bankruptcy

[66pete]

ok .. just started to reclaim some of my bank charges back so it might help my situation but i doubt it ..
through my own stupidness i have racked up around 40k in unsecured debts...
have found the girly of my dreams and moved in with her
the only thing i have to my name is a car possibly worth 3-4k along with various other bits and pieces collected via my past years .. pc etc..
now have been looking into all the different ways of paying back the money but now have been kicked again by the csa for around £300pcm .

the money is not there... have been payin back on reduced payments and have dropped the total by around 4k over the past 3 years..
my g/f is fully aware of my situation and is being very supportive.. but i really need the car to visit my kids who are 50 miles away as the company van i have is not insured for passengers.
i get around 20k pa wages but it always seems to just vanish paying off the costs of living etc ...
the debters have now said bugger off you can't pay even less than you have although i have been paying what i can afford one has been very ostructive and has kept trying to remove more money on a direct debit than they should, every time its claimed back thugh and the bnk say it will not happen again etc etc (5 times so far) so then its cancell the direct debit, contact bank and complain, open a new direct debit, which all in all takes 2 months only for it to happen again.
i also feel my health has been affected by all of this .. now why post this ? i don't really know, just after some guidance i suppose and i feel the only way out is bankruptcy as i do not have enough spare cash each month for an iva.

thanks for your time

[Gingerheid]

Do I gather that your car is your only concern about bankruptcy?

If you don't personally need the car for your work or vocation it can't be exempted from a bankruptcy. Your way of keeping it would be if someone (ie girlfriend or relative) would buy it off the Official Receiver.

However, a lot of people have a habit of treating their imagination concerning the value of their cars... is it really worth that? Have you checked the the private sale poor condition price on parkers?

Be aware that CSA arrears survive bankruptcy.

[66pete]

as much as i would like to think its worth less i can see it being worth 3-4k all day long....

[Gingerheid]

Not really a way around that then I'm afraid. If it's worth the top end of that then even if you were legally entitled to keep a car that's more than the value that could be exempted

[66pete]

someone mentioned to me that there might be a way using the v5 document if i can prove i am not the owner of the car but just the keeper.
would be nice to keep the car but am resigning myself to loosing it

[Gingerheid]

But you said it was yours???

There is always the giving assets away before going bankrupt trick. You might want to search on "Bankruptcy Restriction Order" though. And they'd ask for it back as well.

[66pete]

yeah i know, not looking to do anything naughty, but i am looking at all opertunities before i take the first steps ...

[chesham]

If you decide to go bankrupt, [from your post] it would seem your only asset is your vehicle. If it is 'essential' - that is you would be crippled without it - then you would be allowed to keep it. The Official Receiver would not take items such as a TV, sofa, bed etc.

If the debts are genuine, and you didn't act recklessly (i.e. take out a loan with no means to pay it back, or use your cards without making payments) then your bankruptcy will probably last no longer than 12 months. After this, it will be recorded for 6 years on your credit file, and if you were to apply for any finance such as a mortgage, they will ask if you have ever been declared bankrupt, as opposed to are you a bankrupt.

Bankruptcy is a huge decision and is completely life changing - trust me, I've been there - but it was the best thing for me at the time. I lost my job, couldn't find another anywhere near the wages I had been earning before and I had around £30k of unsecured debt, which was all wiped out the minute I walked out of court. However, don't be under any illusions it is as easy as that - you will NOT be able to obtain credit for a long time, and getting a mortgage will be more difficult and probably more expensive - although, I personally think that will change in the future and discharged bankrupts will not be so heavily penalised, but that's another story!

When I went bankrupt, I had a car worth £3k, and I was allowed to keep it because I advised them I needed it for work and to travel to see family, so it might be yours to keep. In all fairness, the cars go to auction and therefore don't raise a lot of money, so there isn't much 'proof' that you need to give the Official Receiver (I didn't have to prove anything).

The only trouble I had was that no one was willing to tell me what the best thing for me to do was! Everyone kept trying to turn me away from bankruptcy as they kept thinking it was too severe, but it wasn't - it was the best option FOR ME. Many of my friends and family were surprised at how becoming a bankrupt was not anywhere near as bad as it was, say, 10 years ago. You really do get a second chance. The hardest part is learning to live without credit - believe me, you notice it's not there! A basic bank account with a cash card and what goes in to your bank account is all you have, no overdraft or credit cards for emergencys but then also no money to buy things you don't need. After a few months, you start being more grateful because when your wages go in, they stay in and don't fly out to creditors left, right and centre - something 95% of my friends are crippled by.

You need to discuss with your girlfriend the impact that it will have on your both. If the property you are in is privately rented and your name is on the tenancy agreement, your landlord will be notified and they could terminate your contract. If you both go to rent somewhere else, some agencies now do credit checks and, of course, you will fail and they may not take you on as a tenant.

If you opt for an IVA, then you will make set payments over 5 years and at the end the rest of the debt is wiped off - a lot of people do it this way, but I can't help thinking this is more for the people who own property or are in jobs which may be affected (solicitors, police officers etc) - as an IVA will have the same impact on credit files, references etc and bankruptcy and will stay on for the same length of time. More and more creditors are now asking if you have been declared bankrupt OR have you ever entered into a voluntary arrangement with your creditors - this will have the same effect as bankruptcy.

As an afterthought, I still have to pay 50% of my 'left over' cash each month to the Insolvency Service as contributions towards my creditors for 3 years, as I had to submit a statement of affairs which detailed all my outgoings. If this is too low though, they won't do this.

I hope this information helps - please let me know if you have any questions.

[Gingerheid]

The reason chesham was allowed to keep the car was because he needed it for work. Unfortunately this clearly doesn't apply to 66pete as he has a works van. The other reasons for needing a car such as travel to see family unfortunately don't carry any legal weight.

But I agree in every other respect - nobody should be scared just of the word bankruptcy. It doesn't have any meaning beyond the practical effects that take place.

66pete's best option is to find a way by which he would be able to have someone buy the car from the OR. It is absolutely true that the OR will not get a good price for the car if he sells it and will also incur agent's and auctioneers fees for collecting it and selling it etc, so the acceptable offer may be lower than he would expect. The parkers Private sale poor condition figure is a good opening shot.

[66pete]

many thanks all the works van insurance states no passengers so might help, i really need the car as its the only way i can really go and see my kids. i can not afford to use a coach or a train. i dont want to seem unresonable about the car as it is in reality the only thing i posess bar the pc i am on now.
the g/f owns her house and is paying the morgage on it. i have no vested interest in the house as under her csa ruling the kids own 50 % she owns the other 50 %.
the final nail in the coffin for me is the csa ariving to give me a final kicking, and i now have had to drop my reduced paymens even further.
i may be able to afford a few pounds to pay back some of my debts for 3 years and have no problem with doing so.
non was induced by gambling but i feel a case of looking at how much went out each month and thinking yeah i can pay that, only kept forgetting i had to live. ex wife sold 2 cars i had paid for and kept the money each time to get something better and i have ended up paying the brunt of it as it was in my name . along with lloyds deciding it was fine for them to give me a 20k loan, even tho i was struggling to pay back the other one i already had. they even tried to give me the full 25k saying hey dont worry its only 5k, no doubt you caould use it, gladly i declined their nice offer. i did clear some of the credit cards with it though and cut them up.
as for actually doing the deed , well no it does not worry me and the thought of NO credit really does not worry me, in fact i can say i will be more than happy to never own another credit card ever again.
i know you have to sometimes sacrifice things to move forwards but its the hassle of selling it or getting it taken away, and finding the funds to get another to see my 2 kids.
many thanks for your understanding replys ..

[Gingerheid]

The legislation:

283(2)

Subsection (1) (The bit that says everything you have falls into the bankruptcy) does not apply to-

(a) such tools, books, vehicles and other items of equipment as are necessary to the bankrupt for use personally by him in his employment, business or vocation;

(b) such clothing, bedding, furniture, household equipment and provisions are are necessary for satisfying the basic domestic needs of the bankrupt and his family

The guidance:

CHAPTER 31.2 Part 3 - Exempt vehicles (bankruptcy only)

[chesham]

Please do sit back and think about no credit for 6 years - I thought it would be the best thing ever, and I still do, but it does take a lot of getting used to, as you will have NO back up if something turns up out of the blue. You will have to save for anything for which you don't have the money. If your exhaust falls off your car or you get a nail in your tyre, how will you afford the repair? What if the tax runs out and you haven't saved up enough?

If you can deal with these (and many more issues), then you'll fine.

In addition, you will never receive another statement saying you owe money. You will never recieved another final demand. You will have no phone calls or letters from debt collectors. The money which is in your bank is yours and no one elses. You will no longer have to make minimum payments.

Even better, you will have NO debt.

[66pete]

thanks for the information gingerheid much appreciated.
no credit for 6 years, i can not say its not going to be a problem, but the g/f has an excellent credit so i might be able to borrow from her if i needed to. we know we can get a ruling that will not tie her into any of my past problems.
about to advise them to take it to court to see if i can continue paying at the reduced level, so might be a while before it gets to it i suppose.

[payingonlyencouragesthem]

You can get unsecured credit after your one year discharge and not always at outrageous rates. I believe Capital One and Vanquis do it. They lend small at first but after 12 months payment history you can get more.

[Gingerheid]

You just so seriously don't want to get involved in a credit card with a 60% APR it's not true!

I think someone mentioned somewhere else that in these circumstances Capital 1 involves a £100 deposit and £125 credit limit.

[66pete]

Originally Posted by Gingerheid

You just so seriously don't want to get involved in a credit card with a 60% APR it's not true!

ffs 60% ... thats just daylight robbery.. cheaper to get a loan from the prudential man who comes knocking on your door isn't it???

[Gingerheid]

Dunno. But you used to be able to get a loan quote off the Provvy website that comes in at 356% APR

[66pete]

i am truly gobsmacked. and they wonder why some people are always on the poverty line.