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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4970
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Hi I owe approximately £48,000 to H M Revenue & Customs

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I owe approximately £48,000 to H M Revenue & Customs on my self-assessment tax which has accumulated because I haven't been able to pay anything for the past few years. They have asked me to pay off the debt over the next 12 months which is impossible for me and so obviously the next step would be to take recovery procedures which I fear would inevitably lead to my bankruptcy.

However, I own a flat in London which has about £100,000 equity in it and is jointly owned with my wife who is not bankrupt. Is there any chance that if I am made bankrupt through this debt I could possibly have my home repossessed by the creditors although my wife will not be bankrupt? Could the court still enforce it even though my sister and her son are currently living there as I am living in France.
Hello, I'm Keith and happy to help you with your question. Firstly you should negotiate with HMRC a more realistic recovery schedule. HMRC are notorious for simply not understanding that individuals cannot produce large sums of money at the drop of a hat.

If you are made bankrupt a home jointly owned with your wife is available to the Official Receiver (OR), but naturally only half. However, if there is little equity available from your share, eg if the flat is mortgaged, then what with court applications, selling costs etc then as far as the OR and creditor are concerned it is an exercise in financial futility.

However, if there is substantial equity then the OR could force a sale. It is for this reason it is essential that you take professional advice before going down the bankruptcy channel. Of course your wife would be given the opportunity to buy in your half, but I appreciate that this may not be feasible.

I do hope I have been of help. You must seek advice from a local, trusted expert immediately.
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