What I am allowed to pay for during Bankruptcy?

jcarver007

Could someone point me out in the right direction to find answers to:

Am i allowed to spend money on things like new equipment, repairs to vehicle or if I need to obtain a second hand vehicle to replace old one.

How does it work with regards to profit from my business - do I contact OR straight away and inform them of profit made - is any profit allowed above £20?

Thanks

lilybankrupt

It's so difficult trying to get answers if you're self employed I too am self employed and keep putting off BR because so many of the answers to my questions are 'it depends'.

Regarding profit, I think this will work the same as a paid job. Your drawings are your salary and you will need to agree the budget with the OR for living expenses in the same way eg rent/mortgage, housekeeping etc etc. I believe the OR takes into account the fact that income can be variable/seasonal.

But in terms of capital/repairs expenditure in the business, I honestly don't know the answer (and I wish I did).

I've seen your other post too, and what I was told is that normally people can carry on trading, but it does 'depend'. Whilst tools of the trade are in theory exempt, if you were making only a small amount of money but had assets worth thousands in the business it may not be that simple. And stock is not a 'tool of the trade' and so in theory could be taken, although again it really depends.

I've seen stories of people being able to carry on as before, and others where stock has been seized :eek:

With Business Debtline, I have overall found them to be brilliant. However, there is one chap I've spoken to a couple of times who is less so - I phoned with specific questions and he just kept saying 'I can't advise you whether to go BR or not'. In the end I thanked him for his help then phoned back a few days later and spoke to someone else who was loads better. I mention this just in case you got the same person, it might be worth trying again?!

JCS1

The OR can ask for a P&L and balance sheet every 3 months whilst you are BR.

money_fool

Hi – I was (and still am) self-employed when I went BR. The OR did call to check if I had any employees/premises but when I explained that the business was just me working in the I.T. market he was fine. I do not carry any ‘stock’ as such but I did own I.T. equipment that is worth a few thousands, this was never mentioned.

I was not asked to agree to an IPA, in fact my SOA was never raised – this really surprised me as I was earning 60k with no major business expenses. After the initial conversations with the OR I never had any further contact or requests for information from them. I pretty much just carried on as normal. I do get the feeling I was fortunate and I know the OR guidance has become somewhat tighter since my BR. I did post about all of this when I was AD which I guess is on the forum if you do a search.

The restriction from BR last a year (normally..) and it remains on your credit file for 6 years from the date you go BR, which for me is now less than a year away.
Good luck with it all

woodformoretrees

I agreed my outgoings with the OR and he told me that I only needed to contact him should my earnings (after business expenses) go above that sum.
He understood that they would be different each month, but told me to just average them out and if they were under my agreed costs he didn't want to hear anything from me.

I guess each OR is different and your OR should tell you what they require.
I carried on working S/E, but I had no stock and no bills owing on the business side of things.