Impending Bankrupcty

Neslein_2

Hello,

After what feels like a life time of money problems it is finally happening, I will be filing for my own bankruptcy. I am a self employed joiner and a couple of years a go I fell behind with VAT & self assessment payments. Despite numerous efforts in this time trying to negotiate time to pay arrangements, and last January attempting to enter into an IVA with the HMRC and a couple of small creditors I had a letter through the door stating that HMRC were trying to levy my goods against distraint & file for my bankruptcy. I was aware that this might have been an option but I was always hopeful that an IVA agreement could happen, because although the debts which have accrued are significant I still feel like I need to paying at least some of them back.
The figure which HMRC are chasing is estimated at 67k, however due to a very difficult year last year I have yet to file the 11/12 self assessment form and VAT returns from 01/12 onwards. I am currently in the process of getting these finalized so that the amount they are chasing is accurate and not an over inflated estimate.
Since the beginning of 2011 my business had slowly been declining, between my sole member of staff costing me a lot more money than he earned me, and a factoring facility which always conveniently had excuses about why I wouldn't be receiving money. After firing the member of staff and trying to establish how I could move away from the factoring facility I reduced the size of my workshop by 40% in October 2011 to try and reduce my outgoings. I also departed with my accountant which has meant that my returns are late. Things continued to slowly decline until in December 2011 I had letters from HMRC asking for payments or threatening bankruptcy. It was then that I had sought help from a company who assisted me into trying to enter an IVA. At this time I did also have a couple of small credit cards which I was in a repayment plan with, but they are small figures compared to HMRC. As I previously mentioned this IVA agreement was declined. Nothing further happened from HMRC at this point. 2012 was an immensely stressful year for me. My partner and I moved rented accommodation in January, but not without several issues from our new landlord. I managed to split ties with the factoring facility but this lead for a very difficult few months until my customers accounts were due to be paid, as I dealt with trade customers they were all on 30 day accounts as with the factoring company. Finally in June after having issues with my business landlord I took the action if finding a new premises for my business. When I shrunk the workshop she took the liberty if increasing my rent also, so how much I was intending to save was much lower than I had hoped. In August I moved in to the new premises and by the end of the month my old workshop was empty. In November my Mother moved from the family home into a rented flat, with no help from the rest of the family it was just her and I doing all of the moving. For the rest of the year and up until only last month most of my spare time was spent moving and throwing away 25 years of accumulated junk in my Mothers old house. As soon as that was over I turned my attention onto my returns to try and get them up to date and filed so that I could try and work out a repayment plan. This just happened to coincide with the letters from HMRC threatening me with bankruptcy. After several attempts to try and speak to the field officer who dropped letters through my door I finally contacted him and he has given me time to complete the returns. In the mean time I have contacted step change who have been a brilliant help, today I had my phone appointment with them to discuss my options. I'm sure this will come to no surprise to anyone reading this now that my only option is to file for bankruptcy. I am now sitting here shocked as I had always thought that a deal could be worked out with an IVA. This all happened today and since getting off of the phone I have several questions about how it all works:
With my returns, as we have just entered into the new financial year will I be required by the OR to file the 12/13 return for them to add into my bankruptcy?
With is just starting a new financial year I understand that the current year is also included, with it being so close to the start of the year I assume that I will need to pay tax for this year(13/14)
Between moving workshops some of my accounts information has been misplaced, so I have only claimed for what I have physical proof of, IE invoices and receipts,. Does the OR double check all of the returns to ensure they are totally accurate?
How far back does the OR look through bank statements, having been on holiday do things like this get mentioned? What happens if there are purchases like this, does the OR just question it or is there further action they can take?
If I decide to try and gain employment and cease being self employed will all of my tools of the trade be taken and sold to try and repay some of my debts?
Within the first 12 months whilst I am still undischarged I have read somewhere that the OR needs accounts every quarter to gauge how much I will need to pay monthly, is this the case? Are any payments made within the first 12 months, or do they start when you are discharged for a further 36 months?

I am sure that I will have many many more questions as I go through this ordeal and I would like to thank anyone in advance for any advice offered, also thank you for reading this far.

Neslein

KaiserBill

Hi Neslien and welcome to the forum.

Just a couple of things from what you have written. I was self employed when I was made bankrupt. I got a lot of help from a charity called Tax Aid, they helped me do all my returns etc for the tax man, if you are not already using them they should be able to help.


With regard to the tools of your trade, you are normally allowed to keep them,it should not be a problem.Even if you consider getting a job you will still need tools to follow your occupation.I know that tools - good tools are expensive to buy these days. If it comes up I would emphasise to the official receiver that you will need tools to get work in the future.

At the time I was working as a self employed courrier. I was allowed to keep my Transit van.


There will be others along who will be able to give more help.


Good luck.


Edit. Are you getting any help from the CAB or one of the other organisations, I got a lot of help from them when it happened to me.