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‘Yes, Your Honour.’
The judge scribbled something down. Without looking up, he said, ‘Can I assume by your attendance today, Ms Lawrence, that you wish to contest the application for bankruptcy?’
Kate cleared her throat. ‘Yes, Your Honour.’
‘On what grounds?’
‘Compassion, Your Honour.’
The judge looked up from his pad. ‘Compassion?’
The HMRC representative smothered a smirk, believing his case to be already won.
The judge frowned at her. ‘That is not one of the directives available to me, young lady. I can adjourn an application if there is good reason. I can challenge the plaintiff’s efforts to engagein reasonable negotiations to repay the debt, and I can ensure the evidence is admissible and that the proper process has been followed. What I cannot do is overturn an application for bankruptcy if all attempts to recover the debt have failed and the defendant is liable for that debt.’
‘I understand that, Your Honour. But I also believe I’m allowed to petition the court to deny bankruptcy if the debt can be repaid to the creditor.’
‘That option should already have been explored. Are you saying you’re now in a position to repay the debt?’
‘No, er… I mean, yes, but not within the timeframe HMRC are allowing. I need longer to pay off the debt, which is something I’m very keen to do. Bankruptcy would result in my licence to practise law being revoked and that’s something I’m desperate to avoid.’
The judge raised an eyebrow. ‘You’re a solicitor?’
‘Yes, Your Honour. I specialise in wills and probate.’
He looked down at his file. ‘I can’t see any details of your salary listed. Are you currently employed?’
‘It’s a bit complicated—’
‘With all due respect, Your Honour.’ The HMRC representative jumped up. ‘We’re fully aware of Ms Lawrence’s personal circumstances and a thorough financial assessment has been carried out. Our conclusion is that Ms Lawrence has insufficient means to repay the debt within a reasonable timeframe.’
The judge removed his glasses. ‘I have no doubt that due diligence has been carried out by your office, Mr Whittle, but I will allow the young lady a few minutes to enlighten me.’
The man didn’t look happy, but didn’t query the matter further and sat down.
Kate rubbed her clammy hands on her skirt, trying to control the shaking. ‘Thank you, Your Honour. The debts were accruedby my ex-husband during our marriage. I was unaware of their extent – or that a number of them had been taken out in joint names – until after bailiffs had been instructed to recover the debts. Over the last two years, I’ve made a concerted effort to pay off the money owed and avoid any legal action, which until three months ago I believed I’d achieved.’
The judge replaced his glasses and checked his file. ‘There is a property listed here – has that been sold?’
‘The flat is currently being repossessed by the mortgage company and there’s no equity. I’m temporarily living with my cousin in Godalming, where I’m working as a paralegal for my uncle’s family law firm.’
‘A paralegal?’
‘Yes, I was previously employed by Blandy & Kite in Putney, as a wills and probate specialist.’
‘Was your position terminated?’
‘No, Your Honour, but I couldn’t afford to stay in London. I felt that moving back in with family would allow me time to find another job and rebuild my life, even if it meant a demotion. However, I’d never have given up my job in London if I’d known that money was still owing to HMRC.’
The judge lifted a document from the file. ‘The debt owing to HMRC covers unpaid tax and fines from self-employed earnings for five years. Are you claiming you were unaware of these debts?’
‘Yes, Your Honour. My ex-husband led me to believe the business he ran was registered as a limited company. That’s the only reason I agreed for my name to be included as a director.’
The judge referred to his notes again. ‘I see that your ex-husband has declared himself bankrupt.’ He turned to the HMRC representative. ‘Have sufficient attempts been made to recover the debts from Mr…’ he glanced at his notes, ‘Mr Morrison?’
‘Yes, Your Honour. Mr Morrison is living in a local authority property and claiming Universal Credit. His partner is also unemployed. We have no expectation of him being able to repay the debt within the foreseeable future.’
The judge turned to Kate. ‘Which rather leaves you in a precarious situation, does it not, Ms Lawrence?’
