Initially, I was not actually being pursued by any lenders. The asset that had been purchased with the loans I had guaranteed (see previous post) was still in the business and could be liquidated but the value had decreased considerably and I knew that the investors were not going to get their money back. I had told everyone my opinion on this, I had consulted two accountants and a liquidator, informed the other Directors and the share-holders but no-one wanted to take responsibility; as long as I kept the other part of the company trading, nothing would ever be resolved. The other part of the business was profitable but so much cash had been diverted to the failing part of the business that it was a month by month struggle to keep operating.
Meanwhile, I had personally acquired over $50,000 worth of credit card debt and personal loans to prop up the cash-flow, and these debts were accruing interest at an average rate of 15%. I was the only Director working in the business and I was not earning enough from the business to cover the interest repayments. In retrospect, I should have declared bankruptcy then but I was offered a fantastic part-time job which paid very well so I started working as well as running the business. It was physically impossible to do everything and the business began to suffer even further as a result. It became an ever declining cycle and, in the end, my second job was paying my interest repayments, the rent for the business, and sometimes even my employee’s wages. This situation had deteriorated over five years and my partner had simply abandoned the whole project and left me to deal with it. I was exhausted and I wanted out. I had separated from my partner but I just couldn’t see how I could fix this mess.
Finally, I went to see an accountant that my friend recommended. This was a turning point. The accountant, Darren, was a straight-talking Aussie bloke who took one look at my financials and asked: “Why don’t you just go bankrupt?”
I was shocked, and relieved. I had wanted, for so long, for someone to just tell me what the hell to do to. From the very beginning, I had had a sense of the sword of Damocles above my head, declining in slow, malevolent increments. I had wanted to seize it and hasten the inevitable so many times but there was always another option, a potential solution. I had held it inches above my crown with sheer bloody mind power for so long and now I finally had permission to let it fall.
NB/ I’m always intrigued by people who write about their terrible financial situations and never explain how they are actually living day to day. I was technically homeless for much of this time. I even went through a horrific period where I was secretly living in my shop. I used to bathe over a bucket and then go off and chair a board meeting. Toward the end, a truly generous friend whom I can never repay, took me in and supported me until I could move back to my home state to live with my parents.
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