Bankrupt via Taxman

TaxAvoider

Hello Everybody

I just want to say a big THANKS :T to all the posters on here who have given me a lot of advice over the last few months. I have been feeling a bit guilty about not joining in, but here goes.

HMRC aka The Taxman petitioned for Bankruptcy, a long running saga like many on here going back 7 - 9 years, I was subject to a Court Order in 2003 to make payments of £250 a month on the debt of £25,000 :eek: which I was more than happy to start paying. Soon after that my world literally "fell apart" within the space of a few months I had lost my Job, had a car repossessed, split from my wife, started a two year process to have our Daughter placed in my care, faced domestic violence, had every credit facility removed from one day to the next due to 6 months on Benefits, evicted from our home, put into Emergency temporary Council Housing .....

After all that , I slowly rebuilt a life with my Daughter, to my ex-wife's credit she has also finally sorted out her problems and we are all getting along better for now.

Anyway during most of the last 6 - 8 years I have been mostly paying Tax via PAYE, however I had not been filling in the dreaded self-assessment forms :mad: this meant that the Taxman had to make assumptions and eventually came to the conclusion I owed £90,000 It was actually quite comical in hindsight to get the statement every month with a paying in slip.

Anyway about 18 months ago I finally got my act together and started to communicate with them , they constantly made unrealistic demands for me to speed up the process, I was working full time, had my Daughter to look after, there literally were not enough hours in the day to go through the mountains of paperwork.

Even though I finally had everything done by March this year, they perservered down the BR path constantly asking for full payment. Even though they themselves were now reducing my outstanding amount with every Return that they proceesed, as surprise surprise they saw that I had been paying PAYE.

At my first BR hearing at the RCJ in July I was given a 12 week postponement, at that time the figure was approx £60K and by the time of the 2nd hearing it was £35K as the Taxman had finally processed all my outstanding End of Year Returns. On top of this I had approx £12K of other debts that I had been reducing steadily over the last 3 years.

Having no assets and no way of raising credit, obviously the Registrar made me BR at that hearing and now the long walk to recovery starts :j

I am in the lucky position that I have a good Job , well for the next few weeks at least , I am an IT Contractor , ironically working at a Bank :rotfl: They know about my BR but kept me on. The work finishes at the end of the year, so I will be looking for similar work. However, my next Contract may be more of a problem as quite a few places do credit checks before you start

I am about to start paying £420 monthly as I currently have a surplus of £600 monthly. The OR Interview was pretty painless, I was honest and open about all the difficulties I had been through these last few years.

To be perfectly honest , my financial problems are nothing compared to the problems my Daughter has been put through these last few years. She was in foster care for 2 months after my wife had a "breakdown" while I was trying to work to get us all out of the "mess"

That was the final straw, so I just said "sod it" to the "world" and did all I could to get a new life for our Daughter and myself. Going through all that either breaks you or makes you , and I know what it has done to me :exclamati

I think in a way, because I showed no "fear" of BR or refused to get "angry" with all my creditors, they seemed to be annoyed by that.

I hope to be able to answer some questions , and give something back, especially to anyone going through their own battle with the Taxman.

As for my name, I was amazed that it was still available An ironic choice, as I have never avoided paying Tax in the first place, but have avoided the dreaded paperwork :mad:

Richard_S

Hi TaxAvoider,

That was a very heart wrenching post and you're certainly right about the whole process "making or breaking" you.

I'd be devestated with having to pay an IPA of that amount, and don't forget that if / when your income changes you can apply to have the IPA reduced or even better still suspended.

It's awful to see the way a lot of people's health and relationships suffer as a result of debt problems and bankruptcy, but it's sometimes so difficult to get a realistic perspective and appreciate the important things in life.

Best regards

Richard

rog2

Hi TA - there are quite a few HMRC 'statistics' here, myself included. I note with interest that, at your initial BR hearing, you were 'given' a 12 week 'adjournment' so that the taxman could find more ways in which to 'rub salt into the wound'. When I turned up at the RCJ, there were 4 'women' sat around a table 'gossiping' - they kind of reminded me of 'les tricoteuses', the women that knitted the balaclavas at the foot of the guillotine - who, it turned out, were the HMRC 'legal' team. :rolleyes: They actually seemed quite surprised to see me, and told me that HMRC were 'prepared' to offer me a 12 week adjournment, in order for me to 'find' the money that they had 'deemed' that I owed them.
I know, from my own experience, just how much strain an HMRC bankruptcy puts on a relationship. After 12 years of mortgage freedom, my wife has had to take out a £60k mortgage to 'buy back' my BI in our home - thanks to the most incomprehensible form of taxation in the 'civilised'? world.
This 'Self Assessment' certainly has a lot to answer for. :mad:

TaxAvoider

Hi Rog

4 women Solicitors eh ..... pity you were married My first hearing there was an older guy there, he had a bundle of cases as long as his arm, I was the only "defendant" that had bothered to turn up.

He actually seemed to be on my side, he was surprised that the HMRC had got to that stage even though they themselves had not been able to work out my final liability. At that time, I was hoping for the BR to be refused by the Registrar so I was quite happy to accept the 12 week offer.

As it turned out , that was a blessing, as it meant that I spent the whole Summer holiday not worrying too much. I finished a 2-year Contract the week before my Daughter broke up for the Summer Holiday, we had a wonderful Summer and I even managed to land my next Contract early August to start in September.

Then end of September it was back to the RCJ, this time there was a right old witch representing the HMRC :mad: Again I was the only person she had to face. By now the liability was down to a final amount of approx £35k and I had offered 500 - 600 a month, which would have taken around 5 years to pay off.

Bearing in mind that I have been paying PAYE for most of the last 5 years, it was just that under SA unless you fill those #@#@ forms in they are not able to retrieve your details from the "system" :mad: Ironically for this current tax year they have deemed that I do not need to fill one in :rotfl:

Anyway, for some of the last 2 - 3 years I had made payments of £300 a month, but this was when the liability was deemed to be £90K and the monthly interest was being added at approx £250. I honestly did not see the point so I stopped paying. So, when we arrived, she had a quiet word with me, asked if I was paying the full amount , I said that I had repeatedly informed them of my personal situation, and that had not changed and NO I did NOT have £35K. At times over the last two years, I have been very frustrated and in writing I have told them where to get off even suggesting they would only get their money if I robbed a bank or my Mother passed away :mad: maybe that would make them happy :mad:

The old witch then had the cheek to say "well we are not a Bank, we do not lend people money" :rotfl: They sure do charge interest like a bank though :rotfl: and then she said "if you get a loan then you can pay the £500 towards that"

IF I COULD GET A [EMAIL="#@#@ING"]#@#@ING[/EMAIL] LOAN DO YOU THINK I WOULD BE HERE

Is what I felt like shouting from the rooftops :mad: Anyway then when sat before the Registrar, she had the cheek to say that my offer of £300 was unacceptable to them and they still were seeking the BR Order. This was then granted and that was that.

After all that it was a bit of an anti-climax , I left the room , the witch remained with her arm full of cases that I guess got rubber stamped in a few minutes. It was good to have a final conclusion.

As hinted at earlier, I have been through two years of the Family Court system "battling" with the Local Authority and my ex in order to settle on the best future for our Daughter, after that the BR process really was a walk in the park. Having to stand before three Magistrates and admit that you had been culpable in allowing your Daughter to be at risk of "Serious Harm" was infinitely more heart-breaking.

Anyway, I am now on the road to a brighter future, my Daughter and I live in a very nice Housing Association flat, my promise to her and myself to be in a "nice" house with a big garden by the time she starts secondary school, is a lot more likely now that this is all behind me :j

TaxAvoider

Hi Richard

Thanks for your comments I have no problem paying that amount, I was more than willing to try to find £500 just for the Taxman as long as I was working. My other debts were being reduced gradually and they would have all been cleared within the next 18 months.

Just as a brief note , I have to take my hat off to JOHN LEWIS for the very sensitive way they handled my debt, it was not my largest, but they were ALWAYS considerate when found it difficult to pay the agreed amount for a few months. :T

Paying 70% of my earnings surplus over expenditure for the next three years in return for having NO MORE harrassment from various other creditors :mad: is a price well worth paying. And knowing that if I cannot work for whatever reason, that I will not have to pay anything is also a good feeling, which takes a lot of worry away.

betterlatethannever

Hi TA,
what an amazing post. You really have been to hell and back, but you seem to have the right attitude....your Daughter is the priority!
With your obvious tenacity and forward thinking attitude you WILL succeed.
Bankruptcy can 'make or break' you, you seem to have decided that no matter what, you will not be broken.
I really wish you all the best of luck and hope everything goes your's and your daughters way.

rog2

TaxAvoider wrote: »

Bearing in mind that I have been paying PAYE for most of the last 5 years, it was just that under SA unless you fill those #@#@ forms in they are not able to retrieve your details from the "system" :mad: Ironically for this current tax year they have deemed that I do not need to fill one in :rotfl:
I said that I had repeatedly informed them of my personal situation, and that had not changed and NO I did NOT have £35K. At times over the last two years, I have been very frustrated and in writing I have told them where to get off even suggesting they would only get their money if I robbed a bank or my Mother passed away :mad: maybe that would make them happy :mad:

IF I COULD GET A #@#@ING LOAN DO YOU THINK I WOULD BE HERE ?

HMRC is indeed a strange animal, TA :rolleyes2 . They said to me 'surely you can borrow the money (£72k) from your family, or remortgage (just after my car was repo'd and my credit rating was shot to hell).
Your story is so similar to mine, http://forums.moneysavingexpert.com/showthread.html?t=584800 that it is almost incredible - I am convinced, and remain so, that HMRC 'target' the easiest cases for bankruptcy to cover up their own inefficiencies in dealing with the professional Tax Avoiders (no pun intended). They are uncaring, unsympathetic and ruthless to the point that one can be forgiven for thinking that this is how they 'get their kicks' :mad:

Anyway - I'm really pleased that your life, as mine, is getting back on the right track, and I hope that the sadistic sub-culture that lurks within the anonymity of HMRC will, finally, leave you alone.

Good luck.

TaxAvoider

I just wanted to bring this to the front for anyone else dealing with HMRC , nothing changes !!!!