Bankruptcy through failing IVA

beeteecee

Hi,

My IVA is likely to fail due to not being able to pay the self-assessment tax due on 31/01/24 for 22/23 through self-employment. I offered HMRC payments to ensure it would all be paid off by Jan '25 but this was not accepted. 
Is it recommended I wait to be made bankrupt or should I do this myself? Are there any benefits to either? 
I want everything to be OK but I can only see bankruptcy, a long BRU and insurmountable amounts of stress. 

Thank you for any guidance  

sourcrates

Have HMRC specifically stated they will make you bankrupt?

Would bankruptcy cause you any specific problems if it happened?

If not, then why should you fork out the £680 ? let them do it, to be honest, it can only be good news for you, as it rids you of all your debts, you won`t get a BRU if you cooperate with the OR, you may get a 3 year IPA if you have disposable income to hand.

I can`t think of a better outcome given your circumstances, try not to stress about it, the process is quite painless unless you have assets they can take, do you?

beeteecee

sourcrates said:

Have HMRC specifically stated they will make you bankrupt?

Would bankruptcy cause you any specific problems if it happened?

If not, then why should you fork out the £680 ? let them do it, to be honest, it can only be good news for you, as it rids you of all your debts, you won`t get a BRU if you cooperate with the OR, you may get a 3 year IPA if you have disposable income to hand.

I can`t think of a better outcome given your circumstances, try not to stress about it, the process is quite painless unless you have assets they can take, do you?

Hi,

Not yet, they've just told me I'm late paying and. My IVA company said:

"The fact that your tax has now gone into arrears would be a breach of the IVA and it is likely that our supervisors may have to go back to creditors and ask what they want us to do. As HMRC are such a large creditor they may seek a bankruptcy order be made against you but if there was any way to avoid this we could try and see."

I tried to setup a payment plan via my HMRC account to get the o/s tax paid but it wouldn't work and requested I phoned them but I'm not in a position to make phone calls, I'll probably have a heart attack.

I have no assets just a lot of dependents. My income is good and I am worried they'll look at this and be like you've intentionally not paid tax for years where in reality, I've been in the IVA and any income has been used to provide for a 7-person family. 

I was mainly concerned it'd look "worse" if I let them do it, plus it means I have to actually go to court right? It's all quite scary when you're not in it but I'd also quite like it all to be over.

Thank you for your reply. 

sourcrates

Honestly, I would not care one bit how it looks, there is no requirement to attend court for bankruptcy these days, its exclusively an online and by post process, unless HMRC requires you to attend, but I doubt it.

What your IVA company have said is just a standard statement, it may not progress to bankruptcy, but I would try to talk to HMRC as soon as possible to avoid this getting worse than it need be.

Borrow a phone, you need to speak to them.

beeteecee

sourcrates said:

Honestly, I would not care one bit how it looks, there is no requirement to attend court for bankruptcy these days, its exclusively an online and by post process, unless HMRC requires you to attend, but I doubt it.

What your IVA company have said is just a standard statement, it may not progress to bankruptcy, but I would try to talk to HMRC as soon as possible to avoid this getting worse than it need be.

Borrow a phone, you need to speak to them.

Thanks - I just wasn't sure.

I offered to pay the debt off over 12 months but they said no so I'm not sure what else could happen at this point. Considering my IVA also includes a large tax debt for previous years.

I feel like it's time to accept bankruptcy as I have no real way out of this hole and just wasn't sure if I should initiate or wait for IP to start the process. 

My mental health makes phone calls of any nature a near impossibility and it feels archaic to write to them but I might have to at this point.