Just made bankrupt by HMRC What happens next??

Ando

Hi all. Just been made bankrupt and ould like to know what happens next on what my circumstances are and what is best to deal with them so any advice would be much appreciated.There is many things I would like to know.

I am currently a self employed tradesman with my own (very old) van and tools. I have recently split from my partner who has moved out and is living in housing association accommadation with my 2 children and I am currently living in our old house, which is mortgaged and in joint names with about 10-15k in equity.

The property has charging orders applied against it (my creditors not hers) which I intend selling shortly and moving into a rental property.

My income can vary and is never constant, so questions I have is as follows:

How long before I hear from OR and how long before my bank accounts are frozen and what can I do with money that goes in the time being?

What will happen with the charging orders on the property? do they become defunct now that I am bankrupt?

Being self employed how much money will they leave me to live with and how will they work out a repayment arrangement with my circumstances?

With my partner and kids will they take their circumstances into consideration and agree I should help pay with maintenance?

Ive been told because it was HMRC that made me bankrupt and bacause I never sent in a tax return for a few years I will remain bankrupt for longer than the 12 month automatic discharge which normally applies, is this true?

Thanks in advance

Johnsmith2016

You should hear from the official receiver within a couple of weeks. I heard on the day initially but this was just to ask which current account I wanted to keep and he would declare no interest in it, my bank froze and closed it anyway. I sugguest you go and open a barclays or nationwide basic account as soon as you can, i did on the day of bankcruptcy.
As you was a business it is quite normal to be called in for a sit down interview with the official reviever rather than over the telephone.
You should be allowed to keep your van and tools for work.
As far as I am aware the charging orders still stand as they are secured on the property before bankcruptcy, they can reposses the property but the OR will have an interest in any surplus. Have a look here
https://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch1-12/Chapter9/part7/Part%207.htm

There are no hard and fast rules regarding how much you will pay in a IPA it will depend on your circumstances, commitments and outgoings, and if there is any surplus left after your basic needs are met. If the OR sets on up it last 3 years, but they can only do this within the 12 months. Being self employed you are certainly in more control of what you earn in these 12 months, personally i just woulnt take on extra jobs that would take you over the threshold you need to live, as there is no incentive to work harder and get stuck with an IPA. You will be able to pay your kids maintenace, they will be included in the budget you submit to the OR
Take a look here
http://www.stoozing.com/calculator/soa.php
As part of your basic needs, you can add things like dentist, opticians, RAC breakdown etc.
Will you be able to rent ? Thinking you may fail a credit check now you are bankcrupt, just something to consider.
Yes normally automatic discharge after 12 months but sounds like you have got a BRO due to not doing tax return. 'this will mean the terms of being bankcrupt like not lending more than £500 will apply for this period. Would need more specific info to advice further eg debt amounts, equity, assets soa etc

Flyright

Why did you not submit your tax returns? The Official Receiver is likely to require an explanation and yes, this is grounds to seek a BRO against you.

Ando

Thanks, What info would you need to know?

I should be able to rent as I know a few landlords so think that getting somewhere shouldn't be a problem.

So they take every penny in disposable income you earn? will just spend my weekends lying in bed! if that's the case! I bank with barclays and they are a big creditor. I've opened up a cashminder account with the co op just in case barclays won't want me banking with them.

Ando

Flyright wrote: »

Why did you not submit your tax returns? The Official Receiver is likely to require an explanation and yes, this is grounds to seek a BRO against you.

I ended up owing my accountant money for end of year accounts which I couldn't pay.

I fell behind with council tax, mortgage gas/electric etc so tax return got left in the back burner.

fermi

When calculating an IPA the OT/trustee has to take account of reasonable domestic needs, which is applied properly should be fine to live on.

IPA takes all surplus above that, although they may need to work with averages if you are self employed with variable income. So yes, if you work/earn extra so have more surplus when your expenses haven't changed, then yes you would pay that extra over. t used to be a graduated % that was taken, but a few years ago they changed it to 100%.

One of those odd things that during an IPA there is very little in it for you to work/earn more that that which covers those reasonable needs. Obviously it may be worth it if you develop your career/business doing so, as IPA only lasts 3 years and you would fell the benefit when it end, while not bothering may hurt you in the longer term. Depends on you, your job, your business etc.

fermi

BRO/U may considered if you have seriously neglected your business or tax affairs. If you have more or less just been a victim of crappy circumstances, then probably not. Have seen plenty of people made BR by HMRC where no BRO/U happened.

Johnsmith2016

Yes I agree with fermi. If you went out your way to avoid paying taxes then yes but if it was due to unfortunate circunstances and nothing deceptive you may be ok.

dancingfairy

I'm not sure if you can sell your house anymore? Surely as an asset it's now in the hands of the official receiver?
Df

Ando

Just been checking the situation with my house. I thought I had a situation here whether I could sell it or not because of the charging orders on it as the amount on charging orders is more than my share of the equity.

But after looking into it, because the property is in joint names with my partner who has no charging orders to her name! it appears they cannot enforce a proper charging order, just a restriction which just informs my creditors of a proposed sale.

I suggest this would change things and therefore OR can claim all of my share of the equity?

Ando

More information of what I am talking about here if anyones interested

http://beatmydebt.com/self-help-guides-resources/charging-orders/charging-orders-on-jointly-owned-property