Can I be forced bankrupt? (disabled child, no assets)

[rathersad]

Hi there,

 

My situation is that I currently pay all my disposable income (as calculated by Stepchange, thousands a month) to HMRC for late self-employed tax (lost contract, needed to spend tax money to provide for family, now full-time employed).

 

This arrangement continues until the start of 2015, then I have told my creditors (who I am mostly paying £1 a month to) that I will pay them that amount pro-rata, which will take ~4 more years to pay off all of my debt in full (all accounts defaulted, need to contest them).

 

In the meantime I am looking for a better paid job as my company restructured and cut my salary by a third.

 

Unfortunately one creditor (experto varde/MBNA) took a CCJ out against me at an old address despite knowing my new one that I will apply to get set aside once I have £70 spare (v difficult when all your disposable income is 0 ). This stops me from moving jobs to one at my market rate.

 

Due to my drop in income I could not pay my Amex corporate card bill (personal liability) of £5k (old company) or so and Brachkers are now threatening bankruptcy and sent a statutory demand that expired as I could not contest and did owe money.

 

I explained my situation and said I would send over the documents ~a month ago, with the only disposable income I have being an increase in the disability living allowance I receive for my son (higher rate care, severe) as he turns five increasing as he becomes eligible for mobility allowance, they said that they would consider taking (£21.60/week) that as a corporate charge card was above other creditors and this was a serious matter and they would force me bankrupt otherwise.

 

I have no assets (£1.24 in bank account), rent an apartment LT that has been adapted to my son's needs, had to sell the car (which he needs as he can't travel public transport), only shares I have are in my company and vest in two years (maybe worth a lot at that point ie six figures, but if made bankrupt I lose them)

 

I haven't sent them documents yet as I've been trying to arrange my affairs again with a higher than expected gas/electricity bill that may need me to adjust my tax payments down so I don't get disconnected and I have been being treated for extreme depression/anxiety attacks (on medication now). As such they have now sent a letter saying they are proceeding with the bankruptcy petition.

 

I want to pay back all the money I owe to everyone and can do so in ~6 years, faster if I can move to get back up to my market value (potentially within a year, I am very, very good at my job and have been hampered by depression)

 

What should I do now? I have all the documents ready to send, but I'm feeling very vulnerable and it seems they want to make me bankrupt no matter my situation, even though they won't recover anything. I have another child on the way in a few months (in laws are paying for everything) and a wife with a chronic illness and I am terrified of not being able to care for them/losing my place adapted for my son. I can move country and earn higher, but my son's specific condition will not be treated as well as here.

 

Is paying my disposable income to HMRC a defense against being forced bankrupt? Do I need to pay these guys more than other creditors?

 

What should I say now?

 

Help appreciated, very distressed and feel like I'm falling into a pit of despair

[rathersad]

I should clarify my wife works part time in her own company, which just about covers specialist care for my son, but cannot work full-time due to her illness

[dx100uk]

so your main issue is:

 

 

Due to my drop in income I could not pay my Amex corporate card bill (personal liability) of £5k (old company) or so and

Brachkers are now threatening bankruptcy and sent a statutory demand that expired as I could not contest and did owe money.

 

dx

[rathersad]

That's the central issue, but I want to know if they can force bankruptcy if I don't hand over my son's disability living allowance/more than other creditors are receiving given I can pay everyone off over next 6 years in full (token for everyone but HMRC in that period).

 

Fear of bankruptcy making me have anxiety attacks, but I need to provide for my family.

[FitForPurpose]

Hello,

 

I am very sorry to hear of the situation you find yourself in. The first priority is to look after your mental health. That is priceless. Money is only money - it comes and goes. I realise this might sound impossible, but try to downrate the threats that you perceive to "annoying" rather than "threatening". It is the best way to ensure that demands for money don't send you over the edge.

 

I can see that it is your wish to repay everyone. That is admirable, but you should also seriously consider whether that is viable both in terms of financially viable or whether it is viable for you to suffer the stress of it for years to come. Have you properly considered bankruptcy or did you get as far as thinking bankruptcy would be the end of the world? It is not and for many it is the right thing to do. It exists in law for a reason. You don't own a house or any significant assets that you have mentioned, other than those shares. What is the deal there - why do you think you would loose them if you are made bankrupt and are they really going to be worth anything?

 

FFP

[rathersad]

Thank you FitForPurpose,

 

As an FSA approved person, I will be unable to work if I am made bankrupt, which means I lose my rented flat which is specially adapted for my disabled son. I will also likely have to move areas given rents here and he will be uprooted in terms of his council and LEA provided care.

 

As a part of the restructuring agreement I received an option on the shares, should I lose my registered status or voluntarily leave the company I will lose them.

The value if the company does ok is much more than my total debt. If the company does well I am also likely to receive bonuses in the next few years

that should allow me to settle my debt to everyone in full (some have already offered 50% full and final settlement offers).

 

Under the terms of the option I cannot offer a lien on these shares.

 

The 6 year term assumes I only earn my salary and while the budget is tight, it is just about manageable.

 

I suppose what I'm trying to understand is if this is like a CCJ, wherein if you owe the debt and the debtor doesn't agree to a payment plan, he can get the CCJ without contest, or whether you can stop a bankruptcy by having a fair offer on the table, paying priority debts first and then the rest over a reasonable timescale, given that a bankruptcy in this case would disadvantage everyone.

[dx100uk]

dla is for living on and should not be included as income.

 

would it be possible for you to list your debts

and whom you pay.

 

this sounds like hot air threat to me.

 

and something they cant really do.

 

dx

[dx100uk]

yo have cfreditors offering discounts?

 

that means there is something WRONG with the debt

 

indicate those too in your list please

 

dx

[FitForPurpose]

Ok - thanks for the info. I thought there might be another reason why bankruptcy isn't a good idea

 

So the problem right now is "just" your Amex card right? If so, let's look at that. You said it was a corporate card from an old company under which you had a personal liability. Can you explain that a little more? Just wondering if there are any flaws in their claim?

 

Regarding your son's allowances - I would have thought they are just that - your Son's. So I agree they should not be considered part of your income.

 

FFP

[rathersad]

HMRC - payment plan ending Jan 2015

 

Rest by order of size (feel a bit ashamed at total size, most taken out to pay for private medical treatment for my son, then had pay hit)

 

MBNA CC - CCJ by experto knowingly sent to old address, refused to set aside, saving up for £70 fee to do so myself, they did ask if I could offer a settlement amount at discount, not paid anything

Natwest loan - never got a reply on £1 directly, but they've offered offered payment plan over 160 months (!?), will offer £1 again

Barclays OD - about to go default, offering them £1

Barclays loan - £1

Amex charge card - problems

Halifax CC - given to Cabot, asked to call for discount, ignored

Amex CC - £1

Natwest CC - haven't heard for ages..

Santander OD - £1

Santander CC - received offer to call for settlement, no amount specified

M&S CC - Received offer of 75% F&F

Zopa loan - £1

Capital One CC - Offered 50% discount F&F, 75% if paid over 12 months, ignored so far (via Lowell)

 

MBNA CC, Natwest loan and Barclays OD are two thirds of my total non-HRMC debt. (25%, 20%, 18%)

 

All accounts defaulted, no interest being added to any of them that I can see. Currently bank through Metro Bank, no more debt for me.

[rathersad]

@FitForPurpose Amex are the only ones taking legal action that could jeapordise my family. The card was a corporate charge card that I was liable for clearing through expenses as I do a significant amount of travel for work (no longer as I can't afford late expenses). From what I've read charge cards don't have normal CCAs and so are normally enforceable? I haven't CCA'd anyone else either, reading through this forum I should for credit cards, but it doesn't seem to apply to loans and overdrafts. Most creditors I've been in communication with have been very helpful indeed.

[rathersad]

I have just noticed the Amex charge card doesn't actually show up on my credit files (via checkmyfile.com). Odd

[dx100uk]

ok good as long as you are ignoring [as such] the discounted ones.

 

have you ever looked at PENALTY charges reclaiming and PPI?

strikes me a good few there that have discounts will have them+more back than the discount is offering?

[BRIGADIER2JCS]

Amex is not a credit card so is not reported.

[rathersad]

My personal amex charge card is reported though? (that's the Amex cc above, apologies)

 

The odd thing about the Capital One is that it was only taken out 2 years ago, no PPI, penalties maybe 10% of total? Idk why they're offering 50% F&F

[Surfer01]

Was the CC taken out in your name or the name of your company which hopefully was limited?