Bankruptcy and insolvency Help

[GhostofTarbera]

It depends on Personal vs PSC.

PSC - Typical contractor's company, probably irrelevant as its a £100 ltd.

Personal - He may think he has £30K of personal debt (credit cards, tax whatever), he can go bankrupt and his unsecured debt is tied off. He may hear figures of £20K in fees etc. He may think: "Ah, I've got £100K in equity, they will sell my house, but I'll still have 50K left over...

The IP will look at it and think "how do I get all of that £100K?". The answer is £5K+VAT a month in management fees, plus some legal costs (lawyers are *always* well priced aren't they!?), insurances etc etc etc pretty soon the "min £20K + "up to" 30% of assets recovered" is 100% of the equity from his £500K home.

Sure, you can challenge their fees (remember how lawyers a good value?) in court... but its rarely successful.


So, how does it impact the decision? He may decide to take a hit on the house and sell quickly... it will probably work out cheaper in the long run.


M

You have almost nailed this, they will get the 100% equity in the house then sell his car for a mini bonus

Top post sir


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[RasputinDude]

It depends on Personal vs PSC.

PSC - Typical contractor's company, probably irrelevant as its a £100 ltd.

Personal - He may think he has £30K of personal debt (credit cards, tax whatever), he can go bankrupt and his unsecured debt is tied off. He may hear figures of £20K in fees etc. He may think: "Ah, I've got £100K in equity, they will sell my house, but I'll still have 50K left over...

The IP will look at it and think "how do I get all of that £100K?". The answer is £5K+VAT a month in management fees, plus some legal costs (lawyers are *always* well priced aren't they!?), insurances etc etc etc pretty soon the "min £20K + "up to" 30% of assets recovered" is 100% of the equity from his £500K home.

Sure, you can challenge their fees (remember how lawyers a good value?) in court... but its rarely successful.


So, how does it impact the decision? He may decide to take a hit on the house and sell quickly... it will probably work out cheaper in the long run.


M

OK, clearly you do know what you are talking about. I read your (somewhat scant) post as being a flippant reply rather than anything else. Having been in a position where I had to get the courage to ask for recommendations for a similar (but not quite the same) situation, I was flooded with idiots saying "it's simple, it's this" when the situation was very different indeed.


I mis-read you and I apologise wholeheartedly.

[mjcp]

Exhibit a, from el Reg today:

"... A progress report filed with Companies House in May this year revealed accounting firm Mazars LLP had run up costs of £40,050.50 while Chiron Recovery Ltd ran up "time costs" of £45,742.75.

The total cost of the liquidation between FY2018/19 and FY2019/20 was given as £137,980.95. Ltd Co's] £40,000 fine has therefore cost more than three times its value to enforce – and so far not a penny has been recovered towards the fine."

M

[alexandl2020]

My apologies for the late reply

My sincere apologies for the lack of/late reply. Thanks so much for all your effort trying to answer my question! I never ceased to be amazed by the amount of kind hearted people out there who are always on hand to help to others!

Any day now I will receive the dreaded brown envelop from the tax man demanding a life changing sum of money from me due to Loan Charge...Trying to stay ahead of the game and find out what my options are...the only way I can stay positive in light of all the darkness.

The way I see it, my options are:

a) Pay the bill - I do not have the money and even if I offer to sell my house, the amount owed will still be too large for them to accept a payment plan
b) declare personal bankruptcy - Which mean they will take my house and I will not be able to carry on at my job or get a new job. Life fo my kids will be hell
c) ask for an IVA and pay what I can over 5-6 years....but I can stay working/earning to feed my family
d) something else I cannot mention here but at times it seems the right/only thing to do.

Until now my preference is IVA as I can continue working and pay for my kids education (private unfortunately) and the house they live in. My wife has petitioned for divorce as I haven't been myself due to all the stress (I honestly do not blame her as I have been a total XXXX!). But reading all your experience on IVA IPs I am now not sure that is the best option anymore. Also I read somewhere hmrc has a track record of rejecting IVA proposals and in this case they would be the largest creditor by far (~95%or more) so they will get their way.

[eek]

As it is loan charge related see section 2.36 in https://assets.publishing.service.go...t_response.pdf and go and find a debt charity to create the information you need.

Also go and find your MP and write to him / her explain the situation so that when HMRC get nasty (as they might) you can reference your previous conversation when you need to actually speak to him to get HMRC off your back

What I will say is that given what the cause of your issue is it isn't as bleak as you think it is.

Oh and option D won't solve anything here - it just leaves your children without a dad

[alexandl2020]

As it is loan charge related see section 2.36 in https://assets.publishing.service.go...t_response.pdf and go and find a debt charity to create the information you need.

Also go and find your MP and write to him / her explain the situation so that when HMRC get nasty (as they might) you can reference your previous conversation when you need to actually speak to him to get HMRC off your back

What I will say is that given what the cause of your issue is it isn't as bleak as you think it is.

Oh and option D won't solve anything here - it just leaves your children without a dad

Thanks mate! will definitely have a read...unfortunately my MP is Gavin Williamson who from past experience just do not care!

and YES...thanks for the reminder about Option D!

[eek]

Thanks mate! will definitely have a read...unfortunately my MP is Gavin Williamson who from past experience just do not care!

and YES...thanks for the reminder about Option D!

Who your MP is really doesn't matter - the point is that if HMRC don't play ball and it all goes wrong It is him / his staff that will need to point out what HMRC have committed themselves to in Parliament - and that means once you show financial difficulties you need to be offered an IVA..