Husbands massive debt

Mariew89

Hi, I’m looking for advice please.  I’ve recently found out that my husband has a massive debt to HMRC and is also in arrears with a few credit cards.  He’s a company director.  We’ve been struggling during covid, but I’ve only just found out the extent of it. He’s buried his head in the sand and I want to know where I stand in relation to these debts, will they affect me, our house etc. also because he’s burying his head, I need to know how to move it forward, whilst we still have some control. 

[Deleted User]

Start with detailing a SoA and post on the DFW boards.  

Once you know where you are, you can chart your way out.

MissFlossy222

Are the debts in your husband's name or in the company's name?

Mariew89

The HMRC is in the company’s name and one credit card, the other credit cards (3I think) are in his name.

zx81, sorry for my ignorance, but what is a soa and dwf board?

[Deleted User]

Statement of Affairs
Debt Free Wannabe

They'll help you go through your options.

Mariew89

He doesn’t want to go bankrupt, although I think he might not have a choice, unless his business picks up.

How will a bankruptcy affect me and our house, can I be forced to sell? 

luvchocolate

HMRC will normally make debtors bankrupt..
It would be best to contact business Debtline they are a debt free charity to advise businesses 

Minkym00

So to be clear, the company owes HMRC, but also your husband has personal debt?

As a director is he not liable for company debt unless there is what is known as “misfeasance”. Misfeasance is basically director misconduct, and would include things such as transferring assets to himself, transferring assets to another of his companies, excessive wages, successive unpaid director’s loans, excessive pension contributions etc. If the company does end up being wound up by HMRC then the company books would be investigated. If the company has no other debts than HMRC then it would look suspicious i.e. if paid all his debtors except HMRC then he “preferred” the other creditors, when all should be treated equally. Under those circumstances he can be personally pursued and any asset he has (i.e. 50% of your house if jointly owned) would be pursued. At that point bankruptcy should be considered, but more information needed and he/you should seek advice from an organisation such as Business Debtline first.

Grumpy_chap

How big are the "massive" debts? 
In relation to normal income?
Are there any assets?
Are the debts to HMRC part of the normal cycle of business, or overdue liabilities?

Mariew89

Thanks, he’s got a telephone appointment with HMRC today and I’m going to contact the business debt place, so I can weigh up my situation.  I’ve been somewhat blindsided over the last few days after finding out.

His personal debt is around 20k, but his business debt is around 250k, (200k of which is for tax and 109k, is tax arrears) his business has no assets and employs two people.

tom9112

I'm sorry to hear that your husbands situation, and this clearly has an effect on you as well. As a former bankrupt I did hide my head in the sand before the things collapsed completely. It will affect you in more than money way, but always discuss your options directly with debtors or your appointed professional to deal with the situation, never assume anything and don't relay on internet search because you will have biased opinion regardless of your findings.

A 300k debt is a huge problem, however with HMRC you should be able to negotiate, assuming there were no scams/dodgy tax filings involved.

At this level of debt and situation your husband should speak with professional business lawyers.