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I'm in the process of having a company wound up by a creditor.

Due in part to the incompetence of my accountants, it's likely that the liquidator will try to reclaim about 15K off me personally as a director.

I don't have this to give them (I just have a lot of other debts which I'm trying to sort out), so I'll have to pay it back as part of a DMP or IVA (or just go BR, which is starting to look appealing again after this week's shenanigans. 'being a company director' is pretty near 'having lots of credit cards' on my list of unfavourite things).

I'm assuming this means that the liquidator of my company (the OR) will become a creditor. Does anyone have experience of this, and what the OR's like to deal with in this capacity?

CM

Is it to be read that you have an overdrawn Director's Loan account to the tune of £15,000?

I'm rusty on liquidation and so hope someone will correct any mistakes in my posting as it will be back nearer the top of the page again.

I beleive that is the only reason a liquidator would actually demand monies from a director. If you've an overdrawn Loan Account, you may well have H M Revenue & Customs taking a close look at your Tax affairs too. If you have had £15,000 worth of benefit, either monetary or in another form, you probably would be expected to pay over the Tax and NIC that is due on some, if not all, of that amount too. They may choose to do this by adjusting your Tax Code if you are in PAYE employment or demand it outright as part of Self Assessment.

The OR will not become a creditor of the Company, you as the Director would however become a 'debtor' and the OR will at some point be asking you for recompense. The amounts have first to be properly identified.

Tell it like it is.

Cybus wrote:

Is it to be read that you have an overdrawn Director's Loan account to the tune of £15,000?

Yes - I'm trying to find ways to sort this out (legitimately, I hasten to add), but seeing as I only found out about it recently, I may be somewhat short of options.

Not overly worried about tax investigation - I'm insured against accounting costs (through FSB), and I don't have anything to hide.

Who is normally the liquidator in cases like this (no assets)? Surely it's the OR?

It is usually the Official Receiver in the case of a Compulsory Winding up, which I assume this is as you have not voluntarily wound the company up yourself.

However if there are clearly assets in the case, it is not unknown for The Insolvency Service to pass work on a rota basis to private IP firms for them to act as liquidator

Tell it like it is.

The Official Receiver will claim against you personally, if there is a debt due by you to the company. If valid, this debt would be provable in either an IVA or bankruptcy.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

Thanks for replies. After getting a final answer out of my accountants (which took threats of reporting them to the ICAEW before they finally stopped claiming the partner was "in a meeting" and got their act together), it has turned out that the loan liability is considerably less than I feared. More like sub 2K, which I can live with.

CM

Sounds familar to a client of mine and thanks Melanie for confirming the advice that I have been giving him.

Melanie, he wants to talk to a company insolvency specialist are you interested please?

Hi Ray

I would be delighted to try and help. I think I have an e-mail address for you, so will contact you via this means today.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

ray_a wrote:

Sounds familar to a client of mine and thanks Melanie for confirming the advice that I have been giving him.

Melanie, he wants to talk to a company insolvency specialist are you interested please?

The lesson I drew from this was "don't let your DL accounts become seriously overdrawn", regardless of what your accountant says. I found out that had I really been 15K in the red (and my partner was similar), it's quite likely the OR would have taken disqualification action against me, as it would have materially contributed to the insolvency.

Hi Melanie

Many thanks will look into all this later when I finished off sorting out some other things!

Ray