Bankruptcy help

Thescubadiver

Hi I have a friend who has found himself in a bit of a pickle and am after some advice to help him

He has a shop which provides a service to customers, he is also a sole trader
this is what he currently owes

Personal loans and credit cards  £26,686.00
Business loans and credit cards £58,601.58
Business overdraft                      £19,998.84
VAT Man                                     £60,000.00
Tax                                              £30,000.00
Customers                                  £24,665.00
Suppliers                                    £18,400.00
Liberis                                        £34,318.76
 Total                                         £272,675.60

As you can see its a lot of money

He does have a car worth £2000.00

He has managed to get another job starting in January with a take home of £1997.00 a month

His wife currently has debts of £14,105.00
Plus car finance currently owing £15,45.00

There monthly expenditure is

Rent             £1300.00
gas/elec       £155.00
water           £71.00
council tax   £202.00
life ins          £20.00
food            £580.00  ( 2 adults and 2 kids)
Travel         £120.00
phone        £160.00
TV             £15.00
clothing      £20.00
health care £56.50
car ins       £130.00 (both)
Sky           £130.00
Total       £2,959.50

His wife brings home £1700.00 + his new wage £1997.00 = £3697.00 
child benefit £110.00

Total income £3807.00

but his wife has payments for her car and credit cards of £1086.00

so they will have a short fall of £238.50

when he goes bankrupt and fills out the form does he just put in his half of the bills
if so he will have an excess of around £500.00 a month, do you think he will have to pay this towards his debts ?

But if this is the case his wife will have a rather large shortfall for her outgoings

Any advice would be greatly appreciated as he is having to do this himself as he did go and see
someone but they wanted £3K to do it

elsien

He needs to fill-in his expenditure much more accurately than he has there. That’s quite a lot missing (car tax and maintenance? Petrol? Birthdays and Christmas for the children?) and I’d be surprised if he was paying sky £130 a month. is that really £160 for one phone?
Has he looked at the SOA templates at all?

Thescubadiver

Thanks no i download a form form citizen advice but will look at SOA templates

The £160.00 is for both phones and yes they are currently paying £130.00 a month for sky

elsien

He may find that the official receiver would query that level of cost. What does the sky payment cover?

RAS

He needs to separate out his business debts from his personal debt, as in what is "tax"? HMRC aren't particularly forgiving.

Once he knows what he owes to whom business wise, he needs to speak to www.businessdebtlne.org, assuming England or Wales. 

Thescubadiver

RAS said:

He needs to separate out his business debts from his personal debt, as in what is "tax"? HMRC aren't particularly forgiving.

Once he knows what he owes to whom business wise, he needs to speak to www.businessdebtlne.org, assuming England or Wales. 

    Tax is what he owes to the tax man from his self assessment's for the past few years

  Will all his debts not go together as he is a sole trader ?

Thescubadiver

elsien said:

He may find that the official receiver would query that level of cost. What does the sky payment cover?

 its the full sky package plus netflix, he is going to see if he can get this coat down

I have googled the SOA form but do you know where I can find one that shows what the allowed expenses are ?

elsien

https://bankruptcyguide.co.uk/bankruptcy-living-expenses-allowances/

He needs to put in some day out or entertainment expenses as well. He has two children. It’s not reasonable to expect that nothing is done with them.

Keep_pedalling

How has he managed to end up owing customers nearly £25k? Don’t they pay him?

Thescubadiver

Keep_pedalling said:

How has he managed to end up owing customers nearly £25k? Don’t they pay him?

They have paid for the goods but he has not ordered them and cant as is maxed out on his credit with the suppliers

RAS

So it possible that he'll be also facing Trading Standards investigation? He could have asked the clients to buy the materials.