Case Study
Client Overview
Client Name: Cannot disclose as they are a practising barrister.
Industry: Law
Location: London
Size: Sole trader
The Challenge
Challenge 1: Avoiding the threat of bankruptcy from HM Revenue & Customs (HMRC).
Challenge 2: Bankruptcy would have prevented the debtor from practicing as a barrister and therefore no surplus income would have been available to their creditors.
Our Approach
Solution 1: We spoke to HMRC at the outset and advised them of our instruction with regards to acting as the Nominee in respect of the proposed IVA. We persuaded them to put any further recovery action on hold whilst we drafted the debtor’s IVA proposal. We also liaised closely with HMRC in order to ascertain their expectations with regards to the potential dividend being offered.
Solution 2: The main benefit of the IVA was preserving the debtor’s earning ability, which in turn meant that they could offer their surplus income over a period of 5 years as opposed to creditors receiving nothing in a bankruptcy scenario.
The Outcome
Result 1: The IVA was accepted and the debtor was able to continue trading as a barrister.
Result 2: Unsecured creditors will receive an estimated 70 p in the £ as opposed to only 10 p in the £ had the debtor been made bankrupt.
Client Feedback
“I can’t tell you the relief of not also constantly being worried about my debts. I have been able to relax, and I could write the longest email ever explaining the effects it has had on me, but just to say I am so grateful to you and BABR for putting this forward to HMRC”.
Need some advice?
If you are facing financial difficulties and would like to discuss your options, get in touch to arrange a no-obligation conversation to find out more about the options available to you.
