My personal bankruptcy

I went bankrupt in November 2005 due to some bad investments in 2002 off plan followed by a few bad business decisions and a dishonest member of staff. It's no secret that in September 2002 I got a bit over excited about reserving lots of new builds and off plans all over the UK. This was partly due to the sudden growth in property seminars and the clever marketing of "Finders" selling property for what appeared to be no money down and instand fortunes to be made. I figured that if I did around 100 of these deals and only made a modest 10k on each one then I could be very wealthy. I could not afford to do this all by myself, and sold my existing London portfolio to fund some of it and took in some investors for the rest.

I share my story because I am not ashamed to admit I was caught out and over ambitious - and if I can help anyone else by sharing my story, then at least my experience was not wasted.

Lots of the developments didnt work to plan and I had some shocking experiences that I share with you in my dedicated off plan section.

Part of the sale of Housemouse and development of leabeven.com was due to the bankruptsy, but also I needed a change and fresh start, and wanted a domain to cover more of what I like to do. The bankruptsy, whilst hard and somewhat embarrasing has had a positive affect on my life - and I am now very anti-credit and anti-gearing. I was discharged in May 2006 and am clear to trade again. A bit more cautiously this time.

It seems to me from my own personal experience that personal bankruptcy is too easy these days. The rise in bankruptcy figures has been high since the beginning of 2005. Could this be a sign of the times?

There seems to be just too much credit available, and too many people advertising credit on TV, Radio, Internet and in other media. The more we are lead to believe we can "live the dream" on other people's money - the worse it could get.

The fact is you need to work hard or smart to make money of your own to get the things you want, and I learned this the hard way. I tried to grow too fast in both the property and web world - taking on staff, offices and commitments that I could not really fund long term but that I was hoping would just take off and make me rich overnight. Now I believe that wealth is a state of mind - and that I didn't really need lots of money to make me happy, I just needed good friends, spend time with my family and enough money to live comfortably with no debts. I could not ask for anything better than the group of friends I have now.

If I could do it all again (and it feels a bit like a second chance now) then I would keep it small - I should have used the money I made in investing when I sold of my first portfolio to pay off mortgages on smaller properties, and create a passive income from rental income and websites.

As far as the admin side of the bankruptcy, I found it to be very easy. You just fill out the forms and go to court pay your bankruptcy fee (around £300), and it is done. I had to make two visits to the official receivers office in Chester and take all my paperwork - and that was all. 6 months later I was discharged.

It's a hard question to answer when people ask me if I agree with people going bankrupt, because I really think it depends on the circumstances. Someone that does it on purpose and rips people off I dont agree with. I did not want to go bankrupt and fought against it for a few years - pushing harder and harder to earn more money to cover the empty property and mounting bills. I only took down large lenders (who really should not have lent on the properties in such volume) and a very few investors. I did my best to negotiate and pay off as many investors as I could.

I'm going to present to you a few short stories about some of the things I remember about the off plan investing I did in 2002. It took 3 years to clear up the mess and only now in 2006 and I finally free of it all.

I am not sharing this with you to show you how stupid one person can be (because that is obvious) - but more so that other people can learn from what may seem like obvious things, but ended up being very costly mistakes that I made. I hope that you can learn and NOT loose money in off plan and new builds like I did. I estimate that I lost over 500k by badly investing for a 3 month period and then taking 3 years to clear it all up. Before that short period of stupidity my investing was very profitable.

Whilst it would be great to blame everyone else (Valuer, Finder, Seminar company, Estate Agents etc) - it has to be said - it was me (and some other *investors) that bought them!

*for confidentiality I have not included other investors or figures into the stories unless I have express permission despite most of them being joint ventures - these stories are all based on my own personal finances and experiences.