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Our client desired to seek debt advice whereby his previous remuneration was to be taxed and was payable to HMRC as a result of their renewed legislation.
For the client, this meant he was due to receive a tax bill of approximately £150k which he did not have the ability to pay. Along with a number of other creditors his total liabilities exceeded £500k.
After a meeting with our team member the client agreed that an application for bankruptcy was the best outcome for him. However, he was concerned as the only asset he owned was a jointly owned property that he shared with his wife and children.
Our inhouse insolvency experts provided him relief and explained that the property would be seen as an asset of his Sequestration, however, if he was able to obtain third party funding, he could retain ownership of the property by paying a sum determined by the available equity in his property to the Trustee thus renouncing the interest.
Our team at Middlebrooks submitted the application to the Accountant in Bankruptcy and an award made. It was determined that there was £26,000 of equity in the debtor’s share of the property following a valuation and collection of redemption statements.
After successful negotiation, a proposal of £12,000 was received. This was submitted to the Accountant in Bankruptcy and circularised to creditors. The AiB agreed to the proposals and 3 out of 5 creditors also responded in agreement. The proposal was therefore accepted.
Our team at Middlebrooks submitted a formal renunciation to the Registrar of Scotland confirming the Trustee no longer held an interest in the property and the debtor was able to reside in the property with his family.
The funds were ingathered from the third party shortly thereafter.
The debtor received his discharge from Sequestration at the first anniversary and the case was closed. The debtor was then debt free and still owned his home”.
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Claire Middlebrook, Scott Bastick and Katie McLachlan are authorised to act as insolvency practitioners in the UK by the Institute of Chartered Accountants of Scotland
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