessman and he is very wealthy. The attitude displayed by my landlord smacks entirely of avarice as he has manoeuvred to force me to relinquish the lease back to him. He has effectively blocked me from selling my business which would otherwise be worth a tidy sum of money. I am now in a no win position with the chips stacked against me. All my savings went into my business and I do not own my own home. I am now just a sitting target waiting for events to overwhelm me and I desperately need some impartial advice about what to do now.