Hi i would like to ask a question on behalf of a friend.
A mate of mine is going to go bankrupt next month by his own choice mainly because of vat and personal tax (self employed) He hasnt paid any VAT or tax for over a year and is still trading. At the same time he will of course wipe out a few other debts aswell which would be a smart move. He currently has secured loans of £275 000 and his house is valued at about £255 000 or there abouts so in negative equity. His plan is to wipe out all unsecured debt including taxes etc but keep on paying his mortgage to his secured lenders so he doesnt lose his home. Is this possible? Secured lenders wont repo if they are still getting paid but will the VAT man have something to say about that and the official receiver?
Thanks for your time.
Your friend in deliberately not paying his VAT and other taxes could risk a criminal prosecution if it can be shown that he has deliberately done this.
The OR will investigate all of his business activities to see when did he make his last payment to the Crown and why has he not done so.
He may be able to continue his mortgage payments and buy back the house for a pound plus fees - but I think his Crown creditors and other creditors would want to know what he has done with the money he owed them?
Last edited by David Mond on Sun Apr 19, 2009 3:32 am, edited 1 time in total.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
Hi thanks for your reply. Thats what i thought. Does anyone else know of anyone who has done something similar and what was the outcome. We know the VAT man can be a sod Cheers
It will depend on how long the unpaid Crown monies have been unpaid for, and how your friend has been running his business in the meantime.
And if he intends to continue trading and is allowed to do this by the Trustee, HMRC will watch him like a hawk to ensure that he pays post-bankrutpcy liabilities on time.
