Considering Bankruptcy

craigy1973

Had a 'eureka' moment in the bath this morning. Thought about bankruptcy. I was a director of a LTD co that went bust in 2004. I have worked hard over the past 3 years to pay off creditors to whom I gave personal guarantees. In doing so I have buried my head in the sand about the tax implications and now find that I owe £40k to the Inland Revenue, still owe £25k to the bank and £30k to another creditor of the company. I am 33 years old and have no assets other than my ability to get out there and make money. I live in a rented house and worry for the future in that I have been paying these sums off for 3 years and still owe a fortune. My wife thinks I should go bankrupt. It worries me a little. I had a terrible time from the OR during the liquidation of the business, felt they were very harsh. Is it as bad for personal BR? Also worried that they will keep me bankrupt for longer than a year. I only have business debts, no consumer credit involved so it would seem to be the only way forward?

philnicandamy

Your first port of call as should be to contact one of the Debt Charities; see links below. Their services are free; they have no vested interest to serve; their advisors are professionally trained and the advice they give will be objective and in your best interests only. CCCS operate a system of telephone appointments that are designed to be flexible and don’t require you to attend an office based interview. At the CAB you will need to make an appointment with a specialist Financial Advisor; other advisors may not have the specialist knowledge you’ll need.
http://www.cccs.co.uk/
http://www.nationaldebtline.co.uk/
http://www.citizensadvice.org.uk/index.htm
If and only if you’re advised that bankruptcy is the most suitable solution to your financial problems then the guys & gals here will help any way they can.
For more specific advice and support, in an environment that is managed by people with first hand experience of bankruptcy, and moderated to ensure that no deliberately inflammatory or abusive posts are made then please visit:
http://bankruptcysupportersclub.co.uk/default.aspx

craigy1973

Thanks for that. I went to the CAB (amongst others including an insolvency practitioner, I was considering an IVA), and all have told me I would be mad to carry on paying and not go bankrupt. They say I have nothing to lose. Seems an odd situation though as none of the creditors are pushing for this.

philnicandamy

You'll find not many creditors will push it first, they'll use every tactic in the book to try and get any cash they can from you before they even consider declaring you bankrupt (it costs them a considerable ammount of cash to do this) where as if you declared yourself BR this option is cheaper than a creditor taking action, with the BR it'll usually last for 12mnths you can kiss godbye to any form of credit for at least 6yrs & you may have to find an alternative bank account etc

philnicandamy

It's natural to worry about the pitfalls of BR but if you've looked into IVA etc and are struggling to meet your payments/commitments BR may be the choice for you, my OR interview was relativley painless as many more people will tell you from theirs BUT you can get the odd bad report from people seems to vary from court to court, regards personal BR this usually will last for 12mnths BUT in some cases you may be suitable for early discharge sometimes as early as 6mnths but this is not always guaranteed (i've had my early discharge paperwork back for a few weeks now..this could go on for a few months depending on how busy the OR office is), the only way the OR will extend your BR would be with the use of a BRO this would only be applied if once looked into your finances you have commited fraud etc etc then you could face restrictions for up to 15yrs but as I said unless your hiding stuff & have commited any type of fraud with your finances you should be ok

have a look here for more info
http://www.insolvency.gov.uk/guidanceleaflets/guides.htm#1


In the end it's your choice should you go BR or not but please use the suggested helplines for more info, I consulted cccs & they were great for me went through everything over the phone for me & came up with all sorts of helpful advice

Conor_3

REgarding the OR, they're usually OK with private individuals. It's only if they think you're lying to them but as you've already been through that, I think you'd be OK.

Also remember that it'll bar you from being a company director for 7 years AFAIR, there's the possibility it'll be more than a year and it'll shaft you for 6 but then again, you'd be getting off £95k you can't possibly pay so a little pain is worth it.