Self Employed BR

BRBNOV

Hi All
I declared bankruptcy end of last month and looking for some assistance if possible with some questions. The more I read the more I am churning myself up and making my anxiety worse

I will spare the details of how and why debts accumulated (it wasn't through wild spending sprees I hasten to add), but the straw that broke the camels back in declaring bankruptcy was when I filed (late) my Self Assessment returns for the past 2 years and on receiving the bills, the alarming truth of the extent of the debt and unlikelihood of it being able to be repaid in a reasonable time dawned on me.

The OR contacted me this week and my Interview is next week (Tel)

I am self employed, work from home and the OR has already indicated they are ok with my 'tools of trade' laptop / phone and will just need to confirm value of my car which I'm confident will be under £1000

On my BR forms SOA I used the last 3 months invoicing history to calculate my earnings (Net & Gross as requested) however the OR indicated it didn't quite work that way and would discuss next week so to have my trading history available. I have indicated that my income is likely to be more sporadic as my main client are looking to use me less since they have now got an office and want it occupied with staff rather than 'remote working'. My depression / anxiety is also becoming worse due to this whole process and I already work less due to this.

Questions

1) I stopped paying my creditors a while back and have been making nominal payments to some for it to remain with the specialist team (due to my depression) however I initially told them I had no income and due to my depression and their acceptance, It was easier to bury my head in the sand and continue in this vein for over a year.
Given I also neglected to file any tax returns for my self employment, am I likely to be given a BRO?

2) From the SOA I submitted there is a surplus income the OR could consider, however, given my situation and health, I am likely to cut back my hours and only work to cover my living expenses. How will this work with the OR?

Appreciate any assistance

Cobalt77

Q1. Very unlikely.

Q2. I suggest you post your SoA on here ASAP. The main purpose of your telephone interview with the OR's Examiner (i.e. junior admin type person) is to go over your SoA.

As you are self-employed, your income & earnings will fluctuate. Equally, you may not be claiming everything possible in your SoA. If you are lucky, you may be able to demonstrate that you do not have enough income for an IPA - if an IPA is not put in place by the OR within the 12 months of bankruptcy, then you will effectively get away scot-free (instead of having to make 36 months payments)

Thus, it is crucial you make sure everything is correct before you have the OR interview - once an IPA has been set up, you are basically stuck with it for the 36 months (although it may be increased or decreased during that period, depending on income)

HTH

Flyright

Failure to deal with your HMRC affairs is quite a common reason for a BRO so it cannot be ruled out.

Cobalt77

To put your mind at rest BRBNOV, a BRO is no major issue anyway for most people.

Provided you cooperate fully with the OR (i.e. answer questions and provide any information requested), a BRO will not extend your period of bankruptcy beyond the statutory period of 12 months.

All it would do is extend certain bankruptcy restrictions for a longer period. So, you wouldn't be allowed to be a company director, or work in insolvency whilst a BRO was in place.

Whether or not a BRO is requested by the OR will ultimately depend on the amount of tax you owe to HMRC, the reasons (e.g. stress / depression / health / family problems etc) and how you come across in your OR interview.

So, as Flyright says, there is always a possibility - but, if you come across as genuine to the OR, you could well dodge the bullet (provided, of course, that your BR didn't also involve any gambling debts)

CKhalvashi

Flyright wrote: »

Failure to deal with your HMRC affairs is quite a common reason for a BRO so it cannot be ruled out.

Although if there are health issues that may have affected OP's judgement, as confirmed by a suitably qualified individual (if OP has seen a doctor in plain English), then there may be reasonable grounds for IP not to apply for the BRO.

It will depend on the circumstances, but as above, cannot be ruled out.

BRBNOV

Thank you for that. After discussing with my partner and family after my doctors appointment on Friday, I have decided to cut back my hours as want to try and get my depression and health back on track. So long as I earn enough to cover my living expenses, there is little point (albeit perhaps not morally in relation to surplus income for creditors) working in excess of this to the detriment of my well being.
My appointment is tomorrow but I will try and add my already submitted SOA (submitted with BR papers) onto the forum for review, albeit the income side of things will be different since I will now not be carrying out the level of works I based the submitted figures on.

Am I right in saying an IPA won't go ahead unless it is agreed? as they won't know at this stage that my earnings will now be below the threshold for an IPA? though I indicated this may be the case to the OR on the phone.

CKhalvashi

BRBNOV wrote: »

Am I right in saying an IPA won't go ahead unless it is agreed? as they won't know at this stage that my earnings will now be below the threshold for an IPA? though I indicated this may be the case to the OR on the phone.

Unless agreed mutually, or a judge orders it

It's your responsibility to notify a chance in circumstances.

BRBNOV

Thank you for clarifying. I was worried they may issue an IPA based on my previous earnings and then I would be stuck having to inform them continually of any changes for the 3 years rather than just the initial 12 months

BRBNOV

I have had my interview and given change in circumstances with work, OR has said she will review in 4 months time as no point using current figures.
I still need to work out what hours / earnings it is worth me doing so I need to work out what the living allowance will be.
She briefly referred to my SOA and for instance shopping bill she could allow £200 and something, I explained myself and partner total all household bills and travel etc then divide by 2. She then said if it were to be done that way then she would need to know what he was earning?
Should I therefore work out my SOA as a single person? totally confused as they specifically ask what your partners contribution to the household expenses is? Obviously going forward, if I am earning upto my 'permitable allowance' only he will be picking up the slack for the rest of the amount if it is less that what I have previously been contributing as our household bills as a couple will not change
Anyone able to help?

BRBNOV

I have had my interview and given change in circumstances with work, OR has said she will review in 4 months time as no point using current figures.
I still need to work out what hours / earnings it is worth me doing so I need to work out what the living allowance will be.
She briefly referred to my SOA and for instance shopping bill she could allow £200 and something, I explained myself and partner total all household bills and travel etc then divide by 2. She then said if it were to be done that way then she would need to know what he was earning?
Should I therefore work out my SOA as a single person? totally confused as they specifically ask what your partners contribution to the household expenses is? Obviously going forward, if I am earning upto my 'permitable allowance' only he will be picking up the slack for the rest of the amount if it is less that what I have previously been contributing as our household bills as a couple will not change
Anyone able to help?