Think bankruptcy is only answer !!

[head out of the sand]

Hi all,

 

Have posted on a few of the other sections and had some helpful advice although could really do with some more here please.

 

Situation is as follows :

 

Had an unexpected baby in August 2008 (thought I could not have kids as per doctors advice previously) after partner left a well paid job in March through his own accord, but after irreconcilable differences with bosses.

 

I stopped work and got made redundant whilst on maternity (Oct 09). Partner could not get any state benefits as he left his job voluntarily. We were refused working family tax credits as he earnt too much in the 08-09 tax year.

 

We then missed lots of mortgage payments and run up unsecured credit robbing peter to pay Paul.

 

We staved off repossession in December and January and rebalanced the agreements we owed the companies, although now we are on the bread line and never going to be clear.

 

I am working around looking after the baby - £500 a month earnings max and partner is earning here and where he can as finiding a permanent job has been tough.

 

Property worth - £180k

Mortgage of £100k and secured loan of £100k so £20k secured shortfall.

 

Unsecured debt of around £50k at varying stages of CCJ's etc. so credit is hugely impaired already.

 

We are expected to leave our home one way or another and we have a potential place we could rent from a friend in the short term, privately this would save us thousands per month due to the credit charges...

 

We are hugely embarrassed by the whole situation and would die if friends/family were to ever find out but are there any other considerations we have not thought of.

 

We have no savings or luxurious assets.

We realise that we cannot run our own company.

Wages we receive will pretty much cover living expenses and that is it.

 

Any advice is gratefully received.

[rippedoff15]

Hi, sorry to here of the issues, but we had the same to much debts and no pay to repay following the ending of my business, we had the following

 

house value £160k with mortgage of £170k loans totaling another 85k and more even personal guanrantee of £775k so i filed for BR in Feb 09 and have not looked back since.

 

all our debts have now gone, yes the house as well we waited until the had the house taken thus the local council are helping with our rent, we arranged a rented hosue 4 weeks before from a letting agent ( stoped paying the mortgage and paid the rent up front.

 

now life is far better

 

cheers

[head out of the sand]

Thanks Ripped off, makes us feel a whole lot better.

 

Any chance you could give a bit of detail around your experience with the receiver as we have a private rented place, although from a family friend so a bit cheaper and not sure how this would look.

 

Thanks for any time spent.

[rippedoff15]

Hi, After we spent months thinking of fileing for BR we used the web site www.insolvency.gov.uk by accessing the web page Do it online you can fill in all the information needed for the court its very easy, you can start and keep added the information until you are 100% ready it ask`s for information such as wage to creditors. once we completed the information which took me over 3 mths but we could have done it far sooner we submitted it on line then printed off 4 sets.

 

Now we were ready for court so we called my local country court and asked for the BR department yes they have there own office it was painless. they gave me a date within 3 weeks as they are very busy, on the day we paid the fee`s which was £150 court fee which we did not pay as on benefit and the OR fee which was £345. 10 min later went doen stairs to meet the judge.

 

Well this was a hugh shock the lady judge was great 100% understanding were i was their and even said it made her happy that by isuing the BR would make my life better it took 10 mins. We went back upstairs for the next stage which was to speak to the receiver again greta and relaxed.t took 5 mins and they set a date for the main telephone interview.

 

2 weeks later the OR called for the telephone interview which took 45 mins but i must say they were ok even happy to help, becuase we did the forms online they already had a complete copy so this took less time they cross checked the debts etc, we regard to our house as it was in joint names and on funds within it the OR was not looking to sell it so they left it as is, we have rented a house now and the OR is happy about this and asked no questions.

 

Afetr the telepohne call the OR will write to all your creditors informing them you are now BR and any questions must be sent direct to them including letters again painless, i was made BR in Feb 09 and the OR has now wrote to my creditors informing them they willing br issuing an early discharge by the end of July 09 making my BR 6mths.

 

Since the bR was issued my lifeis much much better and sometimes i wished that i was ot taken ill whicn meant my business closed but now iam looking forward to starting a new job, i have just passed my LGV test which is a complete charge of job from my last but being happy is far better than chasing the money etc

 

hope all is well

 

Cheers

[loobyloo85]

Hi head out of the sand,

 

Bankruptcy is an option available to you, with you considering leaving your property, having no assets of a high value, and you wanting your debts cleared as quick as possible. However, you mention that you do not want family/friends to find out about bankruptcy, but it is issued in your local newspaper and it is also held on the government register.

You could sell your property and move into the rented accomodation available to you at the moment (even if it is for a few months, as during this time, you can too look into a rented accomodation for yourselves). This way, as you say this will free up a lot of your disposable income. When you have done this, you will have more disposable income to pay to your creditors. Although there will be a £20K shortfall from the property, based on values at the moment, there are then options such as a debt management plan or an IVA where you could clear your debts by making a monthly payment. These options are a lot more private, employment and assets would be safe.

 

Best wishes

[Tawnyowl]

Hi head out of the sand-subbing to your thread.Much to say,will reply tonight,as off to work while its still there,unless thunderstorm strikes and i will reply earlier as i work outside.But please never feel embarrassed or ashamed of the possibilitys of going bankrupt.You probably would be surprised at how many of your friends or even family members are struggling.Hold your head up high,remember the saying-its better to try and fail than not to try at all.see you later i hope.Tawnyowl.

[Tawnyowl]

First of all congratulations on your baby.Some of the links i will put on you may allready know about,but may help others.Am i correct that you were made redundant while on maternity leave,if so i hope all the corrrect procedures were followed-link-

 

During your maternity leave

 

While you are away on maternity leave your employment terms are protected. This includes your pension contributions and holiday entitlement, along with extra rights if you are made redundant. Your employer is also entitled to make reasonable contact with you about specific work issues.

 

Your employment terms and conditions

 

If your baby was due on or after 5 October 2008, you keep your normal employment rights and benefits (apart from wages) throughout your ordinary and additional maternity leave. This might include any access to a company car or mobile phone that you have as part of your employment contract. Some contractual benefits which are provided for business use only can be suspended during your ordinary and additional maternity leave. Again this could be a mobile phone or access to a pool car.

For babies that were due before 5 October 2008, some of your contractual rights and benefits can be suspended during any additional maternity leave. Your statutory employment rights will continue.

 

Pension contributions

 

If your employer contributes to an occupational pension scheme, they must carry on making their usual contributions:

 

• for the whole time you are on ordinary maternity leave
  
• or for any time you are receiving any Statutory Maternity Pay or contractual maternity pay
  

If you normally make contributions to your pension you should carry on doing so, based on the amount of maternity pay that you are getting.

 

Holiday entitlement

 

If your baby was due on or after 5 October 2008 you will build up all your entitlements to paid holiday throughout your ordinary and additional maternity leave. This is even if your contract says you are entitled to more than the statutory minimum.

You can add holiday to the beginning or end of your maternity leave. You may not be able to carry over untaken holiday entitlement if your maternity leave goes over two holiday years, so it's often best to take this at the beginning of your leave.

For babies born before 5 October 2008 you can still build up your contractual holiday entitlement during your ordinary maternity leave. During any additional maternity leave you can only build up your statutory minimum holiday entitlement.

 

Redundancy

 

It is automatically unfair and automatic sex discrimination for your employer to select you for redundancy for a reason connected with:

 

• maternity leave
  
• birth or pregnancy
  
• paternity leave
  
• parental or dependants leave
  

Your employer can make you redundant while you are on maternity leave if they can fairly justify their choice. For example, if your employer is closing a section of their business that you normally work in and making all employees in that section redundant, your employer can make you redundant as well. However, if your employer needed to make staff cuts across the company, they cannot make you redundant because you are on or about to go on maternity leave.

If you are made redundant whilst on maternity leave then you have special rights. Even if you do not have the normal two years service, you have the right to be offered any suitable alternative job in the company. This is even if there are other employees that might be more suitable for the job. If you are offered a new job, then you are still entitled to the four-week trial period, which should start when you return from maternity leave.

 

If you are made redundant during your maternity leave your employer must give you a written statement explaining their reasons for the decision. You should also receive your normal notice period or pay in lieu of notice and redundancy payment, if you are entitled to receive them.

 

You were turned down for tax credits due to your partners income in previous year,and state benefits-Link- Start Calculation --You then ran up unsecured debt -robbing Peter to pay Paul,many have done this when facing troubles.Your house has minimum shortfall of 20k and 50k of debts at CCJ stage,have you taken free advice 2 links here-http://www.cccs.co.uk/contact/contact.aspx Free Debt Management Plans, Free IVA Debt Advice and Free Debt Help | Debt Advice | Payplan Now the CCJ stage,many lenders are doing this now then rushing into charging orders and then going for sale orders,link- Borrowers' homes at risk as lenders demand to secure debt against properties

 

 

 

div#related-article-links p a, div#related-article-links p a:visited { color:#06c; } Debt charities have attacked high street banks for repossessing homes to recover debts of just a few thousand pounds.

Thousands of borrowers struggling to repay credit cards or personal loans are at risk of losing their homes because lenders are increasingly keen to secure debts against a borrower’s property, Citizens Advice warned today. The charity has reported a huge increase in the number of charging orders made against homeowners struggling with unsecured debt.

David Harker of Citizens Advice said: “Some creditors are using the court process as a tactic to intimidate vulnerable debtors into paying unaffordable amounts. The law leaves debtors far too exposed to unfair treatment and the risk of losing their homes.”

A charging order secures a debt against a property, and allows creditors to apply for an “order for sale” to recover the debt by forcing a sale of the property. It means borrowers could lose their homes over potentially very small sums of money.

Related Links

 

 

 

• What to do if a lender gets tough
  

 

• Beware of the debt traps
  

 

 

 

Since 2000 there has been a 722 per cent increase in the number of charging order applications, according to the Ministry of Justice. Around 74 per cent of the 132,000 applications made in 2007 were agreed by the courts.

The law currently states that creditors can only apply for a charging order if the borrower has a county court judgment (CCJ) and has been ordered to settle the entire debt and has not paid, or the borrower has been ordered to pay in installments and has missed a payment.

However, Mr. Harker said: “We are now seeing cases that suggest charging orders are being granted even when these circumstances do not apply. Both creditors and judges are working round existing legal safeguards for debtors.”

Lenders frequently initiate court action even if a borrower has arranged a debt repayment plan with a charity such as Citizens Advice, whereby a borrower arranges to make smaller, more affordable monthly repayments. Around 600,000 borrowers are now in debt repayment plans, according to Credit Action, the charity.

Chris Jary of Action for Debt, a debt advisor, said: “Charging orders are now very common and in some cases this will lead to an order of sale. A client from Bradford recently had an order for sale on his house to recover an unsecured loan debt of £12,000. Some orders for sale have been made for debts as little as £4,000.

“It seems particularly iniquitous given that nowhere on the paperwork of a personal loan or credit card does it normally say your house will be repossessed if you do not keep up repayments.”

Many orders for sale are also made by debt purchase companies, who buy default credit accounts from banks and finance companies. Mr Harker said: “These companies are looking to maximise returns and may not be restrained by the same reputational concerns as some high street lenders.”

The Government has already announced a number of schemes to help homeowners struggling with mortgage payments to avoid repossession, including the Homeowner Mortgage Support Scheme, which allows households to defer interest payments for up to two years. However, no extra protection has been offered for homeowners struggling with unsecured debt.

“A number of changes are needed to enforcement legislation to ensure that charging orders and orders for sale become a last resort,” said Mr Harker.

 

 

You are expecting to leave your home sooner or later,through sale or repossession.If repossessed,shortfall will be covered if going bankrupt-link- http://www.insolvency.gov.uk/ as will other debts. After or when you know you are going to be repossessed,which may take a few months,good time to move to flat and start your new life away from all the stress and worry with your family.It sounds like you are seriously considering this option,please take advice before doing anything,my view only,wishing you and your family all the best ,keep posting,Tawnyowl.

Edited July 7, 2009 by tawnyowl