Advice needed please-bankrupcy

[Sugarbabe47]

Hi

I have been sruggling with debts since 2000 when my ex husband decided to leave me with all the debts/bills to pay. I had 2 children 1 at school and 1 at college. I had to work 80 plus hours a week to survive, dealing with rent arrears,council tax arrears plus numerous debts that appeared when he left us. I am still struggling to this day and have been advised by C.A.B and CCCS (last year) to go bankrupt- now this seems to be the only way forward for me at this present time and I am seriously considering it, however maybe I am *old school* but what does this mean? I am scared about my job, my car and what little I have in my rented home.

I am receiving help from TT (many many thanks!) with bailiffs and charges and L/A - but I am scared to go down this road. I have chatted to my boss who says it wont affect my job-I physically cannot work any more hours - I now work 50 hrs a week, but I have managed to get rid of all rent arrears so going bankrupt shouldn't affect my home? Or does it??

I am in such a mess and want to be able to live properly as apposed to struggling week to week, not knowing when I can afford food for myself....any help would be appreciated..thank you.

[blue4ever]

Hi Sugarbabe47 WELCOME TO CAG You have come to the right place

Have a read of http://www.consumeractiongroup.co.uk/forum/formal-solutions-bankrupty-administration/149519-personal-stories-bankruptcy.html peoples stories of bankruptcy

and also look at this The Insolvency Service Website

Good Luck Paul

Edited August 5, 2008 by blue4ever
SPELLING

[palomino]

If you've been advised to go bankrupt by CAB etc. then obviously that's the way to go.

I've been considering this for some time myself so I've had some time to research everything. In my case it's not certain whether I should but my circumstances are different from yours.

 

blue4ever has already pointed out the insolvency website which is compulsory reading in my view. Other good sites are : Bankruptcy Advice - Money Advice and Information - CCCS

National Debtline England & Wales | Debt Advice | Factsheet 01 Bankruptcy

 

The forms you use are here England and Wales Forms . The specific forms you use are 6.27 and 6.28 (and the guidance notes for 6.28 ).

 

It costs £495 to petition for bankruptcy, £150 for the Court fee and £345 for the Official Receiver. You need to complete the forms and then take them to your nearest County Court where you will be required to swear and affidavit. At which point are bankrupt - and whole load lifts off your shoulders .

You will be asked if you have taken professional advice, which you have by contacting the CAB and other organisations.

 

 

I know it seems like a defeat by having to go bankrupt after working hard for all those years. But think of it as new start - and go for it!

If you're going to do it do it as quickly as you can because the sooner it starts the sooner it finishes. Most bankruptcies last for one year but there have been instances of six months.

 

Whatever happens, good luck:)

[stardust_john]

Sugarbabe sounds like you've done your utmost to sort out your debts, go with cab and wipe the slate clean.

[Sugarbabe47]

Hi and thanks for the support.

 

I am still pondering going bankrupt!! weighing it all up so to speak...I have battled on for 6 or more years now and getting nowhere, so I know it has to be the way forward, but like I said before I am scared of the whole thing...bank account, car etc...It does seem scary.

 

But I will keep you all informed and if I need to ask questions I will of course ask you guys..

Thanks again.

Sugar

Edited August 6, 2008 by Sugarbabe47
bad spelling---ooops

[brent100]

Listen.......there is NO shame in going bankrupt. Don't let anyone tell you differently.

 

What have you done..........just got into debt. That's all.

No-one has died, you've not murdered anyone or intentionally hurt anyone.

 

Remember..... William Roache (Ken Barlow) has been bankrupt, as have shane ritchie, Walt Disney, Kim Basinger, Mike Tyson, Henry Ford (Started Ford motor company) plus many others who just had debts they couldn't satisfy.

 

Who thinks any less of them..........nobody.

 

Keep your chin up love and go for it. As a previous thread has said it's not the end of the world but a new beginning.

 

A guy recently tried to avoid bankruptcy.... and ended up faking his own death in a canoe..... look how that turned out.

 

Face up to it....do it and live life again.

 

Take Care

 

Brent

[Sugarbabe47]

Hi Brent

Thanks for the kind words...I am being told by close friends that I NEED to do this for my health as I have suffered from 2000/01. The only problem is getting a bank account, as my ex husband left me in several thousand pounds of debt, it took me over 12 months to get this basic one I use now. I am so scared of the stigma with going bankrupt, scared of going to court..I know I must do this as I have been told by C.A.B and CCCS (last year!)

What happens if you need a telephone in your home?? Does anyone know?? I am on prepayment meters for gas and electricity so thats not a problem. I am sooooo confused about all of this and I am reading everyday to get some knowledge on the subject. Is there anyone out there that can tell me the process, step by step?? Any advice would be grateful. I go back to C.A.B 18th August to start bankrupcy with their help...oh I am so tired with all the worry, sleepless nights...I too have considered suicide over money troubles--I want it all to be over, I am under a lot of stress with it all. Thanks again.

[sequenci]

I am being told by close friends that I NEED to do this for my health as I have suffered from 2000/01.

From the information you have posted, I agree.

The only problem is getting a bank account

You can get a new basic bank account from a selection of banks, even as an undischarged bankrupt - I think Barclays will let you, and possibly Halifax too.

I am so scared of the stigma with going bankrupt

It's nowhere near as bad as you think, lots of people go bankrupt every day. recent changes in the law have made bankruptcy a much simpler process than before

scared of going to court

it's a civil court - nothing like you see on episodes of the bill

What happens if you need a telephone in your home?? Does anyone know??

you can set up a pre-payment scheme.

 

The process:

 

1 - fill in the bankruptcy petition, you can fill it online at insolvency.gov.uk

2 - take the form and the fee to your local county court, they will arrange for a hearing (the hearing takes 5-10 mins tops and the judges are usually quite nice people)

3 - once declared bankrupt your debts will be written off

4 - you then liase with a person called an official receiver who deals with all your creditors.

 

take a read of those factsheets that have been posted up.

 

if you need anything else, drop me a PM.

 

I'm a professional Debt Counsellor for one of the debt-help charities in my 'real' job so I can answer anything queries you maye have

[palomino]

SB, yes it's a major step and things will be awkward for a while. But things are awkward now anyway but just a bit different.

 

Telephone should be OK.

 

The process is not one to be scared of. Nothing is going to happen. People are not going to crucify you or anything like that.

First of all you need to start filling in the forms. Once you've done that you take them to your nearest County Court (ring them first because a few County Courts don't handle bankruptcies so it's wise to check).

When you get there you need to make a declaration under oath, a judge will ask you a few questions - specifically if you've had professional advice

- and that will be pretty much it.

You do have to pay a court fee of £145 and a fee to the Official Receiver of £345. They don't take cheques ...

After that you have to deal with the Official Receiver. These people are pretty switched on to the circumstances of people such as yourself and they will help you enormously.

 

Both the court staff and the OR will treat you sympathetically and will help you as much as possible.

 

 

Your bankruptcy will probably last a year although I know one person whose br only lasted six months. It depends on the OR.

While you are br you cannot obtain credit for more than £500 without disclosing you are bankrupt.

At the time you are made bankrupt your bank accounts will be frozen as they immediately become the property of the OR. Your income after all your expenses must be paid over to the OR.

One small consolation is that while you are bankrupt you do not pay tax. That just becomes another debt in the bankruptcy - behind the scenes HMRC lodge their claim for the tax with the OR.

 

If any money is paid to the OR then it is distributed to the creditors in proportion to the amount owed to each. Incidentally this is one reason why creditors, especially DCAs, add on enormous fees : it increases their proportion of any pot that might become available.

 

 

There's lots and lots more about bankruptcy so keep reading. The best place to start is the governments insolvency website - The Insolvency Service Website

Also talk to your local CAB and the National Debtline, for FREE CONFIDENTIAL and INDEPENDENT ADVICE call 0808 808 4000

Edited August 6, 2008 by palomino
bad link

[brent100]

Sugarbabe

 

The post from Sequenci is right about the bank accounts. Barclays do one, as do the Co-op & Nationwide.

These accounts are primarily for bankrupts. You can have a card but it does not allow you to pay for things in shops...you can only withdraw cash. You can pay by direct debit and standing order though just like any other account.

Only difference is there is no cheque book or debit card (just a cash card)

 

Cheers

Brent

[Sugarbabe47]

Cheers Brent.

One more question..C.A.B mentioned that because I am a *single person working* I may have payments taken from my wages, possibly about 40 pounds, and that the OR usually goes for people like me?? and that lasts for 3 years, so that is what concerns me...being bankrupt for 3 years.

I work now 50 hrs a week and earn just £1,000 a month, my daughter is moving out anytime now, I have no parents...just me and me dog!!

Does anyone know what the guidelines are for household expenses??

Please any help is appreciated.

[palomino]

I may have payments taken from my wages, possibly about 40 pounds, and that the OR usually goes for people like me?? and that lasts for 3 years, so that is what concerns me...being bankrupt for 3 years.

 

The OR doesn't 'go' for people, however it is his duty to ensure that the creditors get as much as possible without leaving you completely destitute. You can't just walk away with a bankruptcy in your back pocket and then go off enjoying the high life. You have a responsibility to your creditors which the OR expects you to take seriously.

 

The OR may order that the payments continue for three years which is not unusual. The bankruptcy itself will probably last for one year.

Some bankruptcies last for even less then one year, some for more than one year (if you don't co-operate fully with the OR).

Edited August 7, 2008 by palomino
Missed a word

[Sugarbabe47]

Palomino,

Thanks..but I just used the words that the C.A.B advisor told me..He said the OR tend to "go for people like me" I asked what he meant by that and he said " single people working"

Believe me I don't expect to be living the high life..never have and I doubt I ever will, but I am so very cared and confused.. mentally this is torture.the past 6 years have have been hell, with all the other issues going on in my life (see thread bailiff!) I am suprised that I have kept out of a mental home, and I don't say that flippently. This financial pressure has drained every ounce of fight left in me. But thanks for the advice, it is very helpful in making my mind up.

[brent100]

Hi Sugarbabe

 

As I undersatnd it the OR will look at you expenses and will be ok and understanding so that you can have enough to cover your "reasonable" living expenses with a bit extra to cover lifes emergencies.

Any surplus may be taken into account and given to your creditors for a maximum of 3 years though you will probably be discharged from banruptcy after 12 months.

 

I think the CAB may have been referring to you as a "single working perosn" as someone with dependants (spouse & children) will have more to take into account before looking at any surplus. The OR will not want your children to suffer because of this whereas a single person will not have this extra responsibility.

 

That's how I would see it anyhow.

 

Take care

 

Brent

[fermi]

Hi.

 

The OR will only ask you to agree to an Income Payment Agreement if once your reasonable living expenses have been taken into account, you have £100 per month or more 'surplus'.

 

They would then ask you to pay between 50 - 70% of that surplus (on a sliding scale) for up to 3 years. That amount is reviewable at any time should your circumstances change.

 

But the overriding principle is that you should always be left enough to provide for your reasonable domestic needs. So don't be too concerned.

 

You would still be discharged after one year (or even early).

 

There is some info on IPA's here:

 

Income payment orders/agreements (ipo/ipa)

 

and some detailed information on how they assess the disposable income here (a bit of a read):

 

OR's Technical Manual - IPAs Assessment of real disposable income

Edited August 7, 2008 by fermi

[Sugarbabe47]

Hi Fermi

Many thanks for kind words. I am struggling with should I, shouldn't I? If that makes sense? Every day I am constantly thinking about going bankrupt..the main reason for my thinking no is the bank account and trying to set up DD's for essential bills, this alone scares me as it took years for me to get this account from what my ex left me in. I had a managed account before and paid for the use of an account, which was stupid amounts. Its true what I have heard the poor get poorer!!

It angers me that I have worked all my life and raised 2 kids basically on my own, and to end up like this-it's demoralising to say the least. The only positive thing I can say at this time is both my kids have grown up to be respectable young adults, with no Police, no drugs no trouble whatsoever. I do feel embarrassed and to talk to my kids about it and it would cause them to worry too, they are not in a position to help anyway and I wouldn't ask them! They know something is wrong but I don't have the heart to worry them. My daughter is excited at getting her first place soon, so I don't want to burst her bubble.

Anyway sorry for going on, it is nice that here people do care and I really appreciate it. Thank you again.

[fermi]

I can understand your concerns regarding bank accounts.

 

The Coop Cashminder is routinely available to undischarged bankrupts, and apart from a small risk of it being temporarily frozen it is usually OK to open before you go bankrupt. I know many people who have.

 

Sometimes the account is referred for a few extra I.D. checks, but by design poor credit history or bankruptcy should not be a bar to obtaining it.

 

It has internet/telephone banking, standing orders & direct debits and a Visa/Electron debit card, and as a basic account you can pay in cheques/cash at a post office.

 

The other account routinely available is the Barclays Cashcard account. There is no online banking or debit card with that one though.

 

So your banking options while you are undischarged from bankruptcy are very limited, but they are some there.

 

Plus some people find the various pre-paid credit/debit cards to be useful for places that will not accept the payment methods allowed by the above accounts.

[Sugarbabe47]

Hi

Another daft question- do I pay my bills or does the O/R? It seems as if I lose control completely of my finances? or am I being a bit thick here!!

Thanks for help.

[palomino]

You pay your normal daily/weekly/monthly living expenses out of the income you are allowed to retain. The OR pays the creditors in the bankruptcy.

[fermi]

do I pay my bills or does the O/R? It seems as if I lose control completely of my finances?.

 

You pay them. And you don't lose much control (except your former debts ).

 

The OR will take control of your former finances/debts, but you are permitted to continue using a 'basic' account (or open a new one) so that you can be paid wages/benefits and pay bills etc.

 

The OR doesn't get themselves involved in the actual day to day running of your finances during your bankruptcy. They are busy enough without that.

 

You have to inform them of any change in circumstances or income, but they don't routinely monitor your account.

[DZZ]

Hi, bankruptcy is a scarey thing to be honest i have been there this year, but once its done and dusted its the best feeling in the world!

 

There is 2 bank accounts available to undischarges bankrupts as posted above Barclays and Co-op i will warn you though co-op takes roughly 4 weeks to set up but it seems to be the choice of accounts for bankrupts.

 

As for your house, if its rented thats ok, is it rented off the council or private? if its private the OR will inform them of your bankruptcy and some landlords can get funny about this but if your honest with them they can usually be ok as long as they have never had a problem in the past.

 

Your car if is worth over £1000 would be taken by the OR, if it is worth less than £1000 then they will give you the option to buy it back at a cheaper rate, otherwise you have to prove to them why you need your car, ie why you cant get a bus to work etc?

 

Once you have been to the CAB again and gone through your income and expendature and they recommend bankruptcy, i would at that point then stop paying any of your creditors and just pay your essentials water, gas, electric, rent etc and save up for the £495 fees.

 

I would then start to fill your forms out some courts require you to take 3 copies but some only 1, i would ring the court local to you and ask, and either find out if they work on a appointment system or drop in system, and book your court date if needed mine was a 3 week waiting as they was so busy.

 

On the day you either turn up for your appointment or drop in, you will speak to one of the advisors who will ask you if you have sought legal advice ie CAB they will ask you when and where you spoke to them, they will check your paperwork as you to make a decleration under oath, they will then take you through to where you wait to see the judge, i didnt need to see the judge as they read through mine and as it was a simple case signed it and put the date and time on it and i was declared bankrupt! if you do need to see the judge its just to make sure you know what the implications are and to check you have sought the correct advice.

 

You are then just made to wait 10/15 mins while they send the information over to your OR and your done!

 

You will recieve a phone call later on so make sure your available to answer your phone all day, this will be from the OR assistant checking everything went ok and advising that they will be writing to you to organise either the face to face interview or telephone interview, mine took 4 weeks since they was really busy.

[fermi]

Your car if is worth over £1000 would be taken by the OR, if it is worth less than £1000 then they will give you the option to buy it back at a cheaper rate, otherwise you have to prove to them why you need your car, ie why you cant get a bus to work etc?

 

Cars are a little more complicated than that.

 

If a bankrupt requires a vehicle for their domestic needs or work, then the OR can declare it as an "exempt asset".

 

It is up to the bankrupt to show the OR why the vehicle is necessary rather than just convenient.

 

If the OR agrees to declare a vehicle an "exempt asset" but the car is worth much over £2,000, then they may require you to replace it with something cheaper so that the excess value can be paid into your estate.

 

If the OR is unable to declare the vehicle an "exempt asset", then they have a legal duty to deal with the vehicle irrespective of value since they are then in effect the owner. For a low value vehicle that could include offering it back to the bankrupt for a small/reasonable sum, but it can also include disposal of the vehicle.

[1littleduck]

Hi,

Just been reading all of the above, can anyone tell me if they publish bankruptcy in the local papers?

I am considering it myself, but live in a small village, and the thought of all knowing really puts me off.

[brent100]

Hi 1littleduck

 

Yes they do publish it in the local paper - just a very small ad usually in the section that invites tenders etc...for council contracts and any planning ads. Very few people read them anyway.

Would you look for who has been declared bankrupt if you were not in this situation??

 

The chances of your neighbours reading it are small but if they do - so what. Hold you head up high and be honest with them.

What would you think of one of your neighbours if you found out they ahd gone bankrupt? Would you feel sympathy or would you gloat in their prediciment? I would suspect you would sympathise and support them.

 

Bankruptcy is NOTHING to be ashamed of. Walk tall my friend.

 

Good luck

 

Brent

[palomino]

Hi,

Just been reading all of the above, can anyone tell me if they publish bankruptcy in the local papers?

I am considering it myself, but live in a small village, and the thought of all knowing really puts me off.

 

Yes they do but possibly not in all the 'village' papers. Best thing to do is to scan the public notices every day/week (whenever it's published) and see where the bankruptcies are listed.

 

Unfortunately everyone does get to know. Maybe it's doesn't matter so much in a big city where you're anonymous.