It can be difficult running a business as a sole trader. You need to be generating fairly significant revenue in order to generate a profit after your expenses have been paid. Given that you do not have the protection a company affords you it can be catastrophic for you personally if the business starts making losses and you can’t turn it around.
We were recently engaged by an individual (let’s call him James) who had previously operated a building and earthmoving business as a sole trader. The business had ceased trading after becoming unprofitable and James had a couple of residual business debts he couldn’t pay in full. We assisted James to settle two of his major debts.
Negotiating with Judgement Creditor
A very large trade creditor that had supplied James’ business with various materials was owed $150,000 and had obtained a judgement against James for this amount. Their next step would have been to issue a bankruptcy notice and eventually a creditor’s petition to try and bankrupt James. After some negotiations we were able to settle the $150,000 debt for $25,000 paid within a month. The amount of $25,000 ultimately represented what David could afford when considering other debts he had to pay.
Negotiating with a Bank on a Shortfall Debt
A major bank had previously repossessed an asset owned by James that they held security over and sold it, at what James considered to be a serious undervalue. As a result of this the Bank was still owed a shortfall of roughly $37,000. After some protracted negotiations, which involved us pointing out to the Bank the issues surrounding what James considered to be an undervalued sale of the repossessed asset, they agreed to receive $7,500 in full and final settlement of their shortfall debt. This was again paid over a month by James.
By proactively dealing with his business debts James was able to settle his debts for far reduced amounts and avoid bankruptcy as a result. James is just one of the many clients we have assisted in dealing with their debts and gaining financial freedom.
If you are struggling with debts and concerned about bankruptcy get in touch on 1300 4 CACTUS or send us an email at firstname.lastname@example.org to have a confidential discussion today.