How Could John Burton Race Have Dodged Bankruptcy?
In the tradition of ITV’s “I’m a Celebrity… Get me out of here!”, 2009 saw the bankruptcy of jungle escapee and celebrity chef John Burton Race. Having appeared on the hit television show in 2007, he joined not-so-exclusive group of “I’m a Celebrity…” contestants who have failed to avoid the financial poisoned chalice that follows the programme. As we look back on the past year, financial hardships and the impact of recession have featured heavily and with retrospect, we can see where things went wrong and highlight what we’ll do differently in the future. For many though, 2009 will be entirely summed up by the headlines that forecast financial doom and gloom. If we take the example of John Burton Race, as someone who found bankruptcy to be a solution to their debt problem, we can look at the things that he might have done differently. After all, bankruptcy is the most severe debt solution on the market and although it may be the solution best suited to some circumstances, there are alternatives.
Celebrity chef John Burton Race filed a personal bankruptcy application only two months after his ex-wife Kim was made bankrupt by a creditor application to the High Court for an outstanding debt of £15,000. The couple had owned the Michelin starred restaurant, The New Angel in Dartmouth, which he was ordered by a Judge to liquidate, along with other assets, including the family home and his entire collection of 42 vintage cars. On the 27th of November 2007, while John was still competing with his fellow celebrities in the Australian Outback for the ITV programme, Kim closed the restaurant.
Although John Burton Race was forced to sell the restaurant by the court, it was actually bought by his friend, the millionaire owner of LastMinute.com, Clive Jacobs. This allowed Race to remain at the restaurant as head chef. According to reports from the Insolvency Service, Burton Race declared himself bankrupt in March and as a result, his assets have now been frozen and his creditors will now have to apply to his Insolvency Practitioner in order to be paid. The bankruptcy application does get your creditors off your back in this way, making them direct all correspondence to your Insolvency Practitioner. However, as highlighted by the case of Burton Race, it can also cost you all of your most valuable assets, which are taken to service your debt. If it could’ve been avoided, John would’ve been far better advised to go for an IVA in order to solve his mounting debt problems.
The Individual Voluntary Arrangement would probably have been a better option for Kim too, as she was petitioned for bankruptcy due to an outstanding debt of £15,000, the threshold of unsecured debt required to apply for an IVA. The total debt value also has to be divided between at least three creditors. With an IVA, you’ll not usually have to pay back all of your debts as your creditors will write off a percentage of them. In order to have it accepted, 75% of your creditors will need to be in favour but this percentage is defined in terms of value rather than by creditor headcount. As a homeowner, you’re home will not be at risk as long as you stick to the repayment plan that you’ll draw up with your Insolvency Practitioner. You may need to give up some of the equity in your property to service your debt but your assets are far safer than they would be with bankruptcy.
Talking to one of the specialist debt advisors at Debtsolver, at the earliest sign of impending debt problems, would have helped to safeguard Burton Race’s assets from bankruptcy and liquidation. If you are worried about your financial situation, talk to Debtsolver for impartial debt help and a solution to your personal debt problem.
Related posts:
