I've hit rock bottom, online sole trader during bankruptcy advice please?

MyWorldIsOver

Long story short.. owe a lot of money to hmrc and others due to a few years of mental health issues for both me and my partner. During this time my partner tried to end it, and we put our head in the sand and couldn't function. It's been and still is, awful.

Hmrc came knocking, and it has begun. Ended up in doctors due to us planning a joint 'leave' as we couldn't see any other way out. In tears writing this as I'm still struggling to face what my life is to become, it feels like it's over already.

Trying to accept now bankruptcy will happen, we are with the enforcement team with HMRC and owe too much for any payment plans etc. We don't own a house, just moved into a new rental, I have a 20 year old car (I'm self employed and partner also uses it for work as we live rural and there is no public transport to his work or even to go to the shops etc).

Partner has gone back to full time work, I'll be working as a sole trader during bankruptcy (this time on top of my accounts with help from a book keeper etc) but I have a major concern..

I trade online, and I've since learnt you lose your shopify payments, paypals etc.

I can potentially run the business using bank transfers, but from what I can see there are no business banks that will touch me - could I ask if there's any advice or things I might be missing, or if you were a sole trader during bankruptcy did you use your basic personal for BACS etc as I know the banks frown upon it?

It's taken me weeks to post this, I'm shaking to even submit but I could really do with some help.

Thanks all xxxxx

powerspowers

I don’t have specific advice but didn’t want to read & run. It’ll get easier and going bankrupt will not be worse than the stress and uncertainty you’ve had up til now. 

fatbelly

If HMRC make you bankrupt, that will save you the £680 fee

DullGreyGuy

MyWorldIsOver said:
I can potentially run the business using bank transfers, but from what I can see there are no business banks that will touch me - could I ask if there's any advice or things I might be missing, or if you were a sole trader during bankruptcy did you use your basic personal for BACS etc as I know the banks frown upon it?

As a sole trader there is only you so all the money is yours, unlike an incorporated entity where it itself has its own money which is why you need to split the two. There is no legal requirement for a sole trader to have a personal account and a business account however most banks have T&Cs that basically say you cannot use a personal account for business purposes. 

Irrespective of bankruptcy there are plenty of people who do use their personal accounts for their sole trader activities. Occasionally there are stories of people saying they've had a nasty letter from their bank but they are relatively few. Obviously if you do go down this route you will have to give your customer your real name for the OpenBanking security checks whereas with a business account you could have used a trading style (though legally the contracts, website etc must identify the legal entity which is you not the trading style anyway). 

ManyWays

Very sorry to hear this, you and your partner will get through this. A debt adviser I knew had the mantra "You owe them your money, not your life",

I suggest you talk to Business Debtline https://businessdebtline.org/. They are experts on advising the self employed and people with small limited companies about their business and personal debts, and they can help you understand your options and talk you through the practicalities. Do tell them how desperate you two have been feeling.

sourcrates

I always fail to see the point of making someone with no assets bankrupt, just because they can.

Still it will save you having to do it, I know things may seem a bit down now, but once the wheels are set in motion, it might just be what you need.

I second the advice to speak to Business debtline, I`m sue where there`s a will, there`s a way.

Minkym00

sourcrates said:

I always fail to see the point of making someone with no assets bankrupt, just because they can.

Still it will save you having to do it, I know things may seem a bit down now, but once the wheels are set in motion, it might just be what you need.

I second the advice to speak to Business debtline, I`m sue where there`s a will, there`s a way.

Bit surprised at that comment Sourcrates. For one thing it draws a line under debt owed rather than someone continuing to incur interest and penalties. For an individual it can be a welcome relief not having the debt hanging over them.   

sourcrates

Minkym00 said:

sourcrates said:

I always fail to see the point of making someone with no assets bankrupt, just because they can.

Still it will save you having to do it, I know things may seem a bit down now, but once the wheels are set in motion, it might just be what you need.

I second the advice to speak to Business debtline, I`m sue where there`s a will, there`s a way.

Bit surprised at that comment Sourcrates. For one thing it draws a line under debt owed rather than someone continuing to incur interest and penalties. For an individual it can be a welcome relief not having the debt hanging over them.   

Oh yes I agree 100% it draws a line under the debt and is probably the best solution for the OP.

It was more a dig at the blanket approach taken by HMRC, instead of bankruptcy they could just write it all off without the need to go down that path, but I guess it puts a legal stamp on matters doesn't it.