PAYING THE PRICE
Katie Price declared bankrupt for second time over unpaid tax bill of more than £750,000
The glamour model is due to appear in court again
KATIE Price has been declared bankrupt for the second time, a court heard today.
The glamour model, 45, who was not in court to hear her fate, has an unpaid tax bill worth more than £750,000.
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She was previously declared bankrupt in November 2019, with debts of £3.2million.
Katie, 45, did not even send a lawyer to the hearing, which is the latest in a long string of financial woes.
She now faces losing her £2million Sussex pad, dubbed Mucky Mansion - or could see bailiffs come around to repossess anything that could help pay back the government department.
The hearing, held at the Rolls Building in London, heard she owes HMRC a total of £761,194.05.
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Court Judge Sebastian Prentis said Katie had not responded to HMRC over the debt and declared her bankrupt.
He said: "There has been no response from the debtor. The papers are in order.
"There is substantial debt due from Ms Price to HMRC and therefore I will make a bankruptcy order."
Katie, 45, has dodged court for months after the case was moved half a dozen times since November 2021.
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The reality star and model is battling to save her £2million Sussex pad after running up debts of £3.2million.
According to court papers, £535,700 in unpaid national insurance or self-assessment tax make up the majority of the debt, as well as £40,000 in late payment fines.
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In addition, she owes over £140,000 in missing VAT payments on top of almost £10,000 in VAT surcharges.
The £761,994 claim is thought to be for a "liquidated sum", which suggests she may need to sell assets or real estate to release equity.
The judge said: “This petition was presented on 27 November 2023. It is in the sum of £761,194.05. That sum derives from self-assessments for the years 2020-2021.
“And for that year 2021-2022 the amounts payable under those assessments were £142,405 and £196,735.
Why is Katie Price bankrupt?
Reality star Katie Price was declared bankrupt in November 2019 and blew her £45million fortune.
What is bankruptcy?
Bankruptcy is a legal status whereby debts cannot be repaid.
In the UK being bankrupt is limited to applying to individuals but in the US and some other countries, it can be applied to companies as well.
The word itself is derived from the Italian phrase banca rotta meaning "broken bank".
In the modern world, it normally involves a restructuring of debts in an attempt to rehabilitate those who owe the money and sometimes continue with their business.
In most jurisdictions, people or companies are declared bankrupt by a court order.
Is it the same as insolvency?
Bankruptcy is just one type of insolvency in the UK.
There are two legal definitions of insolvency in the UK with one being where a business or individual’s liabilities (what you owe) exceed your assets (what you own), or, where you are unable to pay your debts as they fall due.
Additionally, there are several different types of insolvency, only one of which is bankruptcy, these include:
- liquidation (applies to a limited company or partnership)
- administration (applies to a limited company or partnership)
- company voluntary arrangement (applies to limited companies)
- partnership voluntary arrangement (partnerships)
- individual voluntary arrangement (individuals who can also be made bankrupt)
- debt relief order (where an individual owes less than £15,000)
"The other main category on the petition is VAT due on returns. There are eight of those, being the returns between 31 August 2021 and 31 May 2023.
“The total of those is a little in excess of £140,000. Just as with the income tax self-assessments, no payments at all have been made.
“The balance of the petition is therefore penalties and surcharges and interests and such like.
“The statutory demand in support of the petition was served personally on the 10th of October.
“On 31 January 2024, there has been no response from the debtor and the papers are in order. There is a substantial debt due from Mrs Price to HMRC and I will therefore make a bankruptcy order at 12.03pm."
Which famous people have gone bankrupt?
Several celebrities have gone bankrupt over the years, here are just a few of the big names who have filed over the years:
- Donald Trump has had six of his companies declared bankrupt during his years in business but has never filed personally
- Meghan Markle's dad Thomas filed for bankruptcy last year with credit card debts of £24,181
- 50 Cent filed for bankruptcy in 2015 despite once being worth an estimated £119million
- Former Westlife singer Shane Filan filed for bankruptcy in 2012 with £20.5 million of debt
- Lady Gaga was technically bankrupt during her Monster Ball tour in 2009
The Channel 4 reality star is due to give evidence before an insolvency court in London next month in connection with her first bankruptcy.
She is expected to give evidence to a judge about her income to show how she can pay off her debts.
Last month, the court heard she failed to pay any of the £12,500 monthly payments she agreed to make in April last year.
According to trustees, the arrangement meant Katie was meant to make monthly payments of £12,500 for three years as well as a lump sum of £25,000 in July.
But she is said to have defaulted on every single payment.
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The judge made a court order ruling that Only Fans, two clothing companies and a paparazzi agency will pay 40% of her income into a bank account she doesn’t have access to.
A percentage of her income will start being taken from April 12, the judge ruled.
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