Author Topic: My Bankcruptcy & Hi  (Read 22666 times)


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My Bankcruptcy & Hi
« on: Nov 16, 2014, 08:56:26 PM »
Hello Chaps,

I thought that I would share my experiences with you; for those who are contemplating/facing this last resort.

I have been running a fairly successful window cleaning business for the last 11 years, my troubles started as I did not use an accountant therefore lacking knowledge; and I became an easy target for HMRC.

About 2006 I completed a tax return, my figures were quite different from the proceeding years as I had accumulated some business expenses that was more than normal due to some equipment upgrades and business acquisitions. This raised a flag with HMRC and in 2007 I got asked to submit my books to them so they could check and make sure I was doing everything correctly.

I submitted them, and after a few weeks they highlighted a few errors in my bookkeeping, a couple of things I claimed for in full which they said I could not claim for. In total these mistakes added about £700 to my tax bill which wasn't too bad.

I paid the extra fee's and I thought that was the end of the matter. Little did I know that my whole life was about to unravel in every way possible. Shortly after that, my wife decided to leave me, this was a very traumatic time as I had not seen this coming at all; focused on trying to establish how to sort out the issue, my time and energy was very much tied up in trying to get her back or at least establish what I had done for her to leave.

At this point in time HMRC decided to do a full investigation into my affairs, so not only am I trying to deal with the trauma of my wife leaving, I am having to give all my records for the last 6 years to HMRC also. Whilst this is happening, I think I am getting back on track with my wife, and we seem to be establishing some form of communication. She said that she needed to talk with me one day to sort out this situation. Its then I find out she has been having a sexual relationship with a mate of mine.

I went into a deep depression weeks following, I had no desire to do anything or talk to anybody. I moved house and as time went on I started to try and accept what was happening to me. After about 6 months, I was involved in a car accident which I broke my wrist and damaged my chest, as I was living on my own, and was self employed, I had rent to pay and bills to meet I had to sell off my work in order to survive as I had no accident insurance for self employed people this money would last approx. 5 month max.

Whilst recovering at home I had a look in more detail at the escalating HMRC problem that I had not been able to give my full attention, they calculated that I owed about £8,000 in back taxes, plus interest accruing and late payment fees this brought the total just shy of £11,000. I called them up and explained what happened, and they at first were very helpful and gave me a 6 month breather so I could get myself back on my feet.

Having recovered from my injuries, I had to rebuild the business back up again as the money had run out, I had to start selling possessions to pay bills and rent, and not pay non essential bills like phone and credit cards in fact I aslo started falling behind with council tax. My divorce was going through also which was eating my money in fees.

I managed to get the business making enough money to be able to pay my rent and food within 2 months, and was making some headway. I thought to myself if I keep going like this I should be able to get the business up and running as it was before within the year and can start chipping away at the HMRC debt which at this stage was approaching £13000.

HMRC agreed to take token payments, so I started doing this and kept focusing on gaining more customers. The business started gathering momentum and I started to bring in more money, I had arrears in council tax and credit cards to clear too and was making good headway on those too.

This is when HMRC started to become a real problem. As I started to increase my earnings, my current tax liabilities were also going up and they kept increasing my payments. This was an on-going problem for 3 years; also the fees and interest in itself was really starting to balloon the balance and even paying £800 a month in real terms it was barley covering the debt with the fees and interest.

It got to a point where I was working so hard, I was earning more money than I ever earned before and all I was doing was giving it all to HMRC, I still had council tax to clear and it all came to a head when my balance tipped £30,000 with HMRC and I had a few thousand on council tax and credit cards, it just quickly became this huge financial mess that was getting out of control by the hour.

I had already been dealing with debt collectors on several occasions, but it came to a point where there was nothing I could do.

Stuck, I decided to get help. I contacted Clear Debt and they suggested I go for an IVA, stick everything in and I can pay the £800 a month into it with the knowledge that the balance isn't ballooning in interest and fees. I jumped at this as by the next year my HMRC debt was going to start approaching £40,000 thanks to the interest and fees.

So I went for it, everyone accepted but HMRC. This failed the IVA as they were the main creditor, it was then I realised that Bankruptcy was a real possibility. I called HMRC and spoke to the man who refused the IVA, he actually laughed at me on the phone (I lodged a complaint against him for this) and said that they probably be making me bankrupt anyway. I pleaded with him, but it made no difference.

So I took it out of their hands, I opened a basic bank account with Barclays, explained the reason for opening the account is because I am making myself bankrupt. They were, to my surprise very helpful. I stopped paying everyone immediately, informed my customers of the new bank details and filed for bankruptcy myself.

I stated on my paperwork that the only reason I am filing for bankruptcy is because HMRC wont accept my offer of an IVA. I didn't go into loads of detail, I kept it simple.

The meeting with the OR was very relaxed, and easy. And I am now a lot happier, I still have my business, I still have a roof over my head and i'm 3 months into my bankruptcy already and I have found it the best thing I ever did.

Thanks for reading and find hope that all clouds have a silver lining.