Fighting Bankruptcy on the day of the hearing

sourcrates

There is a process for opposing a bankruptcy petition but, as with a statutory demand, there will not often be good grounds in a tax case.


You may not be able to attend the court in person, but you will be able to defend the case by letter.


Although as previously stated, your chances of a successful outcome are pretty low where tax is concerned.

sourcrates

Bankruptcy can sometimes be avoided by entering an individual voluntary arrangement (IVA) with your creditors. This is an arrangement to pay your debts over a period of time. Usually you will pay back less than the full amount owed, by agreement with your creditors. The agreement may last 5 years or more and must be approved by over 75% of your creditors (by value of the amounts owed).
Unfortunately, many people facing tax debts are unable to make an IVA because:

• They have insufficient on-going income to fund an IVA. You need a relatively high income to cover repayments to creditors and to pay the insolvency practitioner who is required to supervise the IVA, or
• Creditors who are owed 25% of the total debt vote to block the proposals. If HMRC is your major creditor, its vote alone could block the IVA

It is worth exploring this route if you want to avoid bankruptcy and you have sufficient on-going income. Most insolvency practitioners will be happy to have a short meeting with you – without making any charge – to consider whether this is possible. You can search for an Insolvency Practitioner on-line at https://www.gov.uk/find-an-insolvency-practitioner .
It can be difficult to obtain HMRC’s agreement to an IVA. In practice about half the proposals submitted are likely to be rejected by HMRC.

coolcait

Just to point out that things are a little different if you live in Scotland.

If you live in England/Wales, you've been given lots of excellent advice, and I hope it helps you.

dave1968

Thank you for all your responses , as for IVA i dont think its even a starter . as my debts to HMRC are in excess of 20k and i thouhgt there was a limit for IVAs.

Im considering now offering to split the debt over 12 months ... (no proposals from me have been sent )

If going for 12 months maybe they would accept but I would run out of money around month 3 ... but at least it buys me 3 months ...

im needing time to try work out the best way forward

something I dont have now

thanks Again Dave

sourcrates

dave1968 wrote: »

Thank you for all your responses , as for IVA i dont think its even a starter . as my debts to HMRC are in excess of 20k and i thouhgt there was a limit for IVAs.

Im considering now offering to split the debt over 12 months ... (no proposals from me have been sent )

If going for 12 months maybe they would accept but I would run out of money around month 3 ... but at least it buys me 3 months ...

im needing time to try work out the best way forward

something I dont have now

thanks Again Dave

No limit on IVA.

Your thinking of DRO with a 20k limit.

pelirocco

You must get professional advice as soon as possible ,If you want to stop bankruptcy you absolutely must attend the hearing to put your case forward if the judge feels HMRC are being unreasonable in not accepting your payment plan .If you believe the amount they are petitioning for is wrong ,you have to get the figures together and be able to prove it .You have left it very late which is why you need to seek the advice of an insolvency practitioner now

antonic

dave1968 wrote: »

Did you provide income & expenditure details when you made this offer ?

Not in writing no but will be submitting one when I send my latest proposal / offer in this coming week.

I don`t think you can appear at the Petition Hearing.

Right so I would not be able to have one last attempt to stop this, I thought I would be allowed to attend my own Bankruptcy hearing, but thanks for clarifying that.

So it seems HMRC will reject my final offer when they get it next week, but i loose nothing sending it in. They did give me 1 extra week to get the repayment proposal in.

I just know I would not be able to split it into 12 or less payments ...

so im dreading the next few weeks as my life closes down around me. My own fault. I know ...

I feel psychically sick with all of this ... i know its gonna end really bad ..

thank you for your responses Dave

Hi,

HMRC will not reject any reasonable repayment proposals and what would help is if you can make an upfront payment with the proposal.
HMRC need your incomer and expenditure details to verify that any offer you make to repay the debt is sustainable - if it isnt this is a reason to reject your offer.

Good luck and please keep us updated.

dave1968

Thanks for all the responses it is appreciated.

Im not sure though some say I could attend the hearing some not ... but another question if I may

after the 21 days of the Statutory Demand have passed, if no agreement in place then by what I know HMRC apply for bankruptcy ...

Will I get notice of this and a date ? or does it just happen ?

Is there time and a process where I could ask for an adjournment ?

And is there any particular method to submit reasons for why I want to fight the bankruptcy or ask for more time ?

Sorry for all the questions its just all so new and a real shock.

thank you again for the reply's

antonic

Please see my comments in RED

dave1968 wrote: »

Thanks for all the responses it is appreciated.

Im not sure though some say I could attend the hearing some not ... but another question if I may

after the 21 days of the Statutory Demand have passed, if no agreement in place then by what I know HMRC apply for bankruptcy ...

Will I get notice of this and a date ? or does it just happen ?

The first you will you know about it is when a process server turns up at the address HMRC have for you on file to serve the bankruptcy petition on you.
If you are not there then they will send you a letter to make an appointment to serve you - if you fail to respond the petition can be legally served by post.

Is there time and a process where I could ask for an adjournment ?
HMRC have already listened to you and decided that Bankruptcy is the enforcement option that is best to take against you.

And is there any particular method to submit reasons for why I want to fight the bankruptcy or ask for more time ?
The only way to avoid the bankruptcy is to make a repayment proposal that means the debt will be cleared within the 12 month.
You have to remember that by the time that it has got to this point down the enforcement path HMRC woukd have tried everything else to get payment from you , and the debt has been outstanding for a while - HMRC rarely make people bankrupt quickly.

Sorry for all the questions its just all so new and a real shock.

thank you again for the reply's

dave1968

So when I get served the petition is there no time or date given for the date of the court hearing or is that when the process server turns up it is because I am already bankrupt ?

I have read I can apply for a adjournment so was just wondering if there would be any time to do this ?

thank you Dave