A Warning

This is a story of a debtor who contacted us too late.

Mr X ran a family business which had been passed down the generations.  Mr X owed £50,000 to HMRC which he had difficulty in paying as his business takings had reduced.  His accountants told him to speak with HMRC.

Unfortunately despite discussions no action was taken and Mr X was declared bankrupt.  A trustee in bankruptcy was appointed.  The trustee asked Mr X to continue to trade his business to get the Christmas trade.  A trading profit was achieved.  After Christmas the business was sold to sub-contractors without Mr X's knowledge for a sum lower than the realisable value of the stock,

Mr X separated from his wife and she put the marital property on the market and sold it.  The deeds of the property showed 99% of the equity in the property belonged to Mrs X with 1% belonged to Mr X and thus his trustee.

The trustee has taken legal action against Mrs X for 50% of the equity.

Summary.  Mr X was made bankrupt for owing £50,000 to HMRC.  His businesses annual profits were greater than this sum.  The business was sold for £18,000 and Mr X has no income.  The costs for this bankruptcy have amounted to over £55,000 for the trustees fees and legal fees and the Scale fees amount to a further £9,000.

What a waste.  If Mr X had been referred to Gibson Hewitt & Co we could have reached an individual voluntary arrangement for Mr X allowing him to repay £50,000 tax from future profits.  The costs would have been approximately £4,500 and Mr X would remain in business earning a salary.  His house would not need to be sold.  The cost of not referring Mr X to us is approximately £60,000 in costs alone.

Gibson Hewitt have now at this late stage been instructed to resolve the situation. 

Moral of the Story

TAKE ADVICE

INSTRUCT GIBSON HEWITT TO ACT FOR YOU