Thinking about a second Bankruptcy... :-(

[tiredandweary]

Hi All,
I have also posted this in Business debt and hope it is ok to post it here too. Sorry if this is the wrong thing to do. :-)

Hi All,
I am posting on behalf of a friend. I have received excellent advice for my own debts from you all and hope someone can give me some advice on this issue. I am sorry for the long post.
Basically,they had a business with a business partner. The business ceased trading sometime last year and has debts of between £16-£20,000. This includes supplies, PAYE for some employees, (Only informed of by the accountant AFTER the business closed), vat, accountant fees (company and personal I think) and their own personal self assessment tax. Their SE was around £9000 on account but have managed to pay off about £5000. They sold the company vehicle to pay off the company bank account. The partnership did not end amicably and the other partner has done a midnight flit...
They came to me to see if I could help sort out the mess they have got into. I contacted a Debt Management Company, (Debt Solutions Company,don't know if they are the same thing), and we had a meeting with the man. He said that Bankruptcy was the best option as both partners were equally liable for the company debts. If one didn't pay the other would have to. Then he said, 'to act on their behalf, fill in the forms, attend court etc it would cost £750'. This seems an excessive cost to me, especially as they already have a huge amount of debt and it seems that it costs £750 to go bankrupt in the first place?
I have searched the net for information on business debt and bankruptcy but it seems too complicated to me, which is why I have asked you for advice.
Now, the worst part of this is, they had to declare themselves bankrupt almost 5 years ago, (completely different circumstances). I have a feeling that this will be frowned upon by the courts and the official receiver and I do feel that some sound advice is very much needed in this case, but without any unnecessary cost.
Here is a bit of information on their present circumstances in case you need it.
They are married, have a family of 5 to support, live in a privately rented home and have a full time job.
Many thanks for reading this post and I look forward to your replies.
Tiredandweary :-)

[Nibbler]

Re: Thinking about a second Bankruptcy... :-(

First thing, get him to get advice as to whether bankruptcy is the best option from somewhere impartial who aren't fishing after fees. National/Business Debtline etc.

A previous bankruptcy has very little effect on a second or subsequent one.

The courts will not frown on it. All they care is whether the person is technically insolvent.

The OR may take the previous bankruptcy into account when considering a Bankruptcy Restriction Order/Undertaking (BRO/U), but ONLY if there has been sufficient misconduct leading to the current bankruptcy to justify one. i.e. a previous bankruptcy would not be grounds for one on it's own.

Paying a company £750 to fill in a few forms and attend court is absurd and a complete waste of money. The forms are a tad confusing at first, but easy enough after a bit of study and FREE help. Court is likewise a non issue. It sounds scary, but really is not.

[FlamingParrot]

Re: Thinking about a second Bankruptcy... :-(

Paying a company £750 to fill in a few forms and attend court is absurd and a complete waste of money. The forms are a tad confusing at first, but easy enough after a bit of study and FREE help. Court is likewise a non issue. It sounds scary, but really is not.

Unless I didn't read the first post correctly, the £750 referred to was the actual cost of going bankrupt: £525 is the OR fee and £175 is the court fee, which can be waved in certain circumstances. See this for reference ---> https://www.gov.uk/bankruptcy/applying-for-bankruptcy

[Nibbler]

Re: Thinking about a second Bankruptcy... :-(

Unless I didn't read the first post correctly, the £750 referred to was the actual cost of going bankrupt: £525 is the OR fee and £175 is the court fee, which can be waved in certain circumstances. See this for reference ---> https://www.gov.uk/bankruptcy/applying-for-bankruptcy

That adds up to £700. Not £750.

I read it as they would charge an additional £750 on top of the court and OR's deposit.

Then he said, 'to act on their behalf, fill in the forms, attend court etc it would cost £750'. This seems an excessive cost to me, especially as they already have a huge amount of debt and it seems that it costs £750 to go bankrupt in the first place?

Otherwise, the company would be helping with the forms and attending court for nothing. Can't imagine that would be the case assuming a commercial firm. And refernece to "in the first place" suggests this is on top.

Only the OP can clarify though.

[tiredandweary]

Re: Thinking about a second Bankruptcy... :-(

Hi Nibbler and Flaming Parrot,
Thank you both for your swift response :-)

Nibbler, I shall try the companies you have suggested, thank you. I also think that these 'fees' are absurd which is why I have turned to you all on here for the advice. :-)

Flaming Parrot, First of all, I am sorry for the confusion I have caused. I should have made this clear in my original post, sorry :-) The DMC said, 'the fee for filling in the forms etc is £750. There is then another £750 to pay the courts for the bankruptcy'. The total cost would be £1500.

To find the bankruptcy cost alone will be difficult enough for them and I still don't think it is 'fair' that the other partner is able to just forget about the debts, but, I suppose, that 'that is life'... :-(

Many thanks,

tiredandweary :-)

[Nibbler]

Re: Thinking about a second Bankruptcy... :-(

http://www.bdl.org.uk/ and http://www.nationaldebtline.co.uk/

(Both actually the same people, but one deals mostly with business debt problems and the other personal)

If filing for BR should be the right option, then as said it is ridiculous to pay for help filling in some forms. They are not really difficult.

[FlamingParrot]

Re: Thinking about a second Bankruptcy... :-(

That adds up to £700. Not £750.

Sorry, my mistake!

I read it as they would charge an additional £750 on top of the court and OR's deposit.

Otherwise, the company would be helping with the forms and attending court for nothing. Can't imagine that would be the case assuming a commercial firm. And refernece to "in the first place" suggests this is on top.

Only the OP can clarify though.

Thanks for clarifying. There is absolutely no need to pay a commercial firm to sort out your bankruptcy! The CAB can help ---> http://www.adviceguide.org.uk/englan...bankruptcy.htm

As noted on the link supplied, the court fee could be waived in certain circumstances. There are also charities who may help with BR fees:

http://www.turn2us.org.uk

http://www.charisgrants.com/clients.html

http://www.uutf.org.uk/files/UUTF%20...2007%20(3).pdf

British Gas will provide grants to help people go BR too in some cases: http://www.britishgasenergytrust.org...o-applications

In fact most of the big energy companies have associated charities like EDF: http://www.edfenergytrust.org.uk/hel...o-applications
As an aside, the credit for the links above belongs to Plan B, who originally provided this info elsewhere. :yo: :thumb:

[FlamingParrot]

Re: Thinking about a second Bankruptcy... :-(

The Insolvency Service website has most of the information you need:

The Insolvency Service Enquiry Line - Tel: 0845 602 9848
Email: insolvency.enquiryline@insolvency.gsi.gov.uk

• Official Insolvency Service publications and fact sheets - Main index
• Guide to Bankruptcy
• What is bankruptcy?
• Where can I get advice about bankruptcy?
• How do I make myself bankrupt?
• How will bankruptcy affect me?
• What are the alternatives to bankruptcy?
• What happens when you are interviewed by the OR
• What is a liability?
• Will all my debts be included in my bankruptcy?
• What is a secured debt?
• What will happen to my secured debts in bankruptcy?
• What will happen if my secured debt is not paid in full after the sale of my property?
• What happens to a joint debt in bankruptcy?
• What to my council tax arrears in a bankruptcy
• What happens to my bankruptcy debts after I am discharged?
• If I am bankrupt, do I have to keep paying my gas, electricity and other bills?

Information regarding court fees remission:

• HMCS - Court fees do you have to pay them? (The form and guidance on completing the fee remission form included). (pdf)
• Example application for a fee remission based on gross annual income - EX160
• Example application for a fee remission based on permitted benefits - EX160

Forms:

• Debtor’s Bankruptcy Petition
• Statement of Affairs - Debtor’s Petition

[tiredandweary]

Re: Thinking about a second Bankruptcy... :-(

WOW!!! Thanks for that guys :-)

I now have a lot of reading to do. I will endeavor to get through it all this week and will hopefully have something positive to report back sometime soon.

Thank you very, very much :-)

tiredandweary