Is my insolvency practitioner acting dodgy?

downbutnotout10

Hello all,

Would appreciate some advice / feedback...

Back in May I had to wind up my company asap when HMRC came knocking - various issues had caused problems and led to mounting debt (e.g. a former client running off with £14k that I never got back, chasing a massive payment from another for months...)

Anyway, my accountant quickly sorted out an insolvency co to wrap up old company. In terms of charges he suggested £7k to "cover it".

I was in a panic and trusted my accountant and made the initial payment of £2k immediately and the outstanding balance on Friday.

Here is my concern: the insolvency company refuse to give me any paperwork to say where that £7k has gone or been distributed.

I don't know what cut they are getting, HMRC etc. I've been asking for receipts and they won't provide them.

Is this normal?? Surely if you pay an insolvency firm they would provide of breakdown of how the money you owed was distributed?

Am I being paranoid? I haven't even been given receipts for the £7k I've paid...

When the accountant from the firm chased me on Friday for the money, I had a seriously dodgy conversation. I turned around and asked how the money was being distributed and he said "I can't tell you that, you would have been told that before". When I explained I wasn't, he went quiet on the phone and put my original contact on. I felt really uncomfortable because he laughed off my question and said "all you need to know is that no ones knocking down your door".

i feel really uncomfortable.

What kind of paperwork did others get after insolvency...? Thank you in advance!

PrettyKittyKat

You should certainly get paperwork if you go insolvent. Was it a personal or company IVA, or a personal or company bankruptcy? There would be paperwork to sign and terms to agree to for all options surely.

It sounds as if your accountant is being dodgy to me, but that is just my opinion. I am surprised you get £7k over without asking for information prior.

downbutnotout10

Hello PrettyKittyKat,

Thank you so much for the feedback!

So... To explain why I gave over the money so easily. HMRC came knocking at my accountant's door and naturally I panicked and - having dropped the ball - he panicked too.

Then he said, look, we can instruct an insolvency practitioner straight away. I reckon it'll cost around £7k. I was in an utter panic and agreed to pay - my accountant came recommended by a good friend and I trusted him.

I made the initial payment of £2k straight away to instruct the insolvency practitioner. A month later I paid £800. Before I paid more I asked when I will be given paper work for the money I paid. I was constantly told someone would call me back and explain this but no one did. On Friday I was chased for the remaining £4200 and to be honest, I felt really intimidated when I asked how I can get a receipt, breakdown of payment etc. I was told send us the money and we'll sort everything for you. I probably sound a bit of an idiot but there seemed to be a slight threatening hint of "don't pay and bailiffs would be banging at the door".

The whole manner they have all dealt with me has been dodgy... I feel backed in a corner: I wanted this sorted but no one was giving me the paperwork I demanded. They implied when I paid the final amount I would get a breakdown of costs but nothing has been offered...

Anyone experienced insolvency? Is this normal? Thanks!

sourcrates

Absolutely not normal at all.


There are two forms of insolvency for debts over 20k.


IVA and Bankruptcy.


In both cases there would be a lot of legal paperwork to complete, which would require your signature.


You cannot just go insolvent by handing money to an IP, thats not how it works, you pay monthly into an IVA and Bankruptcy has a fixed fee of £680.


Sounds to me like you have been scammed.

missimaxo

This sounds more like a limited company voluntary winding up. Yes it's legit that you've paid £7k to the liquidators up front but it's way too early for them to have done anything with it. Most will likely go on their fees.

If I'm right and it's a voluntary liquidation of a limited company you should also have been asked to assist with completing a report to creditors and a statement of affairs. The winding up will be registered at companies house and the report to creditors should provide details of the practitioners fees. Annually, they will file a receipts and payments account at companies house showing what funds they have had in, what they have sent to creditors and what has been spent on their fees and then a final one when they close the case but it's too early for that yet.

Also within 3 months of the liquidation they send a conduct return to the insolvency service on your conduct as a director. If you owe HMRC it may be that the insolvency service consider disqualification proceedings against you as a director but this is outside the hands of the practitioner, if this happens you will receive letters from the insolvency service at a later date.

missimaxo

sourcrates wrote: »

Absolutely not normal at all.


There are two forms of insolvency for debts over 20k.


IVA and Bankruptcy.


In both cases there would be a lot of legal paperwork to complete, which would require your signature.


You cannot just go insolvent by handing money to an IP, thats not how it works, you pay monthly into an IVA and Bankruptcy has a fixed fee of £680.


Sounds to me like you have been scammed.

Sourcrates they said they had to wind up their company, company voluntary liquidation does involve just handing money to an IP, along with other paperwork. It is the company that is insolvent not the individual and therefore the routes are voluntary liquidation, compulsory liquidation (which is likely what HMRC would have done eventually) administration, admin receivership or a CVA which is a Company Voluntary Arrangement.

sourcrates

missimaxo wrote: »

Sourcrates they said they had to wind up their company, company voluntary liquidation does involve just handing money to an IP, along with other paperwork. It is the company that is insolvent not the individual and therefore the routes are voluntary liquidation, compulsory liquidation (which is likely what HMRC would have done eventually) administration, admin receivership or a CVA which is a Company Voluntary Arrangement.

Yes you are correct.



Apologies, combination of small phone screen, and lack of reading glasses 🌝