HMRC bankrupt or do we do it ?

rog2

fiveyearplan wrote: »

You mentioned you still have your house. That is also a big concern for me. Is it possible to save one's house under such circumstances? Our mortgage is £280k and house was valued (over-valued in my opinion) last year at £330k. We're tied in until Dec 08 or pay £18,000 early redemption. I think realistically we could get £300k for it which wouldn't leave much after paying ERP.

Let me clarify my situation regarding my house, fyp; Yes, at the moment I still have my house, but the Trustee has 'vested' an interest in my Beneficial Interest (approx £70k) and has written to me, and my wife, offering us the option of making an offer to 'purchase' my BI. At the moment I am not working, nor am I in receipt of any state benefits, having been refused JSA due to the fact that I was self-employed. Whilst I am desperately trying to put a package together that will get me back on the earnings ladder, we are currently totally reliant on my wife's income, so at the moment the purchase of my BI is not a practical option. My trustee says that he will, if we have not made an offer within 12 months, take my wife through the courts to force a sale.
In your case, though, your beneficial interest will be a lot lower, around £3k, so you COULD make arrangements that would allow your wife, or a relative, to purchase your BI from your OR/Trustee.

rog2

taib0 wrote: »

As you rightly said the revenue are not particularly nice people and we have had real arrogant sod of a man chasing us. ........now I think he's made it a personal crusade to nail me.

I can't argue with that, taib. On many an occasion I have been tempted to think that there has been 'more than an element' of personal vendetta on the part of those 'civil?' servants that I had the mispleasure to deal with.

In my case it did NOT stop with my bankruptcy - approximately 6-7 weeks AFTER my bankruptcy, and 4 weeks after my OR meeting, I was contacted, by telephone, by a particularly arrogant woman, from HMRC, who said that she had been trying, for two weeks, to serve a Statutory Demand on me, at my business premises (which btw I had vacated six months before my bankruptcy) and DEMANDING that I give her a contact address, so that she could serve this SD on me, which, she informed me, would probably result in my 'well-deserved' bankruptcy.

I told her to, first of all, calm down and asked her just 'how many times can HMRC petition for my bankruptcy?' I explained that HMRC (revenue) had already made me bankrupt and that she should be able to access all the details on my file. Her reply was that she represented HMRC (VAT) and that they were a COMPLETELY separate department, and had 'NO LINKS WHATSOEVER' with HMRC (Inland Revenue). I told her that I was absolutely amazed at this reply, since the Government had spent God knows how many millions of taxpayers' money in combining the two departments, so that the resultant 'sharing of information' would result in a more fair and efficient 'Tax Collection' system.

It seems, in my opinion, that HMRC is allowed to function inefficiently ( and I use that word euphemistically) whilst we, the general public, have to comply with their every whim - otherwise they come down on us like the proverbial 'ton of bricks'.

I am, as you might gather, VERY bitter about the way that HMRC treated me. At no time would they give me any indication as to what they had used as a basis for their assessment of my tax liabilities, stating only that the onus was on me to prove them wrong.

I am, very seriously, considering taking action against HMRC over the way that they treated me. In spite of their attitude that they are untouchable, surely even they are not above the law.

Sorry for the rant.

taib0

hi rog2, you have every reason to rant don't apologies I know exactly how you feel. The fact I have decided to petition my own bankruptcy almost makes me feel better (just filling the dreaded forms in now) I feel as though I have got one over them, isn't that sad when its something as serious as this. After 15 months of rejected IVA's, knocks on the door, the kids shouting dad there's a woman on the phone for you (kids always get to phone first) I have had a belly full and can't wait to go bankrupt if only for some peace. I am just worried about the IPA now, don't want to go bankrupt and still have a big monthly payment around my neck that seems so pointless !!
Regards,
Taib0

fermi

taib0 wrote: »

I am just worried about the IPA now, don't want to go bankrupt and still have a big monthly payment around my neck that seems so pointless !!

Any payments under an IPA will be much less onerous than the contributions to any IVA you might have considered in the past, and will only last for 3 years rather than the 5 for the IVA (if an IPA is even imposed by the OR).

The OR tends to allow a more generous living budget than an IP in an IVA, and after that only 50-70% of any genuine surplus income is used to pay.

You can read about IPA's here: http://bankruptcy.informe.com/income-payment-agreements-ipas-dt18.html

taib0

hi fermi,
thanks for that, I reckon on average we have around £80 a week over when everything has gone out so I just hope they don't take most of that
regards,
Taib0

fermi

They would look to take about 60-66% of that, so £48-53 ish per week, if that represents the surplus that the OR would calculate.

But you would be surprised at some of the expenses that are allowed for, and not all income is classed as income for the purposes of an IPA.

It would be worth posting an I&E summary on here before you have to submit one to the OR. We should be able to advise you what is Ok and what isn't, how to juggle things a bit, and suggest things that you may have forgotten.

taib0

Hi fermi, I will do that just to make sure I don't mess up the real one that the OR will see's, thanks keep looking back in
Taib0

taib0

Hi Fermi, here's my I&E for a family of 4 on a monthly basis what do you think ?

mortgage 995
mortgage protection 54
council tax 102
housekeeping/food 400
gas/electric 80
water 39
telephone/mobiles 60
clothing 80
life Insurance 24
Home Insurance 43
car tax x2 18.50
car insurance x2 217 ( 2 taxi's ) public liability insurance £2600 pa
fuel (diesel) x2 400
family dentist plan 35
opticians 10
haircuts 10
tv licence 10.95
holidays 70
Total £2648.45


Income

my earnings 1800
wife's wages 400
child allowance 120
child tax credits 410 this is due to change as my
16 yr old has just left school
and starts college in september
Total £2930


Thanks Fermi, please take a look and give me your opinion as I said I don't really want to go to the OR meeting and get hammered because my figures are wrong. Anyone else's views would be welcome also please feel free
regards,
Taib0

fermi

Others on here are much better at picking apart an I&E than I am.:o

I suggested it so all the other great people on here can comment.;)

Several things do stand out to me though.

Child Benefit: The OR can't include this in his calculations for an IPA (although you must put down on the forms). So assuming 'Child Allowance' is this, that knocks £120 per month off the income available for the OR to assess.

The High Court has stated as a matter of public policy that child benefit and similar benefits should not be included in the statement of income when applying for an IPO and there is no reason why this point should not be extended to cover IPAs. Whilst it is acknowledged that in the figures for expenditure there may be outgoings for the benefit of the children, at least to the value of the child benefit received, to ensure that there is no risk of them being deprived of it, child benefit should not be included in IPA assessments.

Haircuts: The OR usually permits £10 per adult and £3 for children pcm.

31.7.27 Hairdressers

It is reasonable to allow a monthly allowance up to £10 per adult and £3 per child to pay for hairdressing requirements, but any expensive hair treatments must be funded from the surplus income remaining with the bankrupt after deduction of the assessed IPA/IPO contribution.

Family dental plan: The OR will sometimes allow this, but you need to be able to prove that you have no realistic access to any NHS dentists.

31.7.21 Dental and optical treatment

Where the bankrupt can demonstrate to the satisfaction of the official receiver/trustee that he/she has no NHS dental service practically available to them (for example where they live and/or work in a remote area), this type of expenditure may include items such as a dental payment plan for treatment at a privately run dental practice, however this should only be considered where there is no practical NHS alternative.

What about after school clubs/activities. Many people are allowed to put a small amount for these.

31.7.28 Extra curricular classes/activities for children

Whilst it can be considered reasonable to allow expenditure to be claimed by the bankrupt to fund one extra-curricular activity per dependant child, any claim for additional extra-curricular classes/activities should be funded by the bankrupt from any surplus remaining with them after deduction of the assessed IPA/IPO contribution.

31.7.29 After school clubs

An expenditure claim for after school clubs can be allowed if they are used to provide childcare whilst parents are working. If the use of the club (s) is simply a matter of convenience for the bankrupt and/or his/her spouse/civil partner/partner the bankrupt should be informed that the cost of funding the club (s) must be funded from the amount of surplus income left with him/her after deduction of the assessed IPA/IPO contribution.

Appears the cars are used for business? I assume this accounts for the high fuel/diesel bills?

Is any kind of breakdown cover paid?

Hope this isn't rude, but what is the position with the house? Is it in joint names? How much equity (if any) is there in it? The OR will want to realise any significant equity that you own.

That's just for starters, and I'm sure there will be lots of other comments.

taib0

hi fermi, I wonder if they can't touch the child tax credits either although that figure will definitely drop as my boy has now left school but does start college in september for 2 years.

We owe £140,000 on our house plus there is a charging order for £19,000 from Lombard, so we owe appx £159,000. The house is valued at around £170,000 maybe slightly more £175,000 tops so there is very little equity really. My sister bless her has offered to buy our beneficial interest if the OR allows it so that we won't lose the house (please god he allows it) she's been fantastic and has helped us all along. The cars are indeed used for business both my wife and I are taxi drivers she just works part time in the mornings. I have got AA cover I forgot about that and it costs £130 a year.
Thanks again for your help

Taib0