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

Moderators: TalbotWoods, JaneClack

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By TalbotWoods
#205296 Well think again ....... This is why we advise people that it is safer to use CAB, NDL, CCCS, PayPlan or better still do it yourself!!


Insolvency "specialist" wound up

A company offering advice and services to those in financial hardship has been wound-up by the High Court in Liverpool following an investigation by the Companies Investigation Branch (CIB) of the Insolvency Service. Abacrombie & Co Limited, based in Sheffield and operating throughout England & Wales commenced trading in 2003 purportedly carrying on business as "Insolvency Specialists" offering insolvency advice to individuals and directors of limited companies. During its trading it gave insolvency advice to around 530 clients.

In the case of individuals, for a minimum fee of £1,500 plus VAT, the company stated that it would deal with a debtor's creditors, complete the bankruptcy petition, attend at Court with the debtor and attend with the debtor at any subsequently arranged meeting with the Official Receiver. In practice, the company charged individuals up to £44,000 for these services and, in the period of its trading, took fees in excess of £2 million.

CIB's investigation found that there was a lack of commercial benefit to the company's clients, that the company charged excessive fees and lacked any clear charging structure. It was also found that the company operated an inappropriate banking structure and the business model operated by the company was unsustainable. In addition, the company operated with a lack of probity involving inappropriate transactions and advice and there was a lack of transparency as to who was controlling the company.

In making the Winding-up Order the Court found, amongst other things, that:-

* arrangements made by the company on behalf of debtors to dispose of the debtor's interest in property, subverted the proper functioning of the law and procedures of bankruptcy

* the overwhelming factor in determining the fees charged in each case was the amount of money available and held by the company

* the company's reliance on receipts from new clients to meet payments due in respect of existing clients was unacceptable

* documents were backdated to deceive the Official Receiver or trustee in bankruptcy

* advice given by the company to a debtor was wrong with the result that assets were dissipated to the detriment of his creditors generally and of the proper administration of the estate

* the company's stated aim to assist the debtor and their spouses or partners by minimising the debtor' interests in their jointly owned properties, combined with the lack of understanding of the applicable legal principles on the part of

Nicholas Buchanan, a director, and the other consultants, posed a serious risk to the proper administration of the debtors' bankruptcies

* Mr Buchanan improperly used the company's bank account as his own, posing a real risk to the solvency of the company and

* That there were serious issues including dishonesty in some instances such as back-dating off documents which fully justified the making of the Order Stephen Speed, Chief Executive of the Insolvency Service said, those running companies which exploit people in financial difficulty and abuse the insolvency regime should be aware that we can and will investigate them and, where necessary, ask the Court to close them down".


1. The registered office and trading address of Abacrombie & Co Limited was at 180 London Road, Sheffield, South Yorkshire, S2 4LT. The company was incorporated on 20 September 2002.

2. The petition to wind-up the company in the public interest was presented on 22 August 2008 under the provisions of s124A of the Insolvency Act 1986 following investigations carried out under section 447 of the Companies Act 1985 by the Companies Investigation Branch of the Insolvency Service. The Winding-up Order was made on 23 October 2008.

3. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent.

4. The Insolvency Service carries out confidential enquiries on behalf of the Secretary of State for Business Enterprise and Regulatory Reform through Companies Investigation Branch. The Service also authorizes and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice.

5. The Consumer Credit Act 1974 (the Act) requires debt management companies to be licensed by the Office of Fair Trading (OFT). Abacrombie & Co Ltd previously held a consumer credit licence (number 537807) which lapsed on 20 June 2008. The OFT has been reviewing its application for a new consumer credit licence which was made on 21 July 2008 As a result of the Insolvency Service's action to wind-up the company, the application will automatically be made of 'no effect'.

6. All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit, PO Box 326, 17 - 21 Chorlton Street, Manchester, M60 3ZZ. Tele: 0161 934 4182 Email:

7. Further information about the work of The Insolvency Service is available from Insolvency Service, 21 Bloomsbury Street, London, WC1B 3QW
By Rayvn
#220800 Hi,
I know this is an old post, but thought you would like to hear of the charges we were offered to go Bankrupt.
And they promised we would not loose our house!
But bless them they dropped them and said they could do it for a £1,200 but with that we could just ask for advice and no help when going to court.
So as you can imagine I phoned CCCS. Who are great and getting back to us soon. And even better free advice.
Thought you may be interested.
By johnny 73
#250113 i had a case just last week where a company had tried to charge my client £660 for assisting with completing the forms etc and a further £300 to attend court with my client, so almost a grand in total. fortunately they didnt sign up and called my company istead (a non fee charging company)

absolute robbery when its considered there are plenty of places that will do the same job for free

not bad for a few hours work eh?
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By JaneClack
#250163 and I have heard tell that some fee-charging companies are charging to submit DRO applications too - well so their clients said!
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By TalbotWoods
#250173 I am aware of three instances where a DMC has touted for trade on the basis that they can submit a DRO!!

In all three instances the customer has lost a LOT of money, and the company has folded very very fast.

So far the figure that have been passed to OFT and TS are £150, £275 and £330.

It is happening, all the debt forums and money forums have seen an increase in DMCs doing this as a con!

and folks please remember a DRO costs £90 if you are asked to pay more please RUN A MILE!