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HughJ

Throwing in the towel.... Reposession & bankruptcy?

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Hi

 

I run a small ltd company and a few years ago I was diagnosed with a heart problem which took me offline for over a year and meant i couldnt pay mortgage etc. as I couldnt work.

 

I also have a second charge on my home with Capstone (SPPL) and basicaly i ended up fighting reposession about this time last year. After forcing myself back to work (and no help from the state despite paying 40% tax for 20 years!) I managed to secure a suspended reposession order which i have been paying for over a year.

 

I need to point out that i have other debts of over 60k (unsecured) of which 22k was smacked onto the house via ccj and a charging order (3rd charge).

 

I pay £1500 per month mortgage (including 200 arrears) plus 600 to capstone (second charge) last count I owed 260 to abbey and 60k to capstone. the house has been for sale for nearly 2 years and not a sniff from anyone. (its priced to high but it needs to be to repay the mortgage and second charge)....

 

I have 5 kids and its a large house - obviously we are in major negative equity. But the point being my out goings on the house are over 2k per month... i could rent a simmilar property for 900 per month.....

 

My health is now getting worse and im finding it increasingly difficult to meet the payments as i work less and less. (but i am still meeting the payments). The icing on the cake was a statement from capstone which showed of the 2000 i had paid in that quarter ... only £56.00 (yes fifty six pounds) has come off my debt!

 

Im so tempted to just let them take posession and rent elsewhere (for 1k less per month) - but i guess the shortfall will force capstone into making me (and my wife?) bankrupt?

 

I understand as a bankrupt I cant be a director of a ltd company (my company has no debts by the way) which would mean i couldnt work anyway.... but at least i would be debt and worry free. Heart disease tends to get worse not better and it would be nice to spend some time with my wife and kids (of which the youngest is 6) instead of killing mysself by working all hours 7 days a week to pay a mortgage that is never going to be paid off.

 

At least if i let them take the house and become bankrupt i might be able to try and find my feet and hope my health starts to stabalize under medication?

 

Thoughts please.

 

HughJ

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Hello Hugh J and welcome,

 

Obviously more experienced folk with specific advice will be along (at a more sensible hour) but to start things off.

 

Firstly and I realise easier said than done (I can see similar traits in my own situation) your health needs to be the primary focus - you have children and whilst entirely understandable (and admirable) to be trying to work to keep the plates spinning an early demise will be more costly than even the worst case with repossession and bankruptcy.

 

Initial impression is that you would need a level of specialist advice. As well as the good folks here you need to involve one of the free providers of debt management advice - CCCS, payplan or national debtline. You sound like you would have a level of disposable income so might be worth considering a DMP? This would still take an age to repay but you would get there and potentially could still keep the house? (You need to base your income on sensible working hours if you go this route though). I suspect bankruptcy might be a viable option and although it seems that repossession would follow that with health problems (vunerable) and a number of children I am sure there are rules around your having time to arrange suitable alternate accomodation.

 

The other thing that occurs is could you consider selling your company (or part thereof?). I know nothing about this but you say it is debt free, clearly a going concern - have you a disposable asset here that would help you?

 

Of course you then have the choice of pursuing (if not already) charges (Crapstone first!) and individual accounts to try and at least reduce the balances. Again, plenty of help here (remember they are using the law to pursue you so there is nothing wrong with holding them equally to account!!)

 

Whatever you decide best of luck - but remember health and family first - you need to put yourself in the best possible place to see your grandchildren! :D


MJC 007.5 :cool:

 

Advice or opinions offered by mjc 007.5 are personal, offered in good faith and without prejudice or liability. Your decisions and actions are your own and should you be in any doubt then please seek the opinion of a fully qualified and insured professional

 

:) If you think I have helped you please feel free to click on my scales :)

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Hi MJC007

 

There arent really any assets in my company as it is essentially a consulting business - which whilst it can be quite lucrative - my clients pay for "my expertise" (if there is such a thing!). I have some very big corporate clients and lots of work - the problem being I am on beta blockers and other heart meds that knock me for six and to say i am tired all the time is a huge understatement.

 

Maybe its the smell of burning martyr - but i have a responsibility to provide for my wife and children first. Im working as much as i can and at least i can say i died trying:)

 

I am trying to "condition" my son to eventually take over my business, but hes still only 19 and has a lot to learn and even then, my clients i have known for over 20 years and they are paying for my experience....

 

I have "tried" to do a deal with crapstone - but they just arent interested. I try and point out that if i go bankrupt, the sale of the house will leave next to nothing for them (and as i understand it all loans secured will become unsecured when the house goes as there is nothing to secure them to.

 

Obviously, the other concern is if I do go bankrupt - how long can i not be a director for? is that life? or the duration of the bankruptcy?

 

Half of the unsecured debts have already been sold onto "comedy" collectors, who pester me day in day out but i just cant see a way out. The idea many years ago - was to provide a security blanket for my wife and kids should anything ever happen to me - but im just digging myself into an early grave (im 42 and have heart disease and diabetes) and none of my efforts are doing anything for anyone except abbey and crapstone.

 

the house at one point was worth over 400k - but under the current cimate i would be lucky to get 250k.

 

I know i probably need specialist help - but its a minefield and the the time i do have i spend working, trying to pay these idiots.

 

any pointers - much appreciated

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Hi HughJ

As you can meet your payments, and are looking to take the very serious option of letting repossession occur and then potential bankruptcy, can I urge you to get qualified legal advice about how this will affect your situation, rather than that of just people trying to be helpful on a forum.

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Hi Rorscach

 

I hear what you are saying loud and clear. I came here for advice on where i can find such advice. As opposed to looking for a plumber in yellow pages and taking pot luck as to if they are any good or not a recommendation from someone who has had the same experience is obviously so very helpful

 

There are quite obviously some very well versed individuals on this forum who have had similar situations and im hoping someone can chime in with "i have used x or y" etc.

 

I dont even know where to start! do i need a bankruptcy practitioner? A debt management company? a hairdresser?

 

Whilst yes, at the moment I am managing to meet my repayments, the effect on my health is an unknown except it isnt getting any better!

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Hello Hugh J,

 

You are going to need a level of professional advice as you have some very big decisions in front of you - whilst this may ultimately be a solicitor you should start with any or all of the following - payplan, CCCS or nationaldebtline. Their advice is free - general feedback if you look around the site is very positive (www.cccs.co.uk or www.payplan.com or www.nationaldebtline.co.uk).

 

Now at a laymans level you appear to have three viable options (carrying on as you are particularly with the impact on your health is not one of them). You can go with a DMP - one of the above will run this for you at no charge, and as per my previous post whilst this will take forever you are likely to get clear and probably hold on to the house (BUT you must base your I&E on realistic working hours which it does not sound like you are doing at present). You can go with an IVA - more complex but if all creditors agree (and you stick to it) you usually keep the house (kind of a middle ground between DMP and bankruptcy). Finally, there is bankruptcy - obviously serious and is stressful, likelihood of loosing the home BUT eventually debt gone and can concentrate on health and family. In relation to the question about being a director post bankruptcy my understanding would be this is not for life but I may be wrong.

 

So my two pence worth is start with the three sources I mentioned earlier - tell the various vultures you are seeking advice from them and will likely be working with them to formulate a viable plan (they should back off for a short period whilst you do this).

 

More specific advice from this site - I would think might be worth lookin at any of the site team and following their instructions about asking for advice (usually find instructions in their post signatures - often you can pm with a link to your thread and they will try and help).

 

Best of luck, do not give up and keep posting


MJC 007.5 :cool:

 

Advice or opinions offered by mjc 007.5 are personal, offered in good faith and without prejudice or liability. Your decisions and actions are your own and should you be in any doubt then please seek the opinion of a fully qualified and insured professional

 

:) If you think I have helped you please feel free to click on my scales :)

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Hi Hugh,

 

I'm replying mainly to get your message back up to the top of the forum. I'm probably going to be in a similar position to you soon (repossession and 40k of debts) but fortunately it's just me on my own. With a bit of luck one of the site team might be able to help. As your questions are mostly related to bankruptcy it might be worthwhile checking if there's a forum on here for that and finding out who the moderator is.

 

As mjc said, you need to think of your health first but you have my admiration for trying to keep everything together.

 

I'll qualify all of the following by saying that I have no legal experience, am not legally trained and you should view the advice that I give on that basis. To put that in context, imagine that you'd just stopped somebody in the street at random and asked them what they knew about repossession and bankruptcy :)

 

Best advice I can give is to start contacting the government-funded schemes first. Whereas they're not too keen to provide legal representation unless you're eligible for Legal Aid (by legal representation I mean attending court hearings or writing letters for you) it's their responsibility to give you the best possible advice as to your rights and responsibilities. I don't want to detract from the good work that organisations like the CAB may or may not do (they gave me no help whatsoever, so I'm biased) but if you do arrange to see them make sure they have somebody available with some experience - the CABs are run by volunteers and in some areas these are mostly staffed by little old ladies :) There may also be community lawyers available in your area that might provide a limited form of legal service for you but I'd imagine there might not be very many of these about.

 

I would be careful about petitioning for your own bankruptcy because you will be subjected to (as I understand it) very intensive scrutiny of your finances and possessions, and non-essential possessions can be taken from you for sale. Your bank account(s) will probably be frozen as well - you can open a new one but the number of banks that will provide you with a basic one will be severely limited (a debt counselling service such as Payplan has a list of who provides what). I suspect that getting a business bank a/c would be even more difficult - you'd have to be able to justify it in the context of the work that you're going to be doing, and resign yourself to the fact that things like overdrafts won't be available (not that you might have needed them if you were a one-man-band with few expenses). I don't know what the issues are with regard to the company - it's presumably possible for the company to be transferred to someone else (by way of a change of directorship, perhaps) and you could then work for the company as a consultant. Alternatively, you might be able to create a basic (sole trader) company whereby you're just known as Hugh J. t/a HJ Consultancy Services. This increases your personal liability though so obviously check what this entails before considering this route:

 

http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1073789606

 

There's also the IVA route, but this has earned itself a bit of a bad name because of the conduct of some firms (essentially charging large amounts of money for little service, I believe). Government schemes recommended you approach only licenced practitioners - anyone that you see advertising their services on the telly in commercial breaks during The Jeremy Kyle Show or a soap opera is probably to be avoided!

 

Here are some links to get you started (links 2 and 3 are probably most relevant):

 

What happens when you become bankrupt? : Directgov - Money, tax and benefits

 

Alternatives to bankruptcy

 

What is bankruptcy

 

FAQ 03 - What is involved in going bankrupt?

 

The Directory - Find a legal adviser

 

As you'll be able to see, bankruptcy isn't always the right option and even if C®apstone petition for your bankruptcy then this is still subject to the legal process IE you could argue that another solution is more appropriate.

 

Best of luck!

Edited by transparentspoon
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