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J.Ustinovskaya
J.Ustinovskaya,
Category: Law
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I have a Limited company in Liquidiation with an outstanding

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I have a Limited company in Liquidiation with an outstanding directors loan account. I have agreed a monthly amount with the Official Receivers Solicitors. That amount is subject to review every 6 months. The process for testing my income and expenditure was very lax (a questionnaire and no request for bank statements etc) As the OR owns the directors loan debt it seems unfair since if I had been able to keep up with tax payments at the time (this is 5 years back) the overall amount of tax paid would be far less than the actual debt. My question is threefold 1) Are they likely to be far more rigorous on the 6 monthly reviews i.e have I been duped into signing up to a payment scheme, 2) Do they take into account the fact that the debt should have been less in taxation terms than the total amount of debt as it stands now? and 3) Can they just keep rolling this over and changing the term and amount that this scheme is for ad infinitum? (6 years)
JA: Have you talked to a lawyer about this? In which country do you live? If different, which country is your legal question related to?
Customer: This is the UK No I haven't spoken to a Lwayer - I can't afford one.
JA: What steps have you taken so far?
Customer: I've signed the agreement with the Official Receivers Solicitor
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: I don't think so
Hello,

I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Customer: replied 19 days ago.
Sure ok.

Dear Client, thank you for your query. My name is***** am a solicitor and will be assisting you today. I endeavour to provide you with the answer within a couple of hours.

To advise you properly, it would be helpful to see the payment agreement that you signed with the OR. The general rule is that OR shall check your circumstances, bank transactions, expenditures to create a right payment scheme for you. How rigorous are the checks depends on the behaviour of the person (the company director in your case), how severe the breach is (defrauding creditors, wrongful trading, non-compliance with court orders, etc). If you pay on time and OR has no issues with you, it is unlikely they will change their approach to the assessments.

Without seeing their calculations it is hard to comment why the total amount of debt you are paying out is bigger than the initial amount of debt. They may have added their fees on the top and the lender’s unpaid interests as well. You may always send them an email asking to explain to you why the calculation is that much. If you have financial difficulties (lost your job, for example) please tell them immediately so that the payments may be reduced.

Do not forget to declare the following expenditure: rent or mortgage payments, food, heating and lighting, TV licence, broadband and telephone service, household insurance, car tax and insurance, if OR has allowed you to keep your car, membership of the AA, RAC or similar, if you're allowed to keep your car, professional membership fees that are part of your job and not paid by your employer, prescriptions, dental treatment and opticians' fees, payments under a maintenance order or child support agency assessment, a reasonable monthly cost of a mobile phone, dry cleaning; plus reasonable amounts of spending on: clothing, holidays, hairdressers, extra-curricular activities for your children, after-school clubs, pets.

A payment scheme usually lasts for 3 years only. There must be serious reasons to extend it for longer.

Please let me know if I have answered your query and if you have further questions.

Customer: replied 18 days ago.
The outstanding directors loan was £117k. The calculation I think if I had been able to keep up with payments would have been 25% of that initially with a credit back to whatever the Corporation Tax Rate was. This is essentially why I believe the amount I WOULD have owed would have been a lot less. However I do kind of understand that since I no longer 'own' the debt to my old Ltd company that the OR has recourse for the full amount of directors loan and it covers the missing tax payments.I have attached the file in respect of the payment plan.I am happy with the amount of £400 per month but was just nervous about the level of checking now I'm in the scheme. To be honest I have been expecting to be made bankrupt since 2017 so having a closure to this nightmare is the main thing for me. It seems that as long as I keep up the £400 payment per month then all is fine.

As I suggested in the previous message, they added the default interest at 8% and legal costs. You may request the breakdown of legal costs, that have been added to the debt, and estimate if the sum is reasonable.

J.Ustinovskaya,
Category: Law
Satisfied Customers: 27
Experience: Expert
J.Ustinovskaya and 3 other Law Specialists are ready to help you
Customer: replied 18 days ago.
Thanks for your help. Apologies for not tipping...money is very tight at the moment.

No worries and good luck to you!