Brand New Here - Please Help Me!

tadsa

Hi

I'm self employed within a Partnership with spiralling debts which have just gotten worse with the Inland Revenue demanding payment of £4200 NOW plus VAT going back over a year. My business is within recruitment which as you can imagine is unbearably difficult at the mo. I would estimate that we owe in excess of £30000 with no prospect of being able to pay it off the way that things are going. We are seriously considering Bankruptcy and would dearly love some impartial advice.

Loads of questions that I really would like some help with:
1. The car issue comes up a lot, I'm sure. We have a 9 year old Renault Scenic that I need for making regular trips 20 miles away (not far but we live in a fairly rural place with bad bus services). I also have a child to get to school - only 30 mins walk away though so not sure if this will count. I need to keep the car! What do you reckon?

2. We are currently renting and have not ever missed a payment. My worry is that going BR will highlight the fact that we are under occupying the house and that the rent will not be an allowable expense. We are in a 4 bed house - we use the 2 bedrooms as usual and converted both of the others into office space so that we could work independently of each other. If we move, we would need at least a 3 bed so that we could continue to work from home. Do you think that they will ask us to move? If so, should we do so now? Is there often a bankruptcy clause in tenancy agreements forcing us to move out?

3. What happens to your income once you are declared BR? Might seem like a stupid question but I'm new to all of this. For example, the sort of work we do could mean that all of a sudden we have £6K coming in - does all of this amount get taken from us? What if we earn £20K all of a sudden (in my dreams but you never know)

4. My son is in private school. We had very personal reasons for doing this - neither myself or my Partner came from Private School but my son needed the small class size to thrive (I don't want to go into more detail) and to take him out would be absolutely devestating for him. Has anyone had any experience of this and if so, how was it resolved? I'm thinking of talking very openly to the school to see if there is some way round removing him given that we will be paying the fees once more once we are discharged.

If anyone can shed any light on these issues I would be so grateful. I'm sure I'll think of many more questions too.

JCS1

Please speak to business debt line - a partnership is dissolved when one or more partner is made bankrupt. The OR will write to the other partner and ask them to account for any assets, etc.

tadsa

We are both intending to go BR. We are Partners in business and also in life! Can we not trade any more?

JCS1

think you could trade as self employed but not a partnership - to be honest, it's not an area I know that much about (only dealt with a few partnerships and none of those wanted to continue trading) so business debtline in the morning will be best.

Rictina

Hi there, Im so sorry to hear of your situation.

Firstly, you mention that your self employed is it a Limited Company, or are you a Sole Trader ?

Have you taken any proffesional advice from any debt management companies, as it is free & they may be able to help you ?

If bankruptcy is the correct road for you to go down, then with regards to your car, I dont know how much it is worth but the rule of thumb seems to be that you keep your car if it is worth around £2k ish. Also if you ssay that you will need your car for your work or to seek new employment, this again seems to be looked on as favourable.

I doubt very much that you will have to move house. I am currently renting a 5 bed det house & I have no children. I just said thats all I could find, which is actually true !

Regarding your income, this will be looked at & you will most likely be looking at an IPA depending on your income & expenditure.

As for your Sons School, I honestly dont know how they would look at it, due to me having no kids or gone through the experience.

Please dont get down beat about all this, I know its easy for me to say but there is a light at the end of the tunnel for everyone.

I was in Construction & had the world, then the economy did a nose dive & it was all over.

Hopefully there will be some experts along shortly to offer you some more support & info.

Best wishes.

tadsa

I know that the phrase "IPA" keeps coming up but I confess that I don't know what it means! Could you please tell me? Thanks for your message Rictina - really supportive and really useful to know there is someone out there

tadsa

Sorry Rictina - forgot to add - we are not a Limited Company - we are a Partnership. I've taken some advice from the Insolvency Service but I forgot to ask some things!

Construction / Recruitment - between us we have surely picked two of the worst industries for the current climate!

Rictina

Hi there, an IPA is an Income Payment Agreement.

Rictina

tadsa wrote: »

Sorry Rictina - forgot to add - we are not a Limited Company - we are a Partnership. I've taken some advice from the Insolvency Service but I forgot to ask some things!

Construction / Recruitment - between us we have surely picked two of the worst industries for the current climate!

I got a lot of info from phoning a lot of Insolvency Practioners, they will offer you a great deal of free advice.

Yes, Construction / Recruitment hey ! It was great when the going was good, but now, well what can I say !

Take care.

charliedavis

I had a son in private school, CCCS advised I would NOT be allowed to keep him there. I made token payments for a couple of months to creditors, then had no choice but to go BK just as he wass finishing his GCSEs a fortnight ago so the school are now one of my creditors. Private school will definitely not be allowed under bankruptcy, but CCCS said it was allowable under a DMP. Hope that helps.