Is my limited company responsible for my personal debt?

ireneroderick

Hi,

I am currently in a debt management, trying to pay off about £20k in debt.

I am also the director of my own company (I incorporated after I started my debt management program) of which I am primary shareholder.

Could anyone advise as to whether my company profits can be held against my personal debt?

Irene

Barbeduk

I think this is one for an accountant. Would imagine it's only your taxable income that they would look at, so your monthly salary plus any dividends.

Hope someone more knowledgeable will be along soon.

HappyMJ

ireneroderick wrote: »

Hi,

I am currently in a debt management, trying to pay off about £20k in debt.

I am also the director of my own company (I incorporated after I started my debt management program) of which I am primary shareholder.

Could anyone advise as to whether my company profits can be held against my personal debt?

Irene

You own all the shares of the company so they could use those assets to sell to offset your debts. However, unless you are going BR they won't do that. If you are thinking of going BR then sell the shares to a trusted friend and then resign as company director with your friend taking over that role. You can continue to work for the company as an employee and the trusted friend can be the director and sign off anything required in that role. You wouldn't be able to take advantage of dividends to reduce your tax liability but you can take a larger salary instead and pay PAYE taxes on that. Once you are clear from BR you can buy the shares back and your friend can resign as company director and you take over that role again. but.....none of that is necessary on a DMP.

ireneroderick

Thanks to all of you for your helpful advice!

I won't be filing for BR, will continue with DM.

Thanks again!

Irene