Company insolvent, overdrawn DLA, HMRC debt and no personal assets

Discussion in 'Insolvency' started by Timaru64, Mar 5, 2020.

  1. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

    5,957 1,906
    The Spongebob plan is only for companies that don't have any assets. Yours does as it has a £28,000 debt from yourself
     
    Posted: Mar 5, 2020 By: Ian J Member since: Nov 6, 2004
    #21
  2. Timaru64

    Timaru64 UKBF Newcomer Free Member

    11 0
    Thank you on this info. What would happen with my existing bank accounts? And would I be able to get bank accounts once one year passes and I am discharged?

    Regarding "shadow director", if my wife would run the company, then she would run it completely. I would just be an employee, a workman. I would not even own shares until I am discharged, then we could decide what to do.
     
    Posted: Mar 5, 2020 By: Timaru64 Member since: Mar 5, 2020
    #22
  3. Mr D

    Mr D UKBF Legend Free Member

    22,064 2,593
    Unrecoverable asset.
    Though the £3500 would probably be.
     
    Posted: Mar 5, 2020 By: Mr D Member since: Feb 12, 2017
    #23
  4. Timaru64

    Timaru64 UKBF Newcomer Free Member

    11 0
    So does this mean I cannot use Spongebob? What can I do then as I have no money for Insolvency Practitioner. I worry that if I just do nothing, there will be more and more penalties given to my company and it will owe more and more.
     
    Posted: Mar 5, 2020 By: Timaru64 Member since: Mar 5, 2020
    #24
  5. Mr D

    Mr D UKBF Legend Free Member

    22,064 2,593
    Well you do have the £3500 owed to the company. So its not no money available.
     
    Posted: Mar 5, 2020 By: Mr D Member since: Feb 12, 2017
    #25
  6. Timaru64

    Timaru64 UKBF Newcomer Free Member

    11 0
    I understand, but if the client refuses to pay, then I do not have this money, so it is only theoretically available. I looked into IP and the ones I looked up all wanted payment in advance, and I do not have this money. Seems I am in chicken and egg situation.
     
    Posted: Mar 5, 2020 By: Timaru64 Member since: Mar 5, 2020
    #26
  7. Mr D

    Mr D UKBF Legend Free Member

    22,064 2,593
    Client refuses to pay - there's legal action.
    Client still refuses to pay there's enforcement action.

    How far do you want to push to get that money or are you writing it off?
     
    Posted: Mar 5, 2020 By: Mr D Member since: Feb 12, 2017
    #27
  8. Timaru64

    Timaru64 UKBF Newcomer Free Member

    11 0
    I understand, but the legal action also has costs. I looked into this already and two days ago I have emailed the client asking for immediate payment of the remainder of the invoice. The email also says if they do not pay I will issue Statutory Demand under Section 268(1)(a) of the Insolvency Act 1986. I got no reply but I know they got the email.

    So if I need to go to small claims court, this costs around £200 which I do not have. I also do not know what their response will be and on what grounds they will dispute payment, what if they do not pay saying (for example) that the wall was not painted well enough or something like this and this drags on for a long time?

    I am not proposing to write it off, but I am wondering if I could do Spongebob whilst still pursuing that debt and if I do recover the money then either use this money to pay all creditors in proportion of the debt and continue with Spongebob or to find IP at that point and use this money to pay for IP?
     
    Posted: Mar 5, 2020 By: Timaru64 Member since: Mar 5, 2020
    #28
  9. JEREMY HAWKE

    JEREMY HAWKE UKBF Legend Full Member

    4,933 1,645
    I am thinking that this could be OK for Bob's plan
    This 3k that's is owed to the company is peanuts that may not even get paid to him
    If it did get paid to him there would be a few bank charges and this and that and there would be nowhere near enough to pay an IP in the end !

    I agree with @Alison Moore you should get a job and forget any ideas of starting another company

    As much as I would like to offer advice and unlike the others I feel that you maybe able to use the Spingbob plan . I also think that you are a feckin nightmare at running a company and you will simply do the same thing over again
    Use Bobs plan if you can be 100 per cent honest with HMRC and find an easier life
     
    Posted: Mar 6, 2020 By: JEREMY HAWKE Member since: Mar 4, 2008
    #29
  10. eteb3

    eteb3 UKBF Regular Free Member

    166 25
    Any chance the OP has a claim against his accountant for negligence?

    Does seem odd that no flag was raised when things have got this bad.
     
    Posted: Mar 6, 2020 By: eteb3 Member since: Jul 18, 2019
    #30
  11. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

    11,477 2,366
    The bankruptcy can be for three years or may be for one year, I think it depends upon your actions, but not automatically one year
     
    Posted: Mar 6, 2020 By: Chris Ashdown Member since: Dec 7, 2003
    #31
  12. Timaru64

    Timaru64 UKBF Newcomer Free Member

    11 0
    @JEREMY HAWKE: Thank you on your opinion regarding Spongebob plan. I know now I was not running the company well but I did not have the knowledge - I relied to accountant to tell me what I can and cannot do. Now I am much wiser and will change the accountant and I believe I will run the next company properly.

    @Chris Ashdown: Thank you on the info regarding bankrupcy. I think I will try to avoid this and pay the debts instead.

    @eteb3 - Regarding the accountant - I googled accountant negligence but now that I know where to look, I checked accountant's accounts on the company house and there is no money.

    What the accountant did is make all paperwork look "official" for people coming from the eastenrn europe. There was even a rubber stamp on the letter of engagement that as a part of the rubber stamp had a picture of the crown - because in my country all official documents are stamped. It took me a while to realise that nobody stapms anything in UK and that it is the signature that matters. In my country it is the stamp that matters.

    I did email the accountant asking why my filing at companies house is wrong and she called me back and I could hear from her voice that she is really scared. But right now I have no energy to try to sue her especially when I think I will not get anything back and the only way I could sue is no win no fee. I do not know if they have any liability insurance. Is there any point of suing them? Would it help with HMRC opinion?
     
    Posted: Mar 6, 2020 By: Timaru64 Member since: Mar 5, 2020
    #32
  13. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    3,486 436
    Pros:

    Your ordinary unsecured debts will be wiped out through Bankruptcy

    Cons:
    • Bankruptcy lasts for one year (unless discharge is suspended).
    • You cannot be a Director whilst Bankrupt
    • Any windfall received in that one year will vest in the Bankruptcy estate
    • Your credit rating will be damaged for 6 years so you will not be able to get a house until after then.
    • If you have surplus income after allowing for your reasonable living expenses you may have to make contributions into your Bankruptcy estate for 3 years
    • Your bank accounts might be frozen so recommend you open up a new 'basic' bank account with a different bank pre Bankruptcy so that you have a fall back option
     
    Posted: Mar 6, 2020 By: Lisa Thomas Member since: Apr 20, 2015
    #33
  14. Timaru64

    Timaru64 UKBF Newcomer Free Member

    11 0
    @Lisa Thomas - thank you very much on such clear Pro/Con list. At the moment I think I will try not to go bankrupt personally and pay back personal debts. Personal loan taken was to pay back part of company debts and it all spiralled out of control.
     
    Posted: Mar 6, 2020 By: Timaru64 Member since: Mar 5, 2020
    #34
  15. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    3,486 436
    Best of luck.
     
    Posted: Mar 6, 2020 By: Lisa Thomas Member since: Apr 20, 2015
    #35