Questions you have before making a decision to go Bankrupt and the Bankruptcy process

Moderators: TalbotWoods, JaneClack

By perrymsb
#471873 Hi,

I closed my 6 year old business down last winter. I had not declared any earnings to the Inland Revenue but had some money saved to pay an accountant once I sorted the paperwork out. Within this time my life had some issues that has stopped me from going back to work and my son has come to live with me full time. I have spent all of my savings and cant keep up with my CC bills and have literally gone under, every penny of my benefits goes to paying my bills and there still is not enough. The only way I can see a way out of this is to file for bankruptcy. If I was to file for bankruptcy, what would happen to the tax that I owe, do I still need to file my tax returns with an accountant? I cant afford this.

Any advice would be much appreciated.

User avatar
By JaneClack
#471874 Hello

If you were a sole trader as it sounds then your personal liability for income tax will go into the bankruptcy pot. If your total debt including this comes to more than £15,000 including the tax debt then bankruptcy would seem the most appropriate solution and as you are on benefits only - and I assume you do not own a property or a large car - then there would be nothing more to pay than the £525 bankruptcy deposit as you would fill in a form EX160 so you were exempted from the court fee of £180.

Look upon it as a fresh start unless you really think you will be returning to work in the near future as it lasts a year and as you are on benefits there will be no income payments arrangements.

Lots of people on this forum have a experience of bankruptcy and will be able to give you their slant on this. You should also contact your local CAB or one of the free advice services mentioned in the red sentences below. This is because you will often be asked if you have taken advice on this and these organisations will certainly be able to advise on putting a budget together.

Oh yes, they all have freephone numbers so cost nothing from a landline and they all have web presences!