Consequences to other members of a partnership if one goes bankrupt

A

Alphashark

Registered User
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Dear all,

Say a partnership of family and friends was formed (joint & several personal liability) and borrowed heavily for development.

All assets of the partnership were sold in cooperation with the bank. Multi million debt remaining. All partners under water personally separate to this debt. Some still have personal investment properties with same bank, but in process of selling all. Bank now seeking proposals from each individual.

Partner considering the move has no assets at all, with an irregular income that doesnt cover costs of living.

If one partner files in UK (or elsewhere), what might this trigger in relation to the other partners, and the banks approach towards them?

Kind regards,
A.
 
Alphashark said:
Say a partnership of family and friends was formed (joint & several personal liability) and borrowed heavily for development.

If one partner files in UK (or elsewhere), what might this trigger in relation to the other partners, and the banks approach towards them?
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You mention that all are jointly and severally liable, that would mean that in the event of one going bankrupt the rest will be liable, and if they are a mark the bank will go after them. Do the others have assets? They might consider their own bankruptcy if necessary. And it's looking to me increasingly likely that Irish bankruptcy will be an option soon.
 
If it's a partnership, all partners are jointly and severally liable.

If A goes bankrupt, the bank must stop pursuing them.

But B,C,and D continue to be liable, jointly and severally for the entire debt.

Brendan
 
Thanks for the responses.

Remaining debtors would also be insolvent, I was just wondering if anyone had experience of the banks taking vindictive action against remaining debtors as a result of one going bankrupt?
 
Alphashark said:
Remaining debtors would also be insolvent, I was just wondering if anyone had experience of the banks taking vindictive action against remaining debtors as a result of one going bankrupt?
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Well if they are insolvent there is nothing the bank to get and it doesn't matter if the bank persue them. Are you sure they have no assets, a family home even?

I'm not sure if banks are vindictive, I've seen them being stupid and pursuing people when it's pointless, but vindictive doesn't make sense. It's very costly to got to court.

What is it you think they bank might do?
 
Alphashark said:
What is it you think they bank might do? - Force into bankrupcy also?
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I think the bank will not waste their time, and more importantly their money on any legal procedures. Unless they believe/know/think the person is hiding assets there is no sense in them proceeding. Are you hiding something ? You seem awfully concerned for someone who is insolvent?
 
It's better for the partnership to take advice on this.

They can probably get a deal from the lender without needing to go bankrupt.
 
Are you hiding something ? You seem awfully concerned for someone who is insolvent?- If only, I am the candidate for br in UK, definitely not hiding assets. Concern is for other partners incl family members, as to whether my filing in the uk would bring down all the fury of the bank on them.

They can probably get a deal from the lender without needing to go bankrupt - Have advice but bank dealing with partners individually now due to range of personal situations, all under water though. Have been dealing with bank for 5 years now, and want an end rather than another 5years or 10. No reason for bank to do deal with me as I have nothing to offer. They are likely to request agreement to a judgement, and then leave it hanging in the hope I have a windfall.
 
Based on what you've posted I agree with your UK bankruptcy being the only option. You are correct, this nonense of waiting around, 5 years so far, needs to end, you are correct, it will go on for anther 5 to 10 years if you do nothing, you have zero, you can offer the bank zero, and you can offer the partnership zero. It's just you've seemingly got to rock bottom, or reality, take your pick, first. Sounds like the rest of the partnership needs to get where you are too. That's the problems that partnerships bring when things go sour and an economy tanks.

One thing I do recommend, tell the other partners what you are doing.
 
Hi Alpha shark, I think maybe the others aren't getting your point but maybe I am, are you afraid that the bank may force the remaining partners, ie you, into a bankruptcy, your worry being that you MIT lose your job on top of everyone else as certain professions cannot be practiced by a bankrupt? Or more basically that you have to put food on the able for a family?
we haven't seen the bank vindictively make anyone bankrupt yet. And they will want you to be working in the hope of making some few bob out of you. But be careful, there is an interesting thread on this forum somewhere which discusses the timing of a bankruptcy when a group of partners goes one by one and if the fresh distribution of a share to the remainders is a fresh new debt every time not covered by an earlier bankruptcy. Does anyone have a comment?
 
Thanks Cantalia,

There is one of the partners affected if he files, but my concern is more general that the bank will go nuclear on all the others, incl family members.

Redistribution of bankrupts debt wont apply as its joint and several, and all are under water anyway.

Thanks all for the feedback.
 
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