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Lercan
New Member

3 Posts

Posted - 12 September 2018 :  13:49:50  Show Profile  Reply with Quote
Hi there,

It looks like I might be looking down the barrel of sequestration and I'm terrified. I live with my partner, this is his house, his name is on the mortgage only and right now he earns about 3x as much as I do. We've never married and just about everything in the house bar a few things I actually own are his.

My debt could be around 21k to HMRC for Self Assesment tax, then there is 5k outstanding on credit cards, plus various other bits.

My concern is that if I go and get a PAYE job and I am required to make a contribution, they might take every penny of my wages as he earns too much. This would have a devastating impact on him, as he is in the process of changing jobs. If he had to pay the mortgage, gas, electric, council tax etc. all by himself I'm probably not even going to have a home if I can't contribute to the house.

Please advise, is this truly how the contribution payments could work?

Swandog
Advanced Contributor

71 Posts

Posted - 12 September 2018 :  14:13:44  Show Profile  Reply with Quote
Hi Lercan,

Try not to panic too much about Sequestration as it can often seem much worse than it actually is.

You wonít be required to pay over every penny of your wage as that would be completely unfair.

When it comes to a Sequestration and looking at what you might be able to pay per month an income and expenditure should be completed with you. In an ideal scenario the best way to do this is to do a joint household income and expenditure and then pro rata this based on who earns what in the household.

For example if your partner earns 70% of the household income then the fairest way to split the bills is for your partner to pay 70% of these. If you do it that way then the outcome should always be fair. If there is £100 per month left over after all of the bills are paid then your payment would be £30 per month.

I appreciate though that doing a household income and expenditure might be hard as you may not want your partner to be involved or he may be reluctant to provide details of his income etc. In this scenario the income and expenditure can be based on your income and then what you pay towards the household bills. As long as this is reasonable and evidence of this can be seen then this is what your payment will be based on.

I think the easiest thing to do is reach out to a qualified advisor for some 1 to 1 advice. They can then explain everything in detail and look at your budget and put your mind at ease. They can also look at all of your options and not just a Sequestration.
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Lercan
New Member

3 Posts

Posted - 12 September 2018 :  15:14:12  Show Profile  Reply with Quote
Yeah, I doubt my partner is going to be overly helpful on the income and expenditure. This is my mess and I need to clean it up. Because this was a secret debt that I didn't tell him about, I didn't tell him I wasn't filing my tax returns etc.

The evidence of what I contribute to the house that you mentioned - I rarely used my bank account, just about everything I sent him direct via paypal, as that was how I was paid. At this moment in time he's not even decided if he still wants to be with me because he can't trust me.

He wouldn't kick me out as I have nowhere else to go but I might end up no more than a lodger he can't get rid of because he's a wonderful and compassionate person :(

So if my circumstances change and I do become a lodger, I would have no evidence to back this up other than him writing up a tenancy agreement setting out how much rent I needed to pay, half the council tax and utilities and then I'd need to pay for food which he always paid for.

with no evidence of these change in circumstances other than my word, I doubt the Trustee would be in a forgiving mood and I could end up homeless and his life could be destroyed.
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Swandog
Advanced Contributor

71 Posts

Posted - 12 September 2018 :  15:35:00  Show Profile  Reply with Quote
Hi lercan,

Try not to over think things too much as you will end up making yourself sick with worry which wonít help. I know thatís easy for me to say however.

Right now your partner will be feeling hurt and upset about the situation but hopefully in time that will change. Iíve read countless posts on the forum whereby someoneís partner isnít happy to begin with but in time that will change and they receive the support they need.

In terms of evidence about your bills, you have this by way of the Paypal transactions and this is something which the Accountant in Bankruptcy and Trustee should take into consideration. Nowadays with self-employed people and the variety of ways in which they can be paid i.e. cash, via bank transfer, via Paypal, online Ebay businesses, Amazon businesses a sensible approach should be adopted when reviewing evidence of bills.

Itís harder if everything is cash as there isnít evidence but then a good advisor can keep you right and tell you that for the next 3 months make sure all of your bills go via a bank account or a Paypal etc. That way there is evidence.

If worst case scenario you do become a lodger then a tenancy agreement will help as evidence of the bills, also as I said if he setís your rent payment and contribution towards council tax and utilities at for example £500 per month and you transfer that every month then again this is evidence. You are then allowed expenditure for everything else such as food, clothing, travel costs, mobile phone costs, haircuts etc. A good advisor can explain all of this to you to put your mind at ease.

Advisors, Trustees and the Accountant in Bankruptcy are all used to dealing with a variety of individual circumstances and from what you have told us your circumstances appear to be quite straight forward to work with.

With the size of the debt to HMRC have the suggested any type of legal action such as applying for your Sequestration?

As I said try not to over think things too much and get carried away about the absolute worst case scenario. Hopefully in time your partner will forgive you, you can get some good 1 to 1 advice from an advisor and you can proceed with a Sequestration without worrying that much.
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Lercan
New Member

3 Posts

Posted - 12 September 2018 :  16:42:26  Show Profile  Reply with Quote
With the size of the debt to HMRC have the suggested any type of legal action such as applying for your Sequestration?

No I'm going to apply for it myself since my partner on top of his day job is a working musician, so he has a lot of basses and equipment that are solely his and I can't let it get to the point where an exceptional attachment order might be made and they come out to seize his things. So I need to beat them to it.
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