Bankrutpcy Advice needed

Kier75

Hi

 Having watched some videos on youtube. Most importantly one by Money Nerd. I find myself here desperately after advice. I've written as much back story as possible.

Back in early 2016 I found myself thrust into the world of setting up an LTD company as a way of being paid for the role I was about to take on. It was a big jump for me. Not only was I in a management position, but I was also going to be earning more than ever before. The idea of a Limited company did scare me a little as I didn’t have the first clue about accountancy. Friends assured me it was easy, but I’d probably be better of using an accountant. I went to one of the industry leaders - Brooksons. The fees seemed a little steep, but what did I know. It’s all new to me.  

I didn’t know how to distinguish funds. I knew that I was paying myself a fee as a director of the company (as advised), And the rest was being paid in dividends. Understanding/believing that effectively, anything paid to me was my wage, I didn’t realise that I had to treat myself as an actual business. Other than saving receipts for VAT purposes. I never took advantage of any of the cost-cutting claims I could have got as a business because again, I wasn’t treating myself as a business.

  I plodded along for the first couple of years blissfully unaware of spending. Mainly appreciating the fact that I could buy things I wanted when I wanted for the first time ever. I was able to go on holiday with the family and help some friends out financially. Everything seemed hunky-dory with regards to paying the bills, paying the corporation tax, VAT etc. 

Due to health issues, my Fiancé had to stop working, but Charlie big potatoes me figured we’d be able to continue living our happy existence. And we did, we continued to live our lives as we had previously. But less money coming in.

I started to notice that things weren’t right in early 2019. I tried to tighten the purse strings but was already discovering, the more I was trying to fix the problem I was making it worse. The more I took out to pay the business bills,  my personal tax was rocketing. (Still thinking it’s my money in the business). I was drawing money from the business to pay self-assessment. And that’s the initial vicious circle I was finding myself in.  From this point on I was starting to bury my head in utter fear. Dreading seeing anything to do with the banking side of the business. At the end of 2019, I panicked and started looking into how I could realistically deal with the situation. I googled and found a solicitor called Wilson field. Having discussed my situation with them they suggested the best way forward would be liquidation. After an initial look at my accounts, I was assured that I wouldn’t be owing any more than £29,000. By the end of their work, however, having taken me officially into liquidation. The most recent figure they have told me is that I’ll owe is £42,415. I’m not questioning that amount. As mentioned, several times, I haven’t got a clue!!

In between then and now I was also hit with my Self-assessment for 20 – 21. Something again I was naïve about, thinking it would be part of the insolvency of the company. Brooksons had previously dealt with the self-assessment on my behalf.

Summing up. I currently find myself with a business debt of £42,415 and a personal tax debt of £23.000. Pretty much all to HMRC. I’m a contractor with at best 10 months left on my contract.  I’m looking for advice. Is bankruptcy an option as currently, I can’t see any way out of this hole, I find myself in.

I know the above will no doubt read like I’m the stupidest person in the world. If you met me, you’d see I’m not. I'm a grafter that's just made a pig’s ear of this. I’m not looking for sympathy, I royally screwed up and it's my own doing. I am however tired of putting on a brave face and the dark thoughts that increasingly appear at the forefront of my thoughts.

thanks

Kier75

 

luvchocolate

I think your best bet would be to contact business Debtline. They are a debt charity so no charge for advice 

sourcrates

Personal, simple Bankruptcies are more or less pretty straight forward in most cases, and this forum can usually help with basic advice on that kind of thing.

You, on the other hand, want advice on limited company insolvency, which I don`t have to tell you is a very specialised and complex area of insolvency law.

As such, I think the best advice your going to get on this, as stated in post # 2 # above, is to contact Business Debt line.

Unless you have a plan to repay the tax debt, then Bankruptcy may be the only other option.

Minkym00

So to confirm, Wilson Field liquidated your company, and are now pursuing you to repay funds you took from the company that were due to HMRC, correct? Assuming that is correct, I doubt Business Debtline can assist now as the company has already been liquidated. 

In addition you have your own tax liability.

So the questions are do you have the means to repay the personal tax debt, bearing in mind HMRC will only agree a “time to pay” period of 12 months, and do you have a property? If so the liquidators might pursue you into bankruptcy anyway. 

Kier75

Minkym00 said:

So to confirm, Wilson Field liquidated your company, and are now pursuing you to repay funds you took from the company that were due to HMRC, correct? Assuming that is correct, I doubt Business Debtline can assist now as the company has already been liquidated. 

In addition you have your own tax liability.

So the questions are do you have the means to repay the personal tax debt, bearing in mind HMRC will only agree a “time to pay” period of 12 months, and do you have a property? If so the liquidators might pursue you into bankruptcy anyway. 

Hi

 Yes Wilson Field liquidated the company and are pursuing me to repay funds owed to HMRC.

 So I might just be able to scrape the personal debt, I'm a renter with pretty much zero assets.

Minkym00

So, you have two options.

1. Go bankrupt and have all of your debts written off. You have no assets to protect and you will rebuild your credit rating in time.

2. Delay the liquidators until you can pay off your personal tax liability then advise the liquidators that you have no assets. They would be wasting money by then pursuing you into bankruptcy if you have no means to pay them. This is a riskier option as they could make you bankrupt anyway, in a which case you needn’t have paid HMRC. But this is very unlikely as they are a commercial entity and would only make you bankrupt if they would benefit from it.