inland revenue and bankruptcy - help very much appreciated!

pencilcase

a bit of background - I'm self-employed, things have taken a turn for the worse and I'm now £55k in unsecured debt and have a 4K tax bill to pay. My current income is about £12K and may drop off at any time. I don't own property or have any assets.

I know that in my circumstances, bankruptcy would be a sensible option, and maybe it would be in the long term, but I know it's a major step and I don't want to be rushed into it. I'm aware that the revenue can make you bankrupt for unpaid taxes, and I'm concerned that they might do this sharpish if I don't make large payments (which I'm not in a postion to do) pronto.

If anyone has been in this situation or can offer advice on how fast things move along, how open they are to negotiation etc. - Also, when it comes to offering them money - I don't know how to proceed - my other creditors are accepting £5 token payments without too much fuss at the moment (ie, I get the letters and some calls, but no heavies round to the house). But obviously the revenue are going to want more than that, which I can't offer at the moment... am trying to get more work, or a regular job as my self-employed work isn't going well, but not sure how long that process will take. How patient are they?

Though having said all this, maybe if they do force me into bankruptcy (which would have to be done as a 'punishment' measure rather than to reclaim money... cos I don't have any....) it would at least take the decision out of my hands. But then again, as I say, I don't want to be rushed into it.

Sorry to ramble - any help appreciated!

fc123

pencilcase wrote: »

Though having said all this, maybe if they do force me into bankruptcy (which would have to be done as a 'punishment' measure rather than to reclaim money... cos I don't have any....) it would at least take the decision out of my hands. But then again, as I say, I don't want to be rushed into it.

Sorry to ramble - any help appreciated!

Don't see banktuptcy as 'A Punishment'....it isn't in most situations.

The bankruptcy laws have changed over the years and all the easy credit had to be balanced with a more humane way of dealing with it if it went wrong.

If you have no assets ~(house for example) and can cope with having no access to credit for a time (which isn't that bad) then I would seek further advice from CAB or CCCS.

ProDisc

I can't speak for IR asking for tax but considering the climate I think things will become more flexible. Its in the governments interest to.
That said and looking at your circumstances I would seriously consider going BR. If your trade is being hit which mine was also, its probably best to cut the losses and move on.
If you still have some work there's more than a good chance you'll keep your vehicle. I did and I was on social after a recurring spinal condition, so they could have quite easily taken mine. Tools they never take.

I can't help with your main concern but I can say that the BR process is not as daunting as it seems. When I walked out of the court house I couldn't explain the relief I felt. It was almost a tremendous adrenaline rush.

Good luck with how it goes but with the current downturn and being self employed you could ride out this recession with a BR and come out of the recession discharged and ready to start afresh. Its an ideal time for someone like us

pencilcase

Thank you fc123 - I phrased things wrongly actually... it's not that I personally would see it as a 'punishment' but more that the IR might decide to make me bankrupt to 'punish' me even though it wouldn't benefit them at all (ie, I've got no assets for them to seize) - unless they want to come and take my filing cabinets and chairs away. Are they likely to do stuff like that? Again, it's not as if any of it is worth anything in terms of resale value. Even my telly was bought for £100 in 2003!

fc123

pencilcase wrote: »

Thank you fc123 - I phrased things wrongly actually... it's not that I personally would see it as a 'punishment' but more that the IR might decide to make me bankrupt to 'punish' me even though it wouldn't benefit them at all (ie, I've got no assets for them to seize) - unless they want to come and take my filing cabinets and chairs away. Are they likely to do stuff like that? Again, it's not as if any of it is worth anything in terms of resale value. Even my telly was bought for £100 in 2003!

If you have the time, there are a lot of personal stories on this board that cover loads of different circumstances. Some have taken the time to write out their experience in court etc.
Could be worth a trawl through and a read as it may help you. Other peoples experiences are always insightful.