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| T O P I C R E V I E W |
| i-o |
Posted - 10 October 2008 : 07:37:37
My wife is the Director of a limited company. She owes roughly £8000 VAT for the past year and a tax bill for around £2000 will be due in January. Our house is only in my name and has no equity. The company is a cleaning company so the assets are a few hoovers and some cleaning products. What will happen if she is declared bankrupt? Will we lose the house? |
| 5 L A T E S T R E P L I E S (Newest First) |
| John |
Posted - 11 October 2008 : 10:10:03
Hi
a DPG is a Director's Personal Guarantee.
A limited company is a stand alone entity and as such if the company is forced into liquidation this has no impact on the directors personally. Director's assets etc cannot be claimed in this way unless a director has given their own personal guarantee over credit. If they have, when the company fails the creditor chases the director(s) that gave the guarantee.
From your post it would seem that the only personal liability is just the £2K you estimate will be her personal tax bill after self assessment.
Regarding the property, it is the fact that it is in negative equity which would make it safe if your wife is declared bankrupt. The fact that she is not on the deeds or the mortgage for the previous property, or the current one, does not mean she has no interest in it in law. If the property had equity and she has made contributions to the household which makes the mortgage, utility payments and any home improvements affordable for you, then it could be argued by the trustee's that she has a proprietary interest in the current property and if there were equity they could eventually force a sale.
As it is in negative equity this won't apply.
If her bill in January is as you estimate she will need to be in a position to pay to avoid BR. HMRC will negotiate payment but if it seems nothing is forthcoming they won't hesitate to petition the courts. Your property is safe and the limited company could go in liquidation but then she may be in line for an IPA if your joint income produces a monthly disposable income of £100 or more.
www.Bankruptcyhelp.org.uk
0800 078 9367 |
| i-o |
Posted - 10 October 2008 : 18:10:50
Thanks for the replys and help! Just to clarify, VAT owed is around £4500 (original figure was from their estimate), roughly £200 Corporation tax, £200 paye, and possibly £2000+ once her self assessment goes in in January. The house is solely in my name because she was made redundant when we were going to move and the equity from the previous house (also solely in my name) plus what I could raise from my earnings covered the move (2.5 years ago). She is now in full time employment again and I am running the company on an ad hoc basis. I am listed as company secretary with no share. BR hasn't been threatened/offered or even looked for yet, just trying to find out the options and it doesn't include me.
Things might not be as bad as it could be. Wifey caught me searching for info last night which forced a difficult conversation! It will be difficult but we may be able to cover the VAT and others so that just leaves the problem of owning a company with little viable future. We will have all the problems, have to cover holidays, maternity etc.. with very little to show for it! Any offers?
Just one last thing, what is a "DPG"?
Thanks again!
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| John |
Posted - 10 October 2008 : 13:04:18
Hi
if the tax is paye or corporation tax then this, coupled with the VAT, is the limited companies debt not your wife's.
Therefore if HMRC chase this through the courts the company will be liquidated.
Unless your wife has given any DPG's she will not be affected.
www.Bankruptcyhelp.org.uk
0800 078 9367 |
| pix1 |
Posted - 10 October 2008 : 11:40:26
It sounds like the house is only in your name and ONLY your wife is going BR. This appears to mean the house is secure as you are not going BR yourself. |
| Needafriend |
Posted - 10 October 2008 : 09:06:25
Hi i-o and welcome to you
I am not sure on how to answer your question if im truthfull so i just wanted to say you could while your waiting for someone who will have better knowledge on how this will work in your case, that it may be a good idea to call our helpline.
I am going to list our helpline number which is 0800 078 9367 and its free and they are indeed very helpful and can give you more options and what would be better for you and your wife in your current financial crisis.
Sorry i cant help other than that, i am still learning but i did not want to leave your post unanswered.
Best of luck
Jo x
Your Mother Hen :-)
Please visit my blog for info on how I got here and other information to guide you through from my experience called:
"Mother Hen's New Debt Free Life with Links and added info on Bankruptcy!" available to view at:
http://debtfreejo.blogs.bankruptcyhelp.org.uk/ |
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