CVL/inheritance

castle96

One of my sons has come to the end of a CVL (creditors vol liq??) and 'seems' to be completely free of his Ltd Coys massive debt.(Sole director). Bar any future credit reference problems, it seems amazing that you can avoid a debt of this size. (Incls HMRC, paye, bounce back loans {no director guarantee!). If it was a bancruptcy/IVA this wouldn't be the case would it?
My worry is that my Will currently says "1/3 to each son"

I remember when my Dad died the solicitor made a bancruptcy check on me (as any creditors would then have knowledge of my inheritance and have first dibs)
IS?? he completely free of any Company (and personal) liability. I find it hard to believe! though this is what I have researched. (Online/Companies House) He will not discuss with me. If it is the case, why doesn't every debtor go this route instead of IVA/banc?

His house (joint/wife) is being auctioned shortly, with no equity/with arrears. There will be debt here to. No doubt a CCJ to follow? He has no income bar benefits. Would my executor (sister), HAVE to tell anyone (how would she know? I/he havent told her - do executors have to take a credit check in the same way as a solicitor would, or a Gazette notice?),

I don't want to leave him 1/3rd of a largish estate if it is gobbled up. If there is a problem, I would leave his 1/3rd to either/both his brothers for them to pass to him.

Any advice appreciated TIA

RAS

Assume this is a follow up to your previous threads regarding your son's (IVA)/CVL?

MSE tends to deal in consumer debt and a CVL is a business debt solution, although there may be people who understand business debt. Maybe one can refer you to the appropriate source of confident advice?

And is this the same son with complex personal relationships? 

castle96

Yes, he's the one

RAS

castle96 said:

Yes, he's the one

Might you want to think about directly supporting his children instead of giving all his portion to him? Any inheritance would have to be held in trust until they were 18 years old. You could even open accounts in their names now as long as he opened the accounts?

castle96

Mmmm. One of the kids now resides in Slovakia with a manipulitive mother. Would son have any 'control over the trust/money?, eg 'education'/other 'needs'. Any other advice re original comments would be much appreciated

Annisele

castle96 said:

One of my sons has come to the end of a CVL (creditors vol liq??) and 'seems' to be completely free of his Ltd Coys massive debt.(Sole director). Bar any future credit reference problems, it seems amazing that you can avoid a debt of this size. (Incls HMRC, paye, bounce back loans {no director guarantee!). If it was a bancruptcy/IVA this wouldn't be the case would it?

If your son as an individual had gone through any kind of insolvency proceedings, then things would indeed be different. But if it's a CVL, then it's your son's company that has gone through the insolvency proceedings - not him.

The "limited" in the name of limited companies refers to the liability of the shareholders/directors - it's limited to the amount they invested/promised to invest in the company's shares. There are exceptions, primarily related to personal guarantees but you say your son didn't give any. It's also sometimes possible to "pierce/lift the corporate veil" and go after directors for the debts of a company - but speaking very generally, unless your son has done something fraudulent that won't be a concern.

The reason people don't choose a CVL instead of bankruptcy/IVA is that they can't. CVLs are for limited companies, and bankruptcy/IVAs are for "natural persons" / living and breathing people.

castle96

Thanks all. Still wondering about his inheritance from me. What about his/their debt to their Lender

castle96

Hi all. Any further comments/advice on this please TIA

Minkym00

If the property is sold with a shortfall then that will become an unsecured debt of your sons. Whether or not the lender bothers to pursue this when your son has no assets and no income is another matter. 

The executor would have to do a bankruptcy check but if your son isn't bankrupt there's nothing to disbar him from accepting the inheritance. It would be up to him if he used the money to pay off his debt(s) but there's no way that the lender will find this out.