Stat Demand, DLA, Bankruptcy, Marital Home

Discussion in 'Insolvency' started by Woodstain Wally, Apr 28, 2016.

  1. Woodstain Wally

    Woodstain Wally UKBF Newcomer Free Member

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    Replying again to UKCA -

    I've re-read the stat demand and can see no reference to the PG for the company bank loan. Please clarify your point.

    Thanks

    WW
     
    Posted: Aug 24, 2016 By: Woodstain Wally Member since: Apr 27, 2016
    #21
  2. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    Hi - On assumption TIB was not interested in property and mortgage not in arrears etc Bankrupt continues paying mortgage in normal way.

    Bankrupt would almost definitely not be able to remortgage or get a new mortgage as credit rating will be shot for 6 years from date of Bky Order.
     
    Posted: Aug 24, 2016 By: Lisa Thomas Member since: Apr 20, 2015
    #22
  3. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

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    You say in your first post that your overdrawn DLA is £36K yet the statutory demand is for £82K.

    What have the liquidators added in to get to to £82K? - I assumed it was the PG'd borrowings but looks like I am wrong on that front.
     
    Posted: Aug 24, 2016 By: UK Contractor Accountant Member since: Sep 18, 2013
    #23
  4. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    1,909 241
     
    Posted: Aug 24, 2016 By: Lisa Thomas Member since: Apr 20, 2015
    #24
  5. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    I would guess either further drawings post the last set of accounts or illegal dividends.
     
    Posted: Aug 24, 2016 By: Lisa Thomas Member since: Apr 20, 2015
    #25
  6. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

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    He said the £36K built up over a number of years!

    Have the liquidators just slapped any old figure in? or more likely every single drawing from the company post the last accounts.
     
    Posted: Aug 24, 2016 By: UK Contractor Accountant Member since: Sep 18, 2013
    #26
  7. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    Possibly but I would think they would normally write to the Director/s before issuing a Stat. Demand for an explanation of the drawings.

    It would be unusual to simply send a Statutory Demand with no back up/breakdown and no prior communication regarding how the figures have been arrived at.
     
    Posted: Aug 24, 2016 By: Lisa Thomas Member since: Apr 20, 2015
    #27
  8. Woodstain Wally

    Woodstain Wally UKBF Newcomer Free Member

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    The Stat Demand says it includes all advances made to me after the last accounts. I didnt see it as worth challenging since I dont dispute there is a debt greater than the £5k minimum. We'll be lucky if bankruptcy realised £15k, let alone £80k.

    They have revised it down somewhat to £74,612 in the petition. Again with no detail or substantiation.

    My employment contract has just been extended, meaning I could possibly increase my previous derisory offer to settle of £1500 to a better figure but is it too late to do a deal? Hearing is end of Sept.
     
    Posted: Aug 24, 2016 By: Woodstain Wally Member since: Apr 27, 2016
    #28
  9. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    It's never too late to put forward an offer but £1,500 might not be sufficient to convince TIB to halt proceedings.

    You could consider giving a larger offer secured by a second charge on one of the properties. This might be more attractive.
     
    Posted: Aug 24, 2016 By: Lisa Thomas Member since: Apr 20, 2015
    #29
  10. Newchodge

    Newchodge UKBF Big Shot Free Member

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    Thanks Lisa
     
    Posted: Aug 24, 2016 By: Newchodge Member since: Nov 8, 2012
    #30
  11. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

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    Looks like they have done just that:mad:

    Who are these Liquidators?
     
    Posted: Aug 24, 2016 By: UK Contractor Accountant Member since: Sep 18, 2013
    #31
  12. Woodstain Wally

    Woodstain Wally UKBF Newcomer Free Member

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    Baker Tilly, represented by Blake Morgan solicitors.

    I've had a look but cannot increase my offer to settle. So I am writing to them anyway, clarifying some of the pointers to why pursuing this bankruptcy doesn't look attractive commercially, but I won't be opposing it. I may or may not send it; I'm warming to bankruptcy...

    I'm now wondering what I should say at the (presumably 5 minute) hearing, that might be helpful?

    Many thanks to Lisa for the brief phone discussion today.
     
    Posted: Aug 24, 2016 By: Woodstain Wally Member since: Apr 27, 2016
    #32
  13. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    I think there will be little you can say at the hearing that will make any difference to the outcome.

    You're welcome for the advice - I hope you can reach a settlement agreement with them.
     
    Posted: Aug 25, 2016 By: Lisa Thomas Member since: Apr 20, 2015
    #33
  14. Woodstain Wally

    Woodstain Wally UKBF Newcomer Free Member

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    Hi all, couple of further questions.

    1. What do about the possibility that I will have to continue paying mortgage on 2nd property, if the TIB decides to collect all the rent (and pick up expenses). Heard the term 'defray'?

    Ground rent and service charges will obviously need to be paid also.

    2. I am also paying off a self assessment debt over the coming 12 months at about £400 pcm. What happens to that (and other HMRC amounts coming due) in BKY?

    All advice gratefully received.

    WW
     
    Posted: Aug 26, 2016 By: Woodstain Wally Member since: Apr 27, 2016
    #34
  15. Nigel823

    Nigel823 UKBF Contributor Free Member

    84 9
    Hi WW

    sounds to me that we have/had experienced similar issues & if you are interested I have attached the link to my original post [get yourself a coffee/beer if you are going to read it] & for what its worth I elected to declare myself bankrupt.

    http://www.ukbusinessforums.co.uk/threads/director-disputes-liquidators-allegations.326024/

    Lots of reasons but ultimately I felt the whole thing was a 'fishing expedition' I was up against a 'low life bully' [liquidator] & IMO the Courts are useless, they take the easy option every time, even when I had proved that the Solicitors acting for the Liquidator had lied - dreadful experience, unfortunately [some] lawyers do lie!

    What I can confirm though is that you can re-build your career/business after bankruptcy, that's not to say your credit rating will be shot at, but over time you can re-build it.

    I have re-taken control of my business as director & major shareholder [think you mentioned that you were still a shareholder, you will loose this if there is any value] I even managed to get Lloyds to accept me as a signatory on the company business account [no mean feat] they were reluctant to due to my bankruptcy even though the company has never had an o/draft facility or loans.

    I was a partner in a property business whereby when I was declared bankrupt I was [under the partnership agreement] out, I had to retire & the Trustee has taken over any interests that I previously held, in other words I have lost everything in that business. You may want to re-consider even paying the mortgage in respect of the rental property, maybe you should take some legal advice on this point, doesn't look good for you in my opinion.

    Good luck

    Nigel
     
    Posted: Aug 31, 2016 By: Nigel823 Member since: May 7, 2014
    #35
  16. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    1. You wouldn't be able to afford to pay the second mortgage. The Bank will likely appoint a Receiver to either collect the rent direct (and stop the O.R collecting it) and offset it against the mortgage payments, or look to repossess and sell the property.

    2. Yes the HMRC liabilities will be included in the BKY.
     
    Posted: Aug 31, 2016 By: Lisa Thomas Member since: Apr 20, 2015
    #36
  17. Woodstain Wally

    Woodstain Wally UKBF Newcomer Free Member

    15 0
    Hi all.

    Sincere thanks for all the advice so far. Approaching hearing in three weeks, so trying to get all my ducks lined up. So I have a couple of questions for our online experts -

    (Worth remembering here that I am a father of five, I drive a rubbish car, we have an interest only mortgage and haven't had a foreign holiday together as a family, ever. I am not trying to be smart here, to protect a motorbike, jet-ski, Rolex and ski chalet - I don't have or want such things - I'm just trying to provide for my family, day to day.)

    1. I will be disqualified from being a director, after the bankruptcy order is granted. I am currently a director and shareholder in our current (solvent) company, along with my wife - 100 shares, 60 me and 40 her. She is the company secretary and earns every penny of her income from it, doing the payroll, realtime PAYE, pensions, annual return etc. My shares have a value (assuming I keep working for my current company) and I assume any transfer now of my shares to my wife would fall foul of insolvency rules (I haven't checked). So what are the options, in preparation for post-bankruptcy? Will the TIB go after my share in the company and expect a dividend if and when one is declared? Can I actually sell my shares back to my wife, so that all future company profit post-tax goes to her (and I stay simply as a low paid employee until discharged)? If they do go after my shares because I can't rid myself of them pre-hearing, perhaps I should stop trading under the current LTD company and either go PAYE, or set up a new company, with my wife as sole director? Maybe we should not declare a dividend and 'invest' the profit back into the business?

    2. I intend to get independent advice on the second property, but would still welcome views. My grandfather was in a nursing home when he, my father (co-executor of the will) and I, decided to put some of the money from the sale of his home into another property (the distribution of any property was clearly stated in his will). I did that and purchased the flat using cash from his proceeds of sale (with his permission), with a mortgage in my own sole name. Some time after the purchase had been completed, it was pointed out that if I died, the beneficiaries under the will may not see the money to which they were entitled, so I had declarations of trust drafted to protect the investment made by my grandfather's estate, covering the beneficial interest. These were not registered at the time, because a sale was thought to be imminent. However, this did not proceed. The title to the property is still in my sole name and nothing has been registered regarding the trust. At the time of writing, grandfather has died, a grant of probate has still not been issued, because my grandfather's funds are tied up in this rental property. Given that I can show from correspondence in the conveyancing file that the deposit all came from my grandfather's estate, and the will shows how this is to be split, my beneficial interest will be evidently less than 100% (in fact the will shows I get one third of 50% and the dec of trust shows I get nothing. Current equity could be around £10k, so my share is either £1,666, or nothing at all).

    So, my marital home is not a reasonable prospect (albeit they may wait 3 years to see if it increases in equity). My income as a director and shareholder is about to go south as all company profit goes to my wife and I fall back to a low wage or shut the company down and start again. The second property does not look to be much of a go-er on the beneficial interest either. However, might they just go for it and try to collect the rent and offset the mortgage, service charge and ground rent (and possible repairs)?

    Looking to our IP friends out there, if it were you vs me, what would be your game plan?

    3. Further to a previous point about personal effects. I don't own anything of value, but the 5 kids have Xboxes etc. I don't need a TV to live, but I own one. How are these items treated, particularly if it transpires that I actually have f**k all in terms of property or shares...?

    Good one, isn't it? Thanks in advance...

    WW
     
    Posted: Sep 5, 2016 By: Woodstain Wally Member since: Apr 27, 2016
    #37
  18. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    1,909 241
    1. The O.R will take a view as to whether there is a value in the shares and will either collect the dividends due or sell them. The best scenario would be for your wife to buy them back off the O.R/Trustee. I wouldn't recommend you do anything at all prior to the Bankruptcy Order. The petition has been issued and it would be an offence to do anything to your assets without a Court Order.

    2. I wouldn't have a 'game plan'. The matter is out of your hands now. I would wait to see what the O.R/Trustee decides to do with the property. Given the trust wasn't registered you will need to get specialist advice form an insolvency solicitor to help argue the validity of the Trust. I can recommend one if necessary.

    3. You will only need to declare assets of material value - i.e expensive paintings or jewellery/antiques etc. If the X-boxes belong to the children they will not form part of your Bankruptcy estate in any event. No-one is going to come round to your house and inspect everything.

    You will be sent a questionnaire to complete about your assets - just answer the questions honestly and as best you can.

    Best of luck.
     
    Posted: Sep 6, 2016 By: Lisa Thomas Member since: Apr 20, 2015
    #38
  19. Nigel823

    Nigel823 UKBF Contributor Free Member

    84 9
    Woodsman Wally

    Great advice from Lisa which I would agree with in part.

    1. In respect of the shareholding you own, these in my opinion are pretty much worthless, yes the IP may take possession of them but in reality unless you post a dividend they have no monetary value & of course you could start another business as your wife as the sole director. I would sit on my hands in respect of offering anything for them personally.

    2. As for the fact 'best laid plans' are one thing & whilst I don't for a moment dispute what you are saying I think you will have a battle on your hands with this issue, ultimately the IP is looking for hard cash to settle their invoice.

    3. As Lisa states, they don't enter your house & complete an inventory, it is based upon your honesty, don't worry about this at all.

    Keep positive, they can't take what you haven't got.

    Good luck

    Nigel
     
    Posted: Sep 6, 2016 By: Nigel823 Member since: May 7, 2014
    #39
  20. Woodstain Wally

    Woodstain Wally UKBF Newcomer Free Member

    15 0
    Thanks all. Situation report - Bankruptcy hearing was this morning. I attended just to show that I'm cooperative and the order was granted. I guess now it's a case of waiting for the OR to make contact.

    An interesting development is that the tenants of the second (rental) property just gave notice so there will be nothing with which to pay the mortgage. I can't 'deal' with the property after today's order, so I just have to sit back and wait to be contacted by the mortgage co.

    Will update as things progress, just in case it's helpful to others reading the thread.

    WW
     
    Posted: Sep 26, 2016 By: Woodstain Wally Member since: Apr 27, 2016
    #40