Potential bankruptcy - advice needed

pinkkibby

Hi
Just need some advice in a non judgmental manner. I know what mistakes I have made & am preparing for the consequences. This is all new to me & I'm just trying to get a bit of info to prepare myself.

The situation is that I will be considering bankruptcy in the near future. My main reason for this is that my limited company has debts of over £40k to HMRC and I don't have anything to pay them with plus my business is failing so future earnings can't be relied upon.

My personal finances are that I probably have £10-15k of personal unsecured debt. I also have a mortgage with approximately £20k equity if I'm lucky.

I recently instigated a life change & am now a full time student. My intention was to keep my business ticking over to allow me to cover my basic living costs.

So essentially I am going to have no income. I am wondering if I was made bankrupt, would this be taken into account ie if my property were sold would part of the equity be given to me to cover my living expenses as otherwise I'll have nothing?

Just trying to work out if I'll be able to carry on at uni or whether I will need to get a job to be honest which is going to be very difficult.

Any help is appreciated.

Flyright

Unless you have personally guaranteed any of the company's debts then based on what you've said you are not currently insolvent in that your assets are greater than your personal debts. That said, if you were forced into bankruptcy all the equity in the property would be taken in the trustee's fees and the remainder distributed to creditors, not to you. You would also be prevented from running your company if you were bankrupt.

pinkkibby

I'm wondering if HMRC will force bankruptcy due to the debt I owe them?

patanne

I think you need to be a little clearer. Are the debts personal debts or those of a limited company. If the HMRC debts are debts of a limited company then the debts (and bankruptcy) is limited to the company. You need to look at your debts as 2 completely separate issues. Your personal debt and your limited company's debt.

Unless as Flyright says you have personally guaranteed any - which you wouldn't have done with HMRC but may have a bank loan etc.

pinkkibby

patanne wrote: »

I think you need to be a little clearer. Are the debts personal debts or those of a limited company. If the HMRC debts are debts of a limited company then the debts (and bankruptcy) is limited to the company. You need to look at your debts as 2 completely separate issues. Your personal debt and your limited company's debt.

Unless as Flyright says you have personally guaranteed any - which you wouldn't have done with HMRC but may have a bank loan etc.

So the main issue is the tax debt which relates to the limited company & which I won't be able to pay. My common sense told me that this debt wouldn't be linked to me personally so they wouldn't be able to force me to become bankrupt in order to pay it from my personal funds. Then I've been researching lots & seen confusing information which has got me in a pickle I guess & all confused hence my query.

So..from what you say I'm concluding that my company will probably be made insolvent as IT can't pay the debt but HMRC won't force bankruptcy on ME to pay the debt from any equity I may have? My personal debts I'm in control of in general so it's only the HMRC debt that is causing the query. I haven't personally guaranteed any company related debts, there actually aren't any apart from the company tax debt.

Thanks for your help.

pinkkibby

Just looked into this further..the circumstances of the HMRC tax debt will mean I will face a civil penalty & be liable for that so I guess that takes me back to my original query which has been answered.