Bankruptcy

[Advocate]

CCCS might be able to offere advice...and for free!

[DaveB]

If you have the house or other assets to cover the debt, then you're not really bankrupt are you? Better to sell yourself and manage the situation than have it forced upon you.

Absolutely, the best course is always to pay the debts you have yourself however you mangage to do it. That way you avaiod all the negative effects of either bankruptcy or to a lesser extent an IVA. But, if your assets don't cover that debt, or you are not in a position to sell those assets for whatever reason, then you are in trouble and going bankrupt in that situation means you will lose any choice you had in how your assets are valued and disposed of to repay those debts.

Bankruptcy occours when your assets cannot cover your debts and you are unable to service those debts based on your income. An IVA means you get to agree the payments you make so that you *can* service the debt with your available income and your creditors cannot then make demands on you to force the sale of your assets etc.

An IVA will still affect you credit history *but* lender do not normally ask about IVA's when applying for a mortgage etc, they do ask about Bankruptcy.

Even if you declare bankruptcy and all your assets are sold, you can still end up paying your creditors every month if the sale of the assets did not repay the debt completely.

IVA's are not a get out of jail free card. They are a lot better than Bankruptcy.

[VectraMan]

Even if you declare bankruptcy and all your assets are sold, you can still end up paying your creditors every month if the sale of the assets did not repay the debt completely.

Is that true? I thought the whole point was that the debts are written off.

Quick google:

http://www.cv-service.org/Insolvant.htm

Debtors are allowed to discharge all their debts after one year and it typically takes six months

If the insolvency is a result of circumstances beyond the debtor’s control, such as disability preventing him or her from working, debts can be discharged in as little as three months, provided that the person has co-operated fully with the insolvency service, creditors have not called for further investigations and a bankruptcy notice has been filed

Debtors guilty of reckless behavior, such as racking up credit card debts on a holiday before declaring personal insolvency, can be hit with bankruptcy restriction orders which last between two and fifteen years and severely restrict a person’s ability to get loans and credit cards.

So it seems it very much depends on the circumstances as to how badly you're hit.

[Platypus]

If you have the house or other assets to cover the debt, then you're not really bankrupt are you? Better to sell yourself and manage the situation than have it forced upon you.

I don't have any assets, therefore considering going voluntarily.

I've just been advised that if I can get someone else to be the director of the Ltd then it can continue trading. Profits will go to the receiver for 3 years (fair enough). Then that's it.

[DS23]

yikes. how did it get like this?

[Platypus]

yikes. how did it get like this?

Divorce, school fees, a period when I didn't work for 12 months due to feeling like a loser. Credit funded the lot. Now I've spent my tax money and Hector is cross.

[EternalOptimist]

Divorce, school fees, a period when I didn't work for 12 months due to feeling like a loser. Credit funded the lot. Now I've spent my tax money and Hector is cross.

good luck mate

[skelm]

Hope everything works out!

[DodgyAccountant]

Hi Platypus

How upset is Hector?

He may put your company into compulsory liquidation and then appoint an Insolvency Practitioner to liquidate any assets - probably big fat zero. If you have acted 'wrongly or fraudulently' as a director, you will be personally responsible for the tax. Not keeping Hectors cut does not go down well. You may get banned as a director - minimum 2 years.

If you have no assets, the IP will probably take an offer on the tax bill - maybe 50-70% or so. All this can take a some time.

Depending on other debts, if you can get a well paying contract, you could survive without going bankrupt. If you get banned as a director, just work through an umbrella company.

PM me if you want

Best regards

DA

[scooby]

Bankruptcy means you will not get Security Clearance so future gigs at many HMG departments will be impossible. Financial institutions also won't touch you with a barge pole for work either, it's a very serious step.

sorry, this is wrong. It depends on your background and dept you're asking clearance from.