Being self employed after BR

Cinderbrook

Hello,
This is fast becoming my favourite, if not over-used forum, so another question please.

I have just spoken to my excellent case adviser at one of the debt charities and told him that I think I should apply to go bankrupt. He agreed that it was the best course of action for me at this time. He surprised me rather by saying that I could save myself some money by not making myself br but writing to my creditors and letting them know my circumstances ie not currently working and voluntarily surrendering my property to the mortgage company. He said that that might spur them into making me bankrupt therefore I wouldn't have to pay the br fees of £485. I found this quite funny really - a money saving tip whilst talking about BR. Has anyone else had this advice? I'm not sure about living through the hell of creditors phone calls etc which up until now have been quite pleasant.

The main point he made was that as I will be going back to being self employed in the future, he thought there might be legal issues with this that I should discuss face to face with the CAB. Basically as a self employed person I would be contracted by various companies as a sole trader, I wouldn't be employing anyone myself or paying VAT or owning anything. In other words I would be employed for my own services (I do realise this makes me sound like a lady of the night, but no). Does anyone know what issues there are surrounding self employment? I thought this was allowable under br and it was only a problem if you wanted to run a company etc?
Hope someone can help with this, my CAB are snowed under and I can't get to see them for weeks now.
Best regards.

debt_doctor

Hi, I find it very ulikely that anyone will petition for your BR, as it will cost them around £ 1200 and they may well see no return for that.

With BR and being self employed this should be ok providing you trade under your own name or the name you traded under prior to your BR.

DD

fermi

I think your advisor was a little naive about the likelihood of a creditor making you bankrupt.

Creditors/DCAs love to use bankruptcy as a threat to scare you, but the chances of any of them doing it are minuscule unless you have substantial assets. It would costs a creditor from £590 - £1700 (ish) in fees and legal costs to petition for your bankruptcy, and they have no guarantee of getting any of that back let alone the original debt.

About the only creditor that will actually do it is the Tax Man or someone with a grudge who is prepared to spend the money come what may.

While you are undischarged (or have a BRU/O) you cannot act as a director of a limited company. You can certainly be a sole trader, but it will be next to impossible to get credit or a business bank account.

But others here can probably comment more on the business side.

Cinderbrook

Thank you both. I think the reason my adviser said that is that I am not working at present and so if I wrote to the creditors and told them that, they might then start bankruptcy proceedings. He is from one of the main debt charities.

tigerfeet2006

If you are in that situation then in our experiance on here you are more likely to see a pig fly than have one of your creditors petition for your BR. As Fermi and Debt Doctor have said it will cost them a lot of money to do it and they don't like to throw money away they prefer to add charges and threaten you.

You may be due remission on your court fee's if you are on benefits or a low income so would only have to pay the OR's fee of £335.

fermi

Cinderbrook wrote: »

Thank you both. I think the reason my adviser said that is that I am not working at present and so if I wrote to the creditors and told them that, they might then start bankruptcy proceedings. He is from one of the main debt charities.

With the greatest respect to those who work for the debt charities (especially as some post here ), a small proportion of their advisor's seems to be err...... "lacking" in knowledge when it comes to bankruptcy.:rolleyes:

The only occasion I can think of when I've heard of a mainstream creditor/DCA petitioning for someone's bankruptcy, they made such an appalling mess of it that the bankruptcy was eventually annulled!

maxmycardagain

it seems HMRC are the most likely to make you BR, on paper i owe em £9000 and havent argued hoping they will............bet they wont tho

Savvy_sewing

The tax man was the one that bankrupted me, and as I didnt have a single asset by the time he did, I am paying off the amount of Tax I would be earning this year. I dont know when I will get a discharge though.

fermi

Mooloo wrote: »

The tax man was the one that bankrupted me, and as I didnt have a single asset by the time he did, I am paying off the amount of Tax I would be earning this year. I dont know when I will get a discharge though.

It certainly won't be any longer just because you owed HMRC.

rog2 on this forum was made BR by HMRC for around £60-70K I think, and still got early discharge after about 6 months.

How busy your OR's office is with new cases is a bigger factor.

HEADACHE

Being BR and self employed is ok as all your tax is written off upto date of BR.
So the first £5K is tax free from the moment you start earning again,get a co op cash minder account and pre pay debit card and you wont have any problems.Make sure that youve paid all your suppliers up to date,and service providers like phones,net etc.you can only get £500 in credit so try and work out a deal.Also,make sure you have enough money to keep going for 3 to 4 weeks from the date of BR as your bank a/c's will be frozen so get out the cash to keep going.The first 2 weeks were hell for me,now its 3 weeks gone and ive just put it behind me.LIFE IS FOR LIVING.

Cinderbrook

My response at the time was, well how does that work then? I also feel that I wouldn't really want to live through waiting for the creditors to add charges etc. My gut instinct was that it would cause me more stress and trouble than I want. Also in time I will have a decent job and then would just be walloped with extra arrears etc. I knew myself that the best course of action for me is to apply for br and take the responsiblity but also just get it sorted and move forward.
Thanks all
C