Bankruptcy question

[dannster]

Hi all,

Thank you so much for your advice so far on a previous thread, it's proved really helpful

I have a quick question re a bankruptcy petition being served on me from HMRC for tax debt when self-employed.

They're trying to serve the petition today for the second time. I no longer live at the address they're serving it to, but my ex-partner still lives there. He won't be there to receive it but he's given me the contact details for the tax officer.

On the letter it says I can choose another date for it to be delivered. I want to dispute the amount they're saying I owe because I didn't submit tax returns for the past three years and so they calculated it based on previous tax returns. They're saying I owe around £100,000 but I certainly didn't earn anywhere near that to owe so much tax!! I'm predicting I owe about £40,000.

Do you think I could request some time to calculate how much I owe and get my outstanding tax returns submitted?

I'm very nervous about making the call

 

[Method Man]

Are they going to receive any money and are you going to oppose the bankruptcy and offer either an IVA or a debt management plan?

If not then it seems a futile exercise and not worth spending the time on.

Agreement of HMRC's claim in the bankruptcy will be one of the Trustee's duties. However, if there is no prospect of funds becoming available in the bankruptcy and, in turn, a payment made to your creditors then they are unlikely to go about submitting o/s tax returns.

If a Bankruptcy Order is made against you, you will have the opportunity to raise your dispute over the amount of HMRC's claim when you attend the interview with the Official Receiver. At least then your dispute will be on record.

If there are other creditors including people you know and there is the prospect of a dividend being paid to them in the Bankruptcy then, morally at the very least, you ought to mitigate HMRC's claim so that they can leave more of the pie for the other creditors.

 

[dannster]

Thanks Mathod Man,

I don't have any assets, I rent, I don't drive and I don't have a high enough salary to pay off the debt they're claiming. In my situation it feels right to be made bankrupt but the more I discuss it with people, the more I'm advised to avoid it if I can.

I'd prefer to set up an IVA, but would they accept this even at this late stage where they have the petition ready to deliver to me?

Would you know how to go about setting up an IVA?

 

[Method Man]

Thanks Mathod Man,

I don't have any assets, I rent, I don't drive and I don't have a high enough salary to pay off the debt they're claiming. In my situation it feels right to be made bankrupt but the more I discuss it with people, the more I'm advised to avoid it if I can.

I'd prefer to set up an IVA, but would they accept this even at this late stage where they have the petition ready to deliver to me?

Would you know how to go about setting up an IVA?

............... PM sent

 

[dannster]

Thanks Method Man for your PM. I may call you tomorrow if that's convenient?

I spoke to the guy from HMRC who's delivering the petition. I asked if even at this late stage could I submit an IVA proposal and he said absolutely.

He said I should go through the Citizens Advice Bureau to get the ball rolling. Would this be the correct approach? Or should I go through an organisation that deals with IVA's?

Overall, he was very friendly and understanding and he's visiting me next Friday and will go through what happens next.

 

[Bob]

Sorry to hear of your problems but in your position - no assets and debts of £40K + - I would definitely recommend bankruptcy and not an IVA. Start again with a clean slate

 

[Method Man]

Give me a call mate.

An IVA sounds like it could be a whole lot of trouble for you compared with the Bankruptcy.

Leave the CAB until after we've had a chat. I don't take IVA or Bankruptcy appointments so I'm impartial.

 

[lead]

After analyzing your problem i would also suggest that you should go for bankruptcy.
Bankruptcy is the best option for you.