"Giving the right advice, first time, every time"


God helps those who help themselves….


1 October 2015: The above is a saying with which I am sure we are all familiar. A Bankrupt that we recently dealt with really did not help himself.

Below is a summary of the matter:

  • One of our Insolvency Practitioners based at BRI’s Head Office in Northampton was appointed Trustee in Bankruptcy in August 2013 by the Secretary of State from the Official Receivers’ Rota.
  • The petitioning creditor was HMRC for a debt of £28,000. There was one other unsecured liability of some £500.
  • The main asset in the Bankruptcy Estate was an interest in a property owned solely by the Bankrupt – equity estimated at £60,000.
  • The Bankrupt was interviewed by both the Official Receiver and BRI and advised that, in true ostrich fashion, they had continually failed to submit Returns to HMRC and ignored their demands for payment.
  • The Bankrupt believed that if relevant HMRC Returns were to be submitted, then the petition debt could be reduced to a level whereby a third party could introduce external funds to annul the Bankruptcy Order and so avoid the “tax” that arises in Bankruptcy proceedings being the Secretary of State Fees, and so retain their main asset being the freehold property.
  • We encouraged the Bankrupt to contact The Bankruptcy Advisory Service who were more than willing and able to assist if required.
  • In an effort to assist in this process we contacted HMRC, explained the position and obtained confirmation that they would review, as is normal, their claim if late Returns could be submitted. We also explained to the Bankrupt that we would undertake minimal work in the interim so as to avoid any possible unnecessary costs.
  • The Bankrupt had no accountant. We introduced them to a number in order to assist with him with his Returns.
  • An accountant was selected and met the Bankrupt. He promised to deliver up all documentation needed for Returns to be submitted.
  • Some many months later and, after 4 requests from the accountant, no information had been provided.
  • Repeated requests from this office to encourage the Bankrupt to help himself failed.
  • Reluctantly the Trustee sought an Order for Possession and Sale of the property, this was granted and the property sold within 1 week.

The end result was a dividend of 100 pence in the £ for the creditors, the Secretary of State Fee amounted to some £13,000. We felt impotent to do more and can only ask ourselves why? If only the Bankrupt had helped himself.