bankruptcy advice??

[inovermyhead2]

Hi I am new to this site and would appreciate some advice. Particularily about bankruptcy in scotland as I know its slightly diff from rest of UK.

 

I currently owe about 25k to various c/cards and 1 unsecured loan. I am a single mother and work part time with a top up of tax credits. I recently approached a reputable trust deed firm to apply for this but after going through all the details it became apparent i am not in a position to meet the minimum payments needed for TD so I was advised that applying for low income low asset bankruptcy would prob be best for me.

Now here is my problem, I currently still jointly own my old house with my ex although I take nothing to do with the mortgage payments. (I now live in rented accom) The house has been up for sale for a few months to no avail, no equity on it at all. Prob be sold at a loss. anyway my ex has applied to buy me out but cant without a large deposit, which he doesnt have. He is however currently looking into getting a deposit from his dad for this.

So problem is, I cant apply for LILA bankruptcy until I no longer own the house, even though there is no capital. Meanwhile my credit card companies and loan company are chasing me for payments that I cant make.

I feel like I am at a dead end and am worried that the action my debtors will take may involve me having to attend court etc.

 

Any advice appreciated as I am at my wits end!! How long before these banks force me into bankruptcy anyway? Will I have to attend court??

[IdaInFife]

hiya,

 

just to let you know even if you were to be bought out then this would also be looked at under BK unless a resonable amount of time has passed (at least 3 minths)

 

can you list your creditors?

 

oringla creditor/ if its been passed to a dca / what it is for (cc or loan) approx amount / how old it is/ any regular payments you are making now

 

i know this seems abit intrusive but give us better insight

 

ida x

[IdaInFife]

just to let you knw

 

i know you posted in 2 different forums but have sorted that so you will only have 1 thread which is here now

 

ida x

[inovermyhead2]

Thats Ida, I only realised after I had posted in the other forum and didnt know how to move it.

 

The ideal situ would be for the house to be sold but that is looking increasingly unlikely. The house has valued at 87500, current mortagge outstanding is 86000. It is unlikely we will get 87500 if it sells.

If my ex buys me out, I will not be gaining any money from this and as there is no equity on the property I didnt realise this would be a problem?

 

My debts are spread between a few companies : credit cards - sainsburysbank, lloyds tsb, capital one and debenhams, loan - tesco finance, an account with next, and an overdraft with lloyds tsb. I had been making full payments on all the debts until sept, but was using the c/cards to live, robbing peter to pay paul.

 

The sainsburys and lloyds cards I have had for years, capital one about 2 years, debenhams - 1 year, and had been paying the loan for a full year. average debt is between 4 - 5k each.

 

I am currently making no payments and obviously no longer using the cards. I had looked into a trustdeed but as advised I could not afford the payments and would most likely end up bankrupt anyway.

 

 

Like I said, my main worry at the moment is my creditors taking me to court or filing for my bankruptcy before I can approach it myself.

[IdaInFife]

it's a tricky one with you still having 'interest' in the house

 

 

you could write to all your creditors making reduced payments

 

letter b

 

http://www.consumeractiongroup.co.uk/forum/general-debt-issues/20758-creditors-dcas-letter-templates.html

 

 

is there any charges or PPi that you can reclaim?

 

ida x

[inovermyhead2]

No there are no ppi and the charges are mounting up now as I am not paying.

Are they likely to accept token payments to the debt or is it a waste of time. In doing this will it help me case with them and deter them from pushing me into bankruptcy? It really is a mine field out there. Do you know the average timescales for which they would take me to court file for my bankruptcy etc.

 

When my income and expendature was worked out with the TD advisor, I had no disposable income at the end of the month after all necessary bills like rent, childcare, electric/gas etc and food. What kind of amounts should I approach them with to pay??

[IdaInFife]

first of all they would have to tkae you to court and be granted a decree in whch the court would decide how much you need to pay and only then if this is not maintained then they can file for BK so it can be a long way off

 

If you are seriously wanting to try and get something sorted this is what I would do.

 

credit cards/loan/next

 

I would send them a cca request to start with. Link in my signature. You need to include a £1 po in each and send recorded . With limited monies you may need to spread over a few weeks o you can afford it and alos inlcude a letter with offer of payments of £1 per month ( you do not need to give them a income and expenditure sheet to show you have no availabe funds but i personally if want them to try and accept it then I would)

 

and depending on theor response you can then go on to reclaim back and charges to reduce the amount

 

overdraft:

I would send a sar. link also in my sig. you need to inlcude a £10 postal order and send recorded. This should get you details of all unfair charges added to the account that you can reclaim back to reduce the amoutn owe as well and also add a letter of offer of pament of £1per month

 

you could also contact national debtline scotland 0808 808 4000

 

National Debtline Scotland – Free Debt Advice & Debt Management Tools

 

 

but as you have no monies at the end of each month your options are limited for dmps and das.

 

also ask national debltine what would happen under LILA regarding the house as they might have better advice

 

Ida x

[inovermyhead2]

Thanks Ida.

 

Do you think this will stall them for a while so that I can apply for LILA bankruptcy when I am no longer associated to my old address, is it best to leave it for more than 3 months after my name is removed??

 

Due to the low amount I have left each month, I dont think debt plans or das would be helpful as I would still be paying it off when I am a pensioner. Will setting up a plan to pay my credtors hinder my chance of bankruptcy in any way??

 

Probably realistically looking at another 6 months before I can apply for my own bankruptcy, is it likely that one of my creditors would have taken me to court by then? Is there a rough timescale for this action??

[IdaInFife]

unfortunalty i can't say how long it will take as it depends on how they want to play it.

[Joemcm35]

Just to let you know that if a creditor where to take you to court to obtain a sheriff court decree (court order), they would then have to serve a Charge for Payment before they could carry out enforcment or pursue bankruptcy.

 

After 14 days from the date of charge (the 15th day), you are deemed to be 'apparently insolvent' and you can apply for your bankrputcy (no requirement for LILA).

 

Alternatively, to save tha £100 application fee you can wait to see whether the creditor is going to petition for your bankruptcy.

 

Either way, the effects of bankruptcy are the exact same.

 

Check the Accountant in Bankrputcy (which is a Scottish Government agency) Debtors Guide http://www.aib.gov.uk/guidance/publications/debtbankruptcy/bankruptcypostapril08/poyo

 

You state that there is not any equity in the property. However, please check that you do not have any other assets which could be lost by bankrputcy (ie a car valued in excess of £1,000).

 

Given your circumstances, you have nothing to fear from the creditors.

Edited October 28, 2009 by Joemcm35

[inovermyhead2]

Thanks for your reply Joemcm

I appreciate your advice. My ex partner is currently trying to source a deposit so he is in a postion to buy me out as the mortgage lender will not remove my name from the mortgage without this. Even though my ex told them of my situaton.

When the house was valued recently it valued at £90,000, however this was due to my ex negotiating this with the surveyor as he hoped it would help it sell for more (they originally said 87500)

Current outstanding mortgage is 86000, but house isnt selling so my ex is thinking of renting it out.

My question is, once I am bought out (which I understand needs the invlovement of a solicitor) and am made bankrupt will the OR question this transaction?

He is not bying me out due to me filing for bankruptcy but due to our break up and that I now have my own rented accommodtion. Please note I am not expecting any financial settlement from my ex as even though the house valued at 90000, it isnt selling so is like an albatross (sp?) round our necks. He is only looking to rent it out as a last resort!!!

[Joemcm35]

The Accountant in Bankruptcy (AiB) will only question the transfer of property if you were to receive less than your realistic share of the equity - going by your sums that would be £2,000 less your share of any legal costs.

 

If you were to become bankrupt (on the grounds of apparent insolvency) before the house was sold then your ex partrner would have to deal with the AiB as they would in effect own your share of the equity and they would negotiate settlement with your ex partner.

 

Regarding bankruptcy you do not have to appear in court as the application is submitted to the AiB along with the £100 fee. The AiB will subsequently make contact to clarify any financial issues (including the completion of a financial report).

 

It may be preferable for you to discuss matters face to face with a money advisor at CAB or local council. Check the following link to find a local money advisor:

http://www.moneyadvicescotland.org.uk/debtadvice/find_agency.php

Edited October 29, 2009 by Joemcm35

[inovermyhead2]

Hi there

Just revisiting this, with an update. My ex has been unsuccessful in buying me out of the mortgage and it is clearly not selling. He is thinking of letting the property out as a last resort. Where does this leave me with my impending bankruptcy?? would the AIB value the property themselves and work out whether they would want to sell it etc?? Would they see me as having income from the rental of the property even though I am taking nothing to do with it?

[IdaInFife]

Once you have gone bankrupt, any property which you own including your home transfers to the trustee. This gives them an interest in the property which may allow them to sell it.

If you own your own home, it may be sold, depending on whether it has any value or 'equity' in it.

If your spouse lives in the family home, he or she must consent to allow the sale. If one of your children lives in the family home, you must give your consent. If consent is withheld, the trustee has to apply to the sheriff court for an order allowing sale. The court can either:

grant the order (possibly with conditions);

refuse it; or

postpone granting an order for up to 12 months to allow you and your family to find somewhere else to live.

In the case of jointly-owned property, the trustee is only entitled to the bankrupt's share of the equity in the property. It may be possible for any joint owner or family and friends to make an offer to buy out your share of the equity.

 

 

although you say you have nothing to do with it I'm afraid you have. you have an interest in it and when you go thru BK then that interst is transferred to your trustee who will always work on the basis that they will get the maximum out your share of the house

 

ida x

[inovermyhead2]

Hi there

 

Me again, just struggling with what to do next??

As I am still a joint owner of my old house I cannot file for LILA bankruptcy and am currently in limboland waiting for one of my creditors to file for my bankruptcy. Can you tell me what the likelyhood is of this happening.

 

I am also worried that one of them will arrest my wages or bank account. Where do I stand if this happens? As I am a sinlge mum on a low income as it is.

 

I just dont know what to do next, should I write to all companies offering token payments?? There are at least 2 companies who I could try asking for my cca.

 

I am really starting to lose sleep over this now and just want an end in sight. Its unlikely I will be able to get off the mortgage in the near future as my ex cant buy me out and the house isnt selling. Is there any other way of filing for your own bankruptcy?

[IdaInFife]

How do I go bankrupt?

 

In order to petition for your own bankruptcy you must:

• have debts of over £1,500; and
  
• live in Scotland, or have lived in Scotland sometime during the last year; and
  
• not have been sequestrated in the last five years.
  

In addition, you must also satisfy one of the following qualifying conditions:

• be eligible under the low income low asset rules (see 'what are 'low income low asset' bankruptcies?' below; or
  
• have the agreement of at least one of your creditors to you going bankrupt (see 'What is creditor concurrence?' below; or
  
• have at least one creditor who has got a court ruling that you owe them the money.
  

National Debtline Scotland | Debt Advice | Factsheet 01 Bankruptcy

 

 

yes you can ask for cca , are there any charges or ppi that can be claimed back to help reduce the maounts?

[Joemcm35]

Before any creditor can attempt to arrest your wages they must:

• have a sheriff court decree (a court order);
  
• they must have served a Charge for Payment; and
  
• the 14 days of charge have expired (in other words 14 days have elapsed from the date that the charge for payment was served.
  

If you were served with a Charge for Payment (COP) then the earliest that you could apply for your bankruptcy would be on the 15th day from the date that the COP was served.

 

If your situation is such that you desire to go down the bankruptcy route then there is no point pursuing either the CCA option or the token payment option.

 

Before taking legal action most creditors will assess whether it would be to their advantage doing so as they have to pay the court costs up front.

 

You should never tell your creditors that you are planning to go bankrupt due to your situation as that will more than likely deter them from taking legal action.

 

I can understand that you are frustrated with the situation but do not lose sleep over this or start making payments that you can ill afford to pay.

 

Best wishes,

 

Joe.

Edited December 6, 2009 by Joemcm35
Spelling mistake

[inovermyhead2]

Thank you very much for your replys.

So it is just a waiting game then?? In the meantime my mobile phone goes constantly but if I dont know the number, I dont answer!! I am now getting messages from a DCA quite often, not quite sure which one of my creditors have passed my details over. If anyone comes to my door, should I just tell them to go away?

[Joemcm35]

Yes it is very much a waiting game!

 

As for the phone calls - the simplest solution is to change your number to an ex-directory number which you would only give to family & friends. If you have a contract mobile phone - contact the provider and request a new number and ensure that it is unlisted (ex-directory). If it is a pre pay sim card just get another sim card!

 

Should a debt collector or credit company rep come to your door you can simply state that you do not wish to discuss the matter and they must leave your doorstep - they don't have any more rights than a door to door sales rep!

 

If a sheriff officer were to visit you to serve a summons or charge for payment - they will simply serve the documents (if you are out they will deposit the documents through your letter box).

 

Stay cool and relax!

[goldielocks]

Hi,

I'm new to the site and just came across your situation. My advice would be to wait and see what action your creditors take. It is very likely 1 of your creditors will raise a court action against you however when this happens do not panic!

[inovermyhead2]

Thanks joe and goldielocks

 

I am trying not to worry about it but its so hard. I was always such a good payer and was proud of my good credit score, hence the reason I ended up with so much debt.

 

Being 38 weeks pregnant doesnt help either lol!!

 

I am hoping one of them does take court action against me so i can get the ball rolling with the bankruptcy, the sooner it starts the sooner its over eh?

 

It looks like at least 2 of them have past the details ointo DCAs, will they then take legal action too??

 

Joe , Im defo going to get onto my mobile phone company re changing ym number as its not going to go away and the DCAs are more aggresove than the original companies. Also, can any of them arrest my bank account without court action, just terrified I will be left with nothing.

 

And lastly, should one of them take court action, what should I do? Who do I contact to be made apparently insolvent??

 

 

Your advice in invaluable in helping me sleep better at night

[inovermyhead2]

Hi all.

Looking for some more advice, re visiting this as I have been patiently waiting on one of my creditors taking action against me.

 

Well today I have received a citation for one of my debts, just wondering if this means I can now apply for my own bankruptcy as aparently insolvant or do I still need to wait for further action?

 

Thanks x

[Joemcm35]

You are not deemed to be 'apparently insolvent' until after:

(1) the creditor has been granted a sheriff court decree (court order);

(2)the creditor has served a Charge for Payment;

(3) 14 days from the date of charge (the 15th day), you are deemed to be 'apparently insolvent' and you can apply for your bankrputcy.

 

Hope this answers your question.

 

Best of luck.

[inovermyhead2]

Thanks Joe

With regards to my citation, do I do nothing? And in doing so, will my creditor get their decree.

Is it a normal process for a charge for payment to follow a decree??

 

Thanks

[Joemcm35]

You don't have to do anything as the court will grant the creditor a 'decree in absence' - that means a decree is granted without any response from the defender.

 

It is the normal process for a creditor to serve a 'Charge for Payment' if they wish to enforce a decree. However, it has been known for a creditor to obtain a decree but not to attempt any enforcement and as a consequence they do not serve a charge for payment.

 

But don't worry, as there will be a new route into bankruptcy called 'Certificate for Sequestration' which will be introduced by the Scottish Government in October 2010.

 

My advice is to be patient and keep in touch.