Two Adjournments Secured in Contested Bankruptcy Petition

Go Legal successfully halts bankruptcy proceedings while client regularises tax position and addresses estimated HMRC debt

Problem:

Our client, a self-employed individual in the security services sector, faced a bankruptcy petition brought by HMRC over an alleged debt of £306,611.40​. The sum was based entirely on estimated six-year VAT and National Insurance assessments.

The client disputed the figures and had not yet submitted finalised returns due to serious and ongoing health challenges, including significant neurological and visual impairments. With their primary residence at risk, their health worsening under stress, and their business on the line, urgent legal action was needed to prevent an unjust and premature bankruptcy order.

Outcome:

Go Legal stepped in and successfully secured two adjournments of the bankruptcy petition hearing. This gave the client the time and breathing space needed to:

• Finalise outstanding VAT and NI returns;
• Engage professional tax and legal advisors;
• Progress the sale of their home to raise funds for any confirmed liabilities;
• Pursue a wider business restructure, including a planned acquisition and corporate realignment​.

The court accepted that the petition was premature and disproportionate, particularly in light of:

• The unverified nature of the alleged debt;
• The medical evidence outlining the client’s severe health conditions;
• Active and genuine efforts being made to regularise the situation​.

Details of the Case:

Our team prepared and filed:

• A detailed witness statement from the client outlining the health-related, financial, and legal context;
• Supporting medical and accounting documentation;
• Legal submissions addressing proportionality, the speculative nature of the petition, and the prejudice bankruptcy would cause.

We emphasised to the court:

• The debt was entirely based on estimated assessments, not verified returns;
• Bankruptcy would cause unnecessary harm and would not materially benefit HMRC;
• The client arranged to settle any true liabilities by selling personal property and future income via corporate restructuring​.

The court granted the adjournments, recognising that:

• The debt was genuinely disputed;
• Bankruptcy is a measure of last resort, not a tool to pressure compliance;
• The client was engaging responsibly and transparently to resolve the matter.

Legal Tip:
If you’re facing a bankruptcy petition based on estimated tax debts, it may be possible to challenge it. Courts expect public bodies like HMRC to act proportionately—especially where debt is disputed and the individual is making genuine efforts to pay.

Why Choose Us:

• Experts in bankruptcy defence and insolvency litigation;
• Proven track record securing adjournments and dismissals;
• Empathetic, health-sensitive approach for vulnerable clients;
• Skilled in dealing with HMRC and complex debt claims;
• Clear advice, practical support, and fast action when it matters most.

If you’re facing a statutory demand or bankruptcy petition, don’t wait. Speak to Go Legal for urgent, strategic advice. Call us on 0207 459 4037 or request a Free Consultation today.