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Background
The baker has a large business
making bread, including speciality bread and supplying it
to both trade and general public. He employees 20 staff and
has 10 vans. The equipment he uses is high value, as it is
specialised for making bread in large quantities.
He has found that now the major
supermarkets are expanding and have bakeries instore. Due
to this he cannot compete as although they do not offer the
wide range that he does, the supermarkets can sell their ordinary
bread cheaper than he can. He feels his sales are dropping
daily and due to the large overheads that he has is worried
that he cannot repay the level of debt that has built up.
He has a large amount of equity
in the home he owns jointly with his wife. They have recently
had a baby and he has a child of 4 years old. He is worried
what would happen to his family if he is forced to close his
business and made to leave his home. He has other assets that
could be sold, but is worried as the value of these would
not repay his creditors in full.
Having now read the section on
personal insolvency, he knows that his home is protected as
long as his half share of the equity is raised. He realises
that he has the option of proposing an IVA, or declaring himself
bankrupt.
Now he knows that he can take positive
steps to alleviate the situation, he is looking at his options
of downsizing the business, whereby some of the business assets
are sold and money paid into an IVA, he could continue to
trade on a smaller scale, concentrating on making speciality
bread, or accepting PAYE employment in one of the supermarkets.
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