Sole Trader income payments

NIC71

Hello,
I’m a sole trader and I usually get paid at the end of the month by my customers.
However some customers will pay straight away one time, and with a few weeks another time. There’s no way of knowing. I am submitting my bankruptcy tomorrow.
I need to send invoices so I am paid for next month.
I’m worried a payment into my account may get refused because the account will be frozen.
Obviously I don’t want to make my customers aware of my BR. So if this happens I’m not sure what I’d do. Some payments are from abroad (India/China) so if these get refused it will be difficult to get the payment resent.
Could anyone advise what would be best to do?
Many thanks

TripleH

Is the account a business account or a personal account and which bank is it with?

There are people who can offer far more advice on this than me but it would be useful for them to know the above.

Also I assume it is too late for you to send them new account details to pay the funds into? Am sure someone will suggest opening a basic account.

Flyright

Any money you are owed by customers when you declare bankruptcy will be an asset in the bankruptcy to be collected by the Official Receiver.

TheGardener

Flyright wrote: »

Any money you are owed by customers when you declare bankruptcy will be an asset in the bankruptcy to be collected by the Official Receiver.

Not quite true. If these payments are actually NIC71's (OP) income and are needed for everyday living then they will of course be included in as part of the OPs income assessment but wont necessarily be 'collected' as an asset.

OP - Open a basic personal account with someone like Barclays or Nationwide. This account should be declared on your submission form as your 'everyday' account. It may be frozen briefly by the bank at the point that you go BR but the OR usually writes to banks to tell them they have 'no interest' in a BRs everyday account.

As for your customers - you could tell them you are in the process of 'switching' banks and could they either hold off their payments for a few days or make them to the new account.

If you are using a business account then this is something to discuss with your OR or perhaps best talk to Business Debtline before you do anything.

Flyright

I think you'll find that the Official Receiver will consider money owed to a self employed trader as book debts to be realised as assets.

TheGardener

Flyright wrote: »

I think you'll find that the Official Receiver will consider money owed to a self employed trader as book debts to be realised as assets.

And I think that if the OP is dependant on those payments to pay their rent/utility bills/food etc - the OR will ensure they have sufficient to meet those essential bills

JCS1

Sorry, but book debts are classed as an asset and will go to the OR.

NIC71

Sorry, I should have said the bank account is a personal account and is also a basic account. Business debtline advised me to open a basic bank account when i was considering an IVA. I think holding off sending invoices until I have spoken to the OR would be a good idea thank you.

NIC71

I’ve been told by business debtline and my accountant that income will be seen as income and not an asset. Otherwise If they took my income away, I have no way of paying my bills or contributing towards an IPA. It doesn’t make sense to regard it as an asset.

NIC71

TheGardener wrote: »

And I think that if the OP is dependant on those payments to pay their rent/utility bills/food etc - the OR will ensure they have sufficient to meet those essential bills

Yes this is what I’ve been told

JCS1

Get business debtline and your accountant to read this


https://www.insolvencydirect.bis.gov.uk/casehelpmanual/B/BookDebts.htm