# Should business debtors be able to avail of debt settlement?



## Brendan Burgess (20 Nov 2009)

15.[FONT=&quot]              [/FONT]Should a debt settlement scheme be limited to consumer debtors, or should small business debtors also be included?  Alternatively, should limits on access be based on the amount of over-indebtedness of an individual rather than on an individual’s legal status? [Paragraph 5.142]


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## lion_bar (9 Dec 2009)

Why not?  For lots of small business, personal debt & guarantees,( the "family home", credit cards, personal overdrafts etc) would have been used to get the business up and running and kept running.  

While that isn't the best example of financial planning, i think in reality for small business there is a very real overlap between personal and business debt.


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## onq (9 Dec 2009)

I think that, given the level of profitability of the banks and their indebtedness to the Irish Taxpayer [including businesses], settlements are appropriate all across the board.

ONQ.


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## jack2009 (9 Dec 2009)

I dont think business debts should be included unless it can be demonstrated that the business is insolvent.


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## Brendan Burgess (3 Jan 2010)

Hi jack

It would be the person who is insolvent, not the business as such. 

If a business is operated via a limited company, then this issue doesn't arise. The company is put into liquidation, and usually the owner of the business will have no further liability. 

If the person is a sole trader, then all his assets, personal and business, are available to the creditors. 

I can't think of any arguments for not allowing insolvent business people avail of debt settlement.


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## Liquidator (12 Mar 2010)

Before a company is put into liquidation it oftern goes through a period of corporate recovery to see if the business is salvageeable.  As part of this process a scheme of arrangements will be set up.

This is where the examiner will offer creditors a % of debts or an extended payment scheme in return for leway.  This is accepted as most creditors know they will recieve nothing from a liquidation


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## Joey99 (17 Mar 2010)

I also cannot see any argument in favour of excluding business activities from debt settlement. Existing bankruptcy laws don't differentiate between someone who goes bankrupt because they've been playing the horses (consumer debt) and because their shop has gone bust (business debt)


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## jack2009 (17 Mar 2010)

Brendan said:


> Hi jack
> 
> 
> I can't think of any arguments for not allowing insolvent business people avail of debt settlement.


 
What about a business that fails to keep proper books and records and perhaps should have ceased trading x months prior and not ran up additional debt in an "irressponsible/dishonest" manner?


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## lilliesmom (22 Mar 2010)

to go into liquidation costs money if you don't have any you can't liquidise.
i personally guarenteed my business loans and they come with me long after the business is gone.i work full time to pay them while my partner supports me.i was a limited company,this means nothing if you have personally guarented your loans


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