Wait to be made bankrupt?

Denzel1989

Hi all been on here before....im back lol

I decided late on last year after advice from stepchange and my accountants that bankruptcy is the only realistic way of dealing with my debts.

The problem is i simply cannot get the money together for the court fees.

Part of what i owe, around 5k is to HMRC for income tax (im self employed) will they make me bankrupt? And if so will i have to go to the high court in London on the day of the bankruptcy?

I have no problem with that but i live hundreds of miles away from London and have no way of getting there?

What to do?

fermi

They may do, but no guarantees on that. If they did, and you don't oppose the bankruptcy, then there would be no need for you to attend.

National_Debtline

Hello there,

We have come across examples of where HMRC have made people bankrupt for tax. It is more likely if you have assets, such as a property, which could be sold to ensure a return for them.

It is likely that a bankruptcy would be heard in your local bankruptcy court rather than the one in London.

Best wishes,

David @ NDL.

alastairq

Hi....the most important tasks to be doing now, is to organize your life to suit bankruptcy.

Open two or three basic bank accounts with the known BR-tolerant banks.....Co-op & Barclays.

This needs to be done ASAP regarding Co-op....and you can retain internet access whilst Undischarged, unlike BArclays!

Get 'em up & running, DD's sorted into one account only, for example..use the other for income & casual expenditure..the 3rd can be used to 'save' left-over pennies?

Also a good time to rent or move to a new rented home, pre-BR, its easier as a credit check may well be conducted....post BR it can be problematical.

However, once the decision to petition BR is made, the hard work is done..simply start paying token payments [£1 each per month is good]...to each major creditor.

Do not pay any more...there must not be evidence of 'favouring' one creditor over another.

The purpose of the above is to show you are 'prepared to pay'.....something you can show a Court if one or more creditors seek a CCJ against you? Be prepared for any CCJ Court papers, complete the enclosed SOA's to show you cannot pay, then the Court an set a reasonable repayment plan....somehow, a fiver a month isn't what a creditor would like to see, so they can be reluctant to go to Court..but watch for, and complete, any genuine Court papers...you will be fighting a rearguard action all the time util BR occurs....call it a game, if you like?

I'm uncertain of what the trigger point is for HMRC to pursue a petition for BR...it has been posted on here elsewhere, but I know not where.

However, there is no rush to petition, so why not wait until HMRC does it for you?

You do not have to attend Court if someone else petitions your BR.

Once you receive the paperwork pre-petition, simply write & tell the Court you do not oppose the petition.

Might be a good idea to make a start on your SOA....aiming at zero-surplus?

And, obviously, I started typing long before the other two?

Denzel1989

Thankyou for your very prompt reply's, i have made a start on my SOA and the form is just filled with zero's. I am not earning anything so therefore not spending anything either, i live with my parents you see so they are for the time being at least, subsidising my living costs. I have no assests what so ever.

I have now not made payments on any of my debts since last July after my business fell to bits, nearly every creditor has filled a default notice against me, no CCJ'S yet though, is that anything to worry about considering the ultimate goal is to become bankrupt anyway?

National_Debtline

Hello again,

If your debt is below £15,000 you may qualify for a Debt Relief Order. The following is taken from our fact sheet:


What is a debt relief order?

A DRO may be able to help you if you do not own your home, have few assets and little available income to pay your creditors. It is a cheaper option than bankruptcy. If your DRO application is successful, most creditors cannot take action to recover your debts for 12 months. The debts are then written off after the 12 months are up.


There are strict rules that you have to meet to qualify for a DRO. You must:

• be unable to pay your debts;
• have total debts under £15,000 at the date the application is approved by the official receiver;
• have assets below £300;
• not have a car or motor bike worth more than £1,000;
• have less than £50 a month spare income after normal household expenses are taken into account;
• live in England or Wales (or have lived or run a business in England or Wales in the last three years); and
• not have had a DRO in the last six years.

If you would like more information, here's our fact sheet: https://www.nationaldebtline.org/EW/factsheets/Pages/37%20EW%20Debt%20relief%20orders%20(DROs)/Default.aspx

Best wishes,

David.

woodformoretrees

National_Debtline wrote: »

Hello there,

We have come across examples of where HMRC have made people bankrupt for tax. It is more likely if you have assets, such as a property, which could be sold to ensure a return for them.

It is likely that a bankruptcy would be heard in your local bankruptcy court rather than the one in London.

Best wishes,

David @ NDL.

#


Or that it's heard in the high court, then later transferred to a court local to the bankrupt. (my experience)

OP, you don't need to attend if you're not arguing the bankruptcy. You can phone them at the end of the day and see if it went through.

National_Debtline

woodformoretrees wrote: »

#


Or that it's heard in the high court, then later transferred to a court local to the bankrupt. (my experience)

They used to be heard in the High Court in London. It's now the Central London County Court (which is still part of the Royal Courts of Justice).

David.

Denzel1989

Hello, and thanks.

My debts are up to nearly 30k, mainly from propping up a failing business since i was 17. ive looked at every which way including the DRO you have mentioned, i pestered my contact within the bank for help for around 18 months, with the view to re-finance my borrowings over a longer term and thus reduce the monthly amount, they eventually agreed but only to around a third of my debts for 27.5 percent apr interest! Completley pointless!

What About the OR interview? Will i not need to attend the court for the interview with them?

fermi

Once the bankruptcy order has been made the case will normally be transferred to your local OR's office. If any interview is required it would be there.

Denzel1989

Thankyou all very much, this forum is invaluable, i imagine it has helped an awful lot of folk over the years.

So im going to leave it for now and let hmrc do the dirty so to speak.

Another question or two!

I havent had any bailiffs or anyone like that knocking on my parents door yet, how can i stop this in the interim between now and hmrc filling the petition?

Also could i write to HMRC outlining my position and suggesting that they start proceedings asap?