Advice needed please-bankrupcy

[Sugarbabe47]

Dzz

 

Many many thanks for that..it does not sound as scary as I have feared. I go on Tuesday to local C.A.B with my decision..I am going to go bankcrupt. I have weighed up all the pros and cons and its the only way forward for me. I have struggled for over 6 years now and its been that bad I have been unable to feed myself at times.. I do not want to continue like this. I have suffered depression because of finances.

One more question.

When does my bank account get frozen and am I allowed to take my wages out to pay for rent, counil tax etc?

 

You people on here are fantastic and the advice given is most helpful, thank you again.

 

I wish I had found this site when that parasite of an ex husband first left me in this doo doo!

[brent100]

SUGARBABE

As I understand it - your account will get frozen immediately, however you will be ok to take what you need for your basic requirements - mortgage,rent,bills etc...

 

I would get the basic account set up asap though and get things paid in/out of that account as soon as possible (wages, direct debits etc...)

As it will be a basic account the OR should hav no interest in it

 

Hope that helps and good luck

 

Brent

[Sugarbabe47]

Brent

Thank you. I was under the impression that I can not open a basic account yet until after I go bancrupt?

[brent100]

sugarbabe

 

Anyone can open a basic bank account at anytime. They are NOT JUST for bankrupts. It is just that the banks that offer these accounts will consider bankrupts also.

 

I would get it open as soon as possible so that it is in place for when you need it.

 

Go to your local barclays, nationwide or co-op and ask the questions but I'm sure this is correct.

 

Cheers

Brent

[Sugarbabe47]

Hi UPDATE

 

I went to local C.A.B on 19th August and he (financial advisor) has filled in paperwork for me to apply for "help with bankrupcy fees". I must admit I did not know that this kind of help was available, so I may be able to get assistance with the bankrupcy fees! I am just waiting now for the forms to come back with a decision. What I want to know is 1) Can I go and open a basic account now ready for the bankrupcy?

2) How do I get a home telephone line whilst a bankrupt?

(I do not understand pre payment!)

3) My car is only worth 5/600 pounds and I travel to work in it, I work in another town from my own.Would I lose my car?

Any help would be appreciated thanks again.

[palomino]

sugarbabe

 

Anyone can open a basic bank account at anytime. They are NOT JUST for bankrupts. It is just that the banks that offer these accounts will consider bankrupts also.

 

I would get it open as soon as possible so that it is in place for when you need it.

 

Go to your local barclays, nationwide or co-op and ask the questions but I'm sure this is correct.

 

Cheers

Brent

 

Brent, The point that sugarbabe is raising is that if you open an account before you go bankrupt then, at the point you are declared bankrupt, the account immediately passes to the Official Receiver. The OR may or may not let you use the account but that is not automatic.

Hence you have to wait until after being declared bankrupt before you apply to open a basic account.

The strategy to follow of course is to empty any cash from all the accounts you have, perhaps leaving enough for essential direct debits and standing orders.

After being declared bankrupt then open a basic account and put the cash in that.

[Sugarbabe47]

Hi Palomino

Many thanks for that! I was confused with what Brent had posted. I understand that bank accounts are frozen with immediate effect as soon as you are declared bankrupt. I would still like some help with the other 2 questions in my previous post though if anyone can that would be great.

Thanks again.

[fermi]

If you can practically achieve it, then it is best to open the new basic account (Co-Op Cashminder or Barclays Cashcard ONLY) after your bankruptcy hearing.

 

However that can be very impractical for many people, and in general it is normally OK to have opened and be running the Barclays or Coop basic accounts before your bankruptcy.

 

It is the BANK that usually freezes your accounts when they become aware of your bankruptcy, NOT the Official Receiver as is sometimes claimed. This also does not normally happen immediately in a practical sense.

 

I've seen many many dozens of people open the Barclays and Coop accounts before bankruptcy, with only the odd one or two problems. In most cases the accounts are never frozen, even for a short time. The few occasions were there have been a problem were really a result of miscommunication or misunderstandings between the bank and the OR.

 

Saying all that, if you wish to avoid the very small risk of having the account open before bankruptcy then it is advisable to open the account afterwards.

[fermi]

My car is only worth 5/600 pounds and I travel to work in it, I work in another town from my own.Would I lose my car?

 

I would say that it is unlikely that you would lose a car of that value if it is needed to travel to work. However, you must be aware that there is a very large amount of interpretation and discretion involved in how cars are dealt with.

 

It is up to YOU to convince the OR that the car is essential.

 

When looking to see if a vehicle is essential for travelling to work or your domestic needs, then the OR will need to be satisfied that there are no cheaper practical alternatives.

 

There is a extract from some of the OR's guidelines below at the end of this post.

 

That the car's value is fairly low is no guarantee that the OR will not seek to claim it if they feel that you have been unable to justify it as necessary rather than just convenient. I've seen an OR attempt to claim cars as low in value as £100 (seems ridiculous I know), or even to dispose of as scrap.

 

The reason for that is that if the OR is unable to declare the vehicle an "exempt asset" necessary for your domestic needs, then they have the legal duty to dispose or sell it irrespective of value or condition.

 

For a low value non exempt vehicle, the OR can at their discretion offer the vehicle back to you or a relative for a reasonable sum.

 

Extracts from OR's guidelines.

 

Bankrupt claiming vehicle as exempt property

 

It the bankrupt's responsibility to satisfy the official receiver that a vehicle is exempt property, i.e. that it is necessary for his/her use personally in his/her employment, business or vocation, or is necessary to meet the basic domestic needs of the bankrupt and his/her family.

 

In the case of a claim for exemption to meet domestic needs the official receiver must be satisfied that the motor vehicle is necessary to the extent that no practical alternative exists, to meet a genuine need and not merely a matter of convenience.

 

If the use of a vehicle does not meet the test for necessity the vehicle is vested in the bankruptcy estate and the official receiver as trustee should instead pursue with the bankrupt the option to make a reasonable offer for the purchase of the vehicle

 

The bankrupt's claim should be dealt with at the initial interview in either the narrative statement or in supplementary questions to the Preliminary Interview Questionnaire.

 

The bankrupt needs to be able to satisfy the official receiver that the vehicle is both necessary for his/her employment, business or vocation and is necessary personally to the bankrupt. This does not mean that the vehicle must be used exclusively by the bankrupt but it must be necessary to him/her not just to the other users.

 

Whether or not a vehicle is exempt property is in some cases a difficult question. In such circumstances, official receivers will need to use their discretion and consider each case according to its merits within the guidelines issued to official receivers.

 

In all cases official receivers should apply the guidance strictly and rigorously. It is for the bankrupt to convince the official receiver that any motor vehicle is necessary within the exemptions.

 

The value of the vehicle is not a determining factor.

 

 

Bankrupt claims he/she needs vehicle for work

 

When considering whether to exempt a motor vehicle the principal points that the Official Receiver has to consider are;

• whether the vehicle is used by the bankrupt in his/her employment, business or vocation,
  
• that the bankrupt could not reasonably travel to and from his/her place of employment without a vehicle, due to lack of alternative transport,
  
• that the bankrupt’s prospects of obtaining employment would diminish without use of the vehicle, even though the bankrupt may not be in employment at the date of the bankruptcy order. In such cases, the official receiver will need to decide whether there is a reasonable prospect of the bankrupt obtaining work,
  
• that a self employed bankrupt who does not have work at the date of the bankruptcy order may be able to retain a vehicle as an exempt asset if he/she can satisfy the official receiver that there is a reasonable prospect of him/her obtaining work, and
  
• that the bankrupt’s prospect of obtaining work would diminish even if a vehicle requires repair but will then be used to travel to work or to seek employment.
  

The bankrupt must satisfy the official receiver that a vehicle is necessary. If the bankrupt cannot do so, and the official receiver has reasonable grounds for believing that the vehicle is not exempt, he/she is entitled to treat the property as part of the estate and deal with it accordingly.

[palomino]

It is the BANK that usually freezes your accounts when they become aware of your bankruptcy, NOT the Official Receiver as is sometimes claimed. This also does not normally happen immediately in a practical sense.

 

You're quite right of course.

 

----

 

Although I have researched extensively I have not been bankrupt myself. Consequently there are some things I'm not 100% up on. How does the bank know you are bankrupt? I presume you are obliged to tell them but does the OR notify them officially?

[palomino]

2) How do I get a home telephone line whilst a bankrupt?

(I do not understand pre payment!)

 

You're not obtaining credit so you just keep using the telephone line you have at the moment.

If you don't have one at the moment then I guess BT (or whoever) will require you to pay something up front to cover the first usage of your phone when they install it. But I have no personal experience of this and others will be better able to advise on this.

 

Your question on cars has now been covered pretty comprehensively by fermi.

[fermi]

How does the bank know you are bankrupt

 

The OR will write to the bank to:

 

* inform them of the bankruptcy,

* say whether they have any interest in funds in the account

* tell the bank whether they are happy for the bankrupt to continue using the account (subject to bank policy).

 

Explained in detail here: INITIAL NOTICES AND LETTERS

 

The bank may also find out by other means, such as credit records, the London Gazette etc. If that happens before the OR has had time to write to the bank, then that can result in a basic account being temporally frozen.

[palomino]

Fermi, Thanks for the explanation!

[389shell]

Good luck, I am sure the weight will fall off once you have been given the nod

[Sugarbabe47]

:confused:Hi all

 

Confused now!! I have another question. I rent my home and have done for over 20 years! What I want to know is because I have had arrears in the past and sorted them out, and just cleared my arrears (since that ex did one!) would I lose my home? Would my landlord try to get me out???

Thanks for all the help and support.

[fermi]

Rent arrears are a priority debt, so clearing those recently shouldn't cause you any trouble.

 

If your landlord has any sense that he should see that you will be better able to meet the rent after the BR.

 

After all, the official receiver will expect to see your rent in your budget, and you will no longer have the normal consumer debts to service. In an odd way you should be a better bet as a tenant.

 

Do you think your landlord is someone who you can explain this to?

[Sugarbabe47]

Hi Fermi.

No I cannot explain to the landord - its tricky really. To cut a long story short I have suffered criminal damage and harrassment for over 5 years with my neighbours. At first no-one, including my landlord believed me, anyhoo upshot now is- the neighbours are being evicted!! after a very serious court case involving them all next door to me...so I have had a lot to put up with, so no I do not trust my landlord with this personal information about myself. All this has been ongoing with all my financial pressure too. I work 50 plus hours a week and concerned that if I informed landlord (been a tenant for over 20 years!) that they may try to evict me, as I am sure all the other neighbours will know my business,as landlord tends to "chat to other tenants about other tenants" I keep myself to myself if that makes any sense, and prefer to keep it that way.

So this is something else that I am worried about - my home.

Thanks for the reply.

[phat256]

i am not too sure fermi about the retnal arrear.

 

by my own experience i had council tax and rental arrear , which is also a prioprity debt, i stopped paying my other creditor so i can pay tax arrear and i can tell you my OR was not an Happy Bunny about it ! he told me that he see that as preferential treatment towards one creditor. my OR keep telling me that i may have a BRO for this, until i mention that i was advised by national debtline to do that .

[fermi]

That was badly phrased on my part.

 

If I remember correctly, rent arrears are normally treated differently.

 

There was a High Court or Court of Appeal ruling a while back that stated that a landlord would still be able to seek possession of a property through the courts due to non payment of arrears, despite them being included in the bankruptcy.

 

Because of this I think the OR generally takes a softer line on these.

 

Certainly where the bankrupt is the subject of a suspended possession order on the property due to rent arrears, the OR will often permit the bankrupt an amount in their income and expenditure to pay off the arrears despite those arrears technically being a debt provable in the bankruptcy.

[phat256]

thanks fermi sorry i didn't want to sounds a bit harsh ! lol anyway thanks for the clarification i may passed that onto my OR in the future if he want to BRO me lol

[Sugarbabe47]

Fermi

Thanks for that, but I have just managed to clear rent arrears, ongoing from 2001. I also have a suspended order from 2003. To cut it short what I want to know is, I have court costs to repay now the arrears are cleared - £430.00 I know I have to pay would the OR take this into account and can my landlord evict me if these costs are included in my bankrupcy.

I would rather try and pay the costs so my home is safe and one less worry for me to deal with.

I understand people on here have said nice/encouraging things to me, but from 2001 I have really, really struggled and to me I feel that I should pay these court costs to ease my worry of losing my home. I can clear these costs possibly before end of November and then I may file for bankupcy, any ideas/help?

[Sugarbabe47]

Hi all

Sorry it's been a while, fighting with L/A and bailiffs and deciding wether or not to go bankrupt - well the choice has been made!! I do feel that my L/A and bailiffs have forced me to do this.

 

Update....I applied for a grant from a trust fund for bankrupcy fees with the help of C.A.B and tonight when I got home from work I received a letter stating that I have been granted the full amount!

I can't believe this, especially as I am in mid battle with my L/A (see thread - bailiffs). Maybe these ctax arrears will be wiped out too??

So now I have an appointment set up for 02nd October with C.A.B, to file for bankrupcy. All my close friends have told me to go bankrupt for my health and state of mind...all this is making me feel scared, as my daughter has just left home this last weekend and for the first time in 32 years I am alone, no kids at home, no relative staying with me, it feels weird! I don't feel alone on CAG as you guys are fantastic with the advice and help I have received here. I will keep you informed of my progress and I will be here asking for help along the way, please bear with me as I have researched as much as I can about bankrupcy and still need questions answering.

I asked my landlord if I would lose my home if I went bankrupt and they said no, even though my rent arrears are cleared I have court costs yet to pay (from when my ex did *one* and left me in the doo doo - 2001!)

My employer has told me also that it will not affect my job, which has reassured me.

The only thing I am concerned about is the bank account and my car (I inherited the car from my brother - I found him dead in bed in 2006) The car is only worth a few hundred pounds, but worth more to me. I travel to another town to work so I do need a car, and I travel to 2 sites for my job.

Hopefully things can and will get better from now on.

[phat256]

good luck sugarbabe and congratulation for receiveing the full grant i wish i had it too lol !

your council tax arrear will be wiped off too when you are declalred BR, mine was and i t was very straight forward . i sent my BR order and they told em straight away my arrears have been wiped off ( i had well over 4 K council tax arrear !)

Don;t feel too scared about BR it can give you a big cahnce to start afresh and with no worries about yoru creditor and so on .. the difficult part is too live within your mean and not to rely anymore on overdraft, CC etc.. i at the end of the day u owe money not your life.

[brent100]

Well done Sugarbabe

 

I wouldn't worry about your car or your bank account

 

Bank account - approach Barclays, Co-op or Nationwide as these all do basic bank accounts for undischarged bankrupts

 

Car - the OR will let you keep your car if it is worth less than £2k

 

Go and start your life again....

 

Good luck

 

Brent

[Sugarbabe47]

hi all

OMG....Phoned CAB this morning and also court for the paperwork and I have been booked in for bankrupcy on 12th November - earliest appointment!!! I feel scared now that this is really happening, I can't believe this....I know deep down this is the way to go, but I still feel frightened and worried about the unknown so to speak. I am so grateful for all the help received in here. I am playing the waiting game now, and I am going to study, study bankrupcy and learn as much as I can before the day. I have asked my CAB advisor to attend court with me and he will do.Thank goodness he is as I do not think that I can do this alone.

As a single working person could someone please tell me what my allowances are per month and what I can or can not claim for in my expenditure-I have checked out O/R's technical manual and do not understand it fully. Thanks Sugar x