Inland Revenue pushing for Bankruptcy

[ms hopeful]

I have been a reader of this forum for the past few months and its been a great source of advice so I'm hoping you could help me with my first post

I have an IVA in place and have made 18 payments of £350 but have also missed a number of payments over the past 2 years when I was self-employed. I started a fulltime job in September with a great company and have just received a promotion. After 12 years of battling with self employment my career is back on firm ground.

However, back in October a meeting was held and creditors decide to petition for bankruptcy as I'd defaulted on the IVA payments. I wasn't told about this until January when my IP called to question why I was continuing with the Oct, Nov, Dec payments. The Inland Revenue are the main creditor in the IVA and my post IVA tax is due now £7,179 (£5679 + £1500 on account 07/08) they have said if its not paid in full they will continue petition for bankruptcy. I have £5,000 which I agreed to pay yesterday, they agreed the remainder of £2179 plus interest could be paid by the end of April but also said there was £5,020 VAT that must be paid then too or they would continue with the bankruptcy through my IP. I really don't think I can find another £7k in 8 weeks and keep up with my IVA payments.

I have not made any payments to the IVA since our phone call in January and have enquired about a figure for full settlement. I owe £14,700 including fees. They have promised to get back to me on Monday.

What would be an acceptable offer for F&F ?

a third party has offered to lend me some money, am I right in thinking I should put that towards the £5k and use this for F&F of my IVA and then deal with the post IVA tax/vat of £12,179 afterwards?

Would the Inland Revenue still have the right to file for bankruptcy if my IVA was complete and paid in full or could I insist that they accept a payment schedule?

I am totaly disheartened, my IP advised me when entering the IVA to stop charging VAT but I found out later this wasn't the case and that I was liable for the vat. My accountant has since de-registered me for VAT and filed the VAT returns but as I can't go back to suppliers and re-invoice I have to pay this myself.

I've made it this far, turned my life around and am desperate to make this last hurdle and avoid bankruptcy, any advice would be gratefully received

thx

[Adam Davies]

Hi
Are you a homeowner and is so how much equity do you have ?
Has your IVA actually failed ? If it hasn't then your IP could go back to your creditors with a full and final offer or you could start paying into the IVA again as you now have a secure and regular wage.
Your post IVA tax and vat debts will stand so you will need to come to an agreement for repayments direct with HMRC.
If you have no assets or little equity then it may be better for you to contemplae bankruptcy as it would give you a fresh start
Regards

[ms hopeful]

No I'm not a homeowner, I don't think my IVA has falied yet as my is looking into a F&F for me, any idea of a what would be an accepatble offer?

how long does it take for them to make a decision?

[MelanieGiles]

This sounds like a real hotch potch of issues, but dealing with them in turn.

One of the conditions of entering into an IVA when you are a sole trader is that you will ensure that your payments for taxes and VAT are made on time, so I can undertand the position that HMRC and your IP have taken - but it seems that you have not been kept fully informed.

You must prioritise the payment of post-IVA taxes as, regardless of what happens with the IVA HMRC can still petition for your bankruptcy. It might be sensible to then use the reaminder of the monies to bring your IVA up to date and thus avoid bankruptcy proceedings altogether.

You really need to liaise with your own IP directly regarding this issue.

[ms hopeful]

If my IVA was settled in full, how likely is a bankruptcy order to be accepted by the courts when I can offer a short payment schedule for the tax/vat owed & considering I am in f/time employemt now with a decent wage? or will this happen automatically?

if I opt for bankruptcy now would the period of my IVA be taken into account or would it run for the next 3 years?

[MelanieGiles]

You will have to discuss whether your offer to HMRC to pay by intalments will be sufficient to avoid therm pursuing you into bankruptcy. If you are made bankrupt now, the period until discharge is one year, but if you are required to make payments under an Income Payments Agreement or Order these will last for three years.

[Adam Davies]

Hi
Bankruptcy will run for a maximum of 12 months,unless you had a BRO or BRU,but any payment order would run for three years
Regards

[ms hopeful]

my original debt was 67,464
IVA = 60 payments £350
dividend 0.25p

£14,700 is left to pay
I may be wrong so please correct me, but with my sums that leaves £11,760 for creditors

I know ideally we should offer the full amount but with the alternative of bankruptcy what would be an appropriate figure?

[MelanieGiles]

You will need to look at making an offer which will enable the original dividend to be achieved. I would have thought that a sum in the region of £12,000 might be appropriate.

[ms hopeful]

Well things have progressed and thank you for all your advice. I've made full payment to Inland Revenue for the post IVA tax & vat (although they have still yet to cash the cheque!)I've spoken to them and they have definitely received the cheque its just taking a while to be processed in their system. I've also let them know I wish to make a F&F offer for the IVA (Inland Revenue are 75%) but of course this needs to be arranged via my IP.

I've repeatedly called my IP (Debtmatters)but it is proving to be very frustrating, it has taken days for them to return a call and its been weeks since I made the offer of £12k. They are looking into the file as one of the amounts has increased and they think the credit card debt may have been sold but they weren't really sure?! I didn't think it was possible for an IVA debt to increase? Either way as Inland Revenue hold more than 75% of the original debt I was hoping this offer of F&F could be easily resolved. Should I be worried with Debtmatters selling their IVAs onto to Grant Thornton & Payplan?

thx

[MelanieGiles]

I think that you need to find out exactly who is dealing with your case now in either firm.