Bankruptcy - Does This Mean The Person No Longer Has To Pay An Individual What They Owe Them?

[joko]

My old boss still owes me money, for wages, and lates fees and interest - and he has asked me many times to wait until the money is recouped and then he will pay -(the money is trickling in little by little)
I have threatened him with legal action, and his response is that, i can that but if i do he will just have to file for bankruptcy, as he has no money to pay me.

If he files for bankruptcy, does that mean i am just supposed to forget what he owes me?
Does this mean he no longer owes me money?
he seems to think that it wipes all his debts out.
He owes me £10,000+

Thanks

[Peter Pedant]

well the short answer is yes he doesnt ( owe you money or need to repay ) ( if he goes bankrupt)
but....
it is more of a pain for him than either of you realise

[Flonska]

This may be helpful:-

https://www.gov.uk/your-rights-if-your-employer-is-insolvent/claiming-money-owed-to-you

[EdmundD]

If he is declared bankrupt then any assets he has can be used by the Receiver to discharge debts. Whether you would be a preferred creditor would up to the Receiver

[jennyjoan]

I know 3 people at the mo who have been declared bankrupt. Still life goes on with them buying a new mobile home, holidays abroad, new cars and state of the art mobile phones. I can't work bankruptcy out at all.

Years ago if you were declared bankrupt you literally hadn't a pot to p$ss in.

[Peter Pedant]

thanks you two -
oh point out that if he is threatening bankruptcy and trading....

then he is trading whilst insolvent which is a crime
( fraud on creditors ) that might focus his thoughts on paying you

[Flonska]

Jenny . . . if someone is made bankrupt since 27th March 2006, they are automatically freed from bankruptcy (known as "discharged") after a maximum of 12 months.

[Buenchico]

Does he run the business as a sole trader or through a limited company?

If he's operating as a sole trader then he almost certainly wouldn't rush into bankruptcy as that could mean him losing his home (unless, of course, he only rents it).

If he's running a limited company then it would be far easier for him to declare insolvency (leaving creditors, such as yourself, with possibly only very small amounts to be paid to them), as the company's debts are nothing to do with him personally.

[Peter Pedant]

I voted against an IVA for 20p in the pound
(so for every £100 I would get eventually £20)
and said the debtor should go bankrupt ( motion defeated at creditors' meeting )
and the debtors husband went bananas and said he knew where I lived ( easy one - next door)
so clearly for some it is not looked on as an easy option

aged 25, they had managed to get thro £29 000 of other peoples money ( not all mine of course )

[jennyjoan]

Flonska - thanks for that cos that is what has happened - one of them did tell me that "his year was up" - I hadn't a clue what he meant - now I do.