Bankrupcy / Freelance worker. Personal & Limited Company Debts. I am lost, please help.

[The LostOne]

Dear All,

 

I have been reading posts on your website for a while now and the advice has been excellent. Please allow me to explain my current situation:

 

£80k of loans & credit cards

£50k of lost equity

£25k of negative equity

2 x CCJ's

1 x Charging Order

Lots of Default Notices

 

Some of my creditors have accepted my repayment requests (about 50%) but the others seem set on getting me out of the house, even with negative equity.

 

I have never wanted to declare myself bankrupt but after the judge and MBNA's solicitor suggesting that it may not be a bad idea at my charging order hearing on Friday, I am thinking again. I got myself in debt while trying to sell my last house, I spent £30k on credit cards to get it finished them coudnt sell, i then part-exchanged it for a new one but was left with the debts. I took out a consolidation loan to repay them and then came out of work, this money was used to pay the minimum payments etc. When I ran out of money I stopped paying the bills and they started to raise, now at £80k. I am a freelance (self employed) worker and have been working through a number of Limited Companys, as I have not had an accountant I have been submitting no books etc to companys house. As each limited company was disolved (due to no reports being filed) I would open another and start again. Not paying the tax and national insuance etc had kept the debts paid.

 

This is the reason for my panic / stress. I cant sleep, cant eat properly and although I have not told anyone (even my partner) I am terrified of what will happen and I dont know what to do.

 

If the Official Reciever goes through all this company info will I go to jail? I was only trying to provide a roof for my family but it appears this roof may be going shortly.

 

ANY help or advice you could give will be greatfully recieved, I just want to be finished with all this, its killing me.

 

Many thanks

[rapterman]

I thought that I had it bad.

 

When was the last time you worked? Either self employed or employed by someone else.

How were you paid? i.e did it go into your bank.

 

This is a tricky area you are in as from what I can take in from your post you didn't pay any tax or NI from any money you earned. Is this right?

If so, for how long?

You may need to talk to a solicitor about this matter to see what your options are.

[The LostOne]

I have just started working again a few weeks ago but it ends in 2 weeks. All the work I have done in the last 3 years has been like this. I have not paid any tax or ni since then. I have company accounts that the money is paid into.

 

I assume you mean a bankruptcy solicitor or will anyone do?

 

Thanks for the quick reply, nice to know someone is willing to give advice!

[debtinfo]

Hi the lost one, how much have you been earning through this period

[rapterman]

I think that any solicitor could advise you about the tax situation, there are some who specialise in bankruptcy.

 

You could also get some free help from the Citizen Advice Bureau.

 

Are you self employed now?

[The LostOne]

Hi the lost one, how much have you been earning through this period

 

Anything up to about £30k per year so its a lot of tax and ni

[The LostOne]

I think that any solicitor could advise you about the tax situation, there are some who specialise in bankruptcy.

 

You could also get some free help from the Citizen Advice Bureau.

 

Are you self employed now?

 

Yes, still self employed.

 

I spoke to the CAB and they were unsure of where I stood. They also gave me some advice how to get the Charging Order stopped but the TEN valid points I listed were simplt brushed aside by the judge. He wasnt even remotely bothered.

[rapterman]

It looks like bankruptcy would be your best bet but it becomes a bit more complicated when you’re dealing with self employment and the running of any companies.

The tax thing makes it harder as on the bankruptcy forms you’re asked for employment details, either employed or self-employed, and your tax code for the last year.

 

It maybe your only option is to come clean about the tax issue with the HMRC, after seeking legal advice first, they will probably work out what tax you should have paid and bill you for it, but you might be able to put that into the bankruptcy as well but I’m to sure on that.

There is of course the matter of any criminal charges that they may file against you, I don’t want to panic you or anything but it is a possibility, which is why you do need some professional help.

[debtinfo]

Hi it is not likely that you will face criminal charges. It is more likely that in the bankruptcy you may be given a BRO/U which extends the restrictions of bankruptcy for between 2 and 15 years. Whilst this is not a good situation it is nothing to be seriously worried about and should not be something that should stop you going bankrupt if it is the right choice for other reasons

[The LostOne]

It looks like bankruptcy would be your best bet but it becomes a bit more complicated when you’re dealing with self employment and the running of any companies.

The tax thing makes it harder as on the bankruptcy forms you’re asked for employment details, either employed or self-employed, and your tax code for the last year.

 

It maybe your only option is to come clean about the tax issue with the HMRC, after seeking legal advice first, they will probably work out what tax you should have paid and bill you for it, but you might be able to put that into the bankruptcy as well but I’m to sure on that.

There is of course the matter of any criminal charges that they may file against you, I don’t want to panic you or anything but it is a possibility, which is why you do need some professional help.

 

Thanks for the advice mate, will make some calls tomorrow. I am happy to come clean with them as i just want this to stop.

 

Bankruptcy Assistance Programme | Bankruptcy Information UK

 

Anyone tried this lot?

[Dodgy Geezer]

Hi Lost One.

 

I have absolutely no knowledge of how things work regarding limited companies, but i can assure you that all personal tax outstanding can be included in any bankruptcy.

 

HMRC had a CCJ, a charging order, and made me BR for £12k despite my offer of £5k plus £300 PCM.

 

They declined.:) Now they wont get a penny and ALL of the debt has been written off.

 

No wonder this country is in such a state.

 

Can i also add that you should speak to your partner ASAP. Medicine always tastes sweeter if you share it.

 

It is not 100% certain that you will lose your house if you go BR. In fact, they probably wont be in the least bit interested if it is negative equity. Im still in mine.

 

I would suggest that you go and see an Insolvency Practitioner ASAP.

Most will give you 2 hours or so for free if they think they can get an IVA out of you.

 

Do keep asking the questions. Some of us can offer moral support even if we dont have all the answers.

 

Best Wishes.

[rapterman]

Just did a quick look up on tax laws and I think that debtinfo is right in saying that it is unlikely the HMRC would bring any criminal charges.

They are more strict if you had deliberately filed incorrect information, you could always just say that you didn't know you had to file and it was all a big mistake!

Yeah, your best bet is to put it all in writing and see someone about it, either a solicitor or an Insolvency Practitioner and get their advice.

[The LostOne]

Hi Lost One.

 

I have absolutely no knowledge of how things work regarding limited companies, but i can assure you that all personal tax outstanding can be included in any bankruptcy.

 

HMRC had a CCJ, a charging order, and made me BR for £12k despite my offer of £5k plus £300 PCM.

 

They declined.:) Now they wont get a penny and ALL of the debt has been written off.

 

No wonder this country is in such a state.

 

Can i also add that you should speak to your partner ASAP. Medicine always tastes sweeter if you share it.

 

It is not 100% certain that you will lose your house if you go BR. In fact, they probably wont be in the least bit interested if it is negative equity. Im still in mine.

 

I would suggest that you go and see an Insolvency Practitioner ASAP.

Most will give you 2 hours or so for free if they think they can get an IVA out of you.

 

Do keep asking the questions. Some of us can offer moral support even if we dont have all the answers.

 

Best Wishes.

 

Mate, seriously, Thank you very much. I will speak to a BR lawyer tomorrow and try to make some progress. I really appreciate the advice.

[The LostOne]

Just did a quick look up on tax laws and I think that debtinfo is right in saying that it is unlikely the HMRC would bring any criminal charges.

They are more strict if you had deliberately filed incorrect information, you could always just say that you didn't know you had to file and it was all a big mistake!

Yeah, your best bet is to put it all in writing and see someone about it, either a solicitor or an Insolvency Practitioner and get their advice.

 

Thanks Rapterman. I dont even know where to look for all that stuff, probably why I am where I am at the moment! I will definatley be looking for an IP of BR Lawyer tomorrow and I will let you know how I get on.

 

Big thanks to everyone for the advice.

[toddle2u]

Lost One

 

The information debtinfo has given you is correct. You may well get a BRO but that is nothing to worry about it will just restrict you in being a Director of a Ltd Company for the period of the BRO. HMRC are in meltdown at the moment and far too busy to be interested in you. Remember the Companies are disolved so to look into there affairs HMRC will have to get the company restored which costs money and time which is somethingn they do not have either of at the moment.

 

With the level of debts I would advise against an IVA - what would be the point. There is no equity in the house either so the OR will not be interested in this and you can buy your beneficial interest back for £1 plus solicitors costs which is about £250. Make a provision for unpaid tax in the bankruptcy. HMRC will then close you file for any unpaid tax and will open and new oe for you with a new UTR number.

 

Bankruptcy seems the way forward for you and i am sure an IP will advise the same.

 

I would also agree with DG's advise - tell your partner - it will be a relief for you and make things easier in the long run and you won't have to go through this on your own.

 

Need any more help just shout