Bankruptcy Advice

[ardhaven]

I am currently in 18 months into an IVA and have recently lost widowed parents allowance and child benefit amounting to £600 per month. I am in full time employment but I am no longer able to meet the demands of my IVA, mortgage and secured loan. My mortgage provider, Nationwide, has agreed to reduce the monthly amount for 6 months but Picture Loans will not help and after paying only part of the monthly payment due have already started writing to me about arrears and ringing me up. I was not in arrears on either account until then. My mortgage with Nationwide is for £170,000 and my Secured Loan with Picture is £90,000. The house is worth £210,000 leaving me in negative equity. I asked Picture to allow me to sell the house and pay whatever was left after paying Nationwide. The shortfall would then be repaid from my pension lump sum due in 4 yrs. They would not agree.

I am seriously considering bankruptcy as my only option.

 

I need practical advice on what I can do.

Should I change my bank account now before BR as my account is with my mortgage provider - Nationwide.

 

Can I move into rented property then go bankrupt and hand over the keys to Nationwide? Any practical suggestions would be great. Should I stop paying my mortgage/loan to help fund the bankrupty application and rental bond. I have seen a house and have submitted an enquiry but I don't know what to do for the best... HELP!!

Edited November 10, 2009 by ardhaven
Amend text

[Dodgy Geezer]

I am currently in 18 months into an IVA and have recently lost widowed parents allowance and child benefit amounting to £600 per month. I am in full time employment but I am no longer able to meet the demands of my IVA, mortgage and secured loan.

 

Bankruptcy would seem good solution if you are ok with the idea of losing your house.

 

My mortgage provider, Nationwide, has agreed to reduce the monthly amount for 6 months but Picture Loans will not help and after paying only part of the monthly payment due have already started writing to me about arrears and ringing me up.

 

Just ignore them until you have decided what you want to do.

 

 

 

I was not in arrears on either account until then. My mortgage with Nationwide is for £170,000 and my Secured Loan with Picture is £90,000. The house is worth £210,000 leaving me in negative equity. I asked Picture to allow me to sell the house and pay whatever was left after paying Nationwide. The shortfall would then be repaid from my pension lump sum due in 4 yrs.

 

 

If you decide to go the BR route, your pension should be safe

 

 

They would not agree.

Well, thats their problem.

 

 

I am seriously considering bankruptcy as my only option.

 

Read as much as you can.

 

The Insolvency Service Website

 

 

and I need practical advice on what I can do.

Should I change my bank account now before BR as my account is with my mortgage provider - Nationwide.

 

That would be a good idea. NatWest & COOP have a good reputation.

 

 

Can I move into rented property then go bankrupt and hand over the keys to Nationwide? Any practical suggestions would be great. Should I stop paying my mortgage/loan to help fund the bankrupty application and rental bond. I have seen a house and have submitted an enquiry but I don't know what to do for the best... HELP!!

 

Yes. If you decide on BR, you will need ever penny.

 

Do keep asking any qestions you are not sure about.

 

Best Wishes.

[ardhaven]

Many thanks for your reply and excellent advice.

I am also wondering whether its best to wait until I get a formal repossession threat from Picture and a court hearing date before entering BR. I just want to ensure that they get drawn into the BR.

 

I also read somewhere that all bank accounts will be closed once the BR goes through. Does that mean if I open an account with Co-op now that it will also get closed?

 

Can someone advise me on the practical steps to take in moving into rented before BR and what I do about the mortgaged/secured loan property. i.e. do I hand the keys to Nationwide? I'm not really sure what you do in this situation.

[42man]

I'm sorry to read of your situation AH...just to answer your question on bank accounts, I think you may have to open one up after you get made BR, as the official receiver will want all of your banking details / cheque books / cards at the time of your interview with them....just be aware also that they may add a significant amount of fees (they may have done already).....

[ardhaven]

Thanks for your advice.

 

ind regards

 

ardhaven

[Dodgy Geezer]

You might never get a repo threat. You decide whether you want to get it "over and done with " or drag it out as long as possible to maximise you funds.

 

Its not true that all accounts are closed automatically, it depends on the bank. However yours will almost certainly be closed. You can open an account instantly on the day of your bankruptcy, so this is the least of your worries.

 

The process now is simple. Its the heart rendering that you have to deal with.

 

Whether you go BR before or after repo, it dosent matter. ALL debts will be included at the time of BR. You will be unlikely to get an early discharge until the sale of your property. This is not an issue.

[Dodgy Geezer]

Just so you understand the bit about including the house in the bankruptcy.

 

You can either apply now with debts of £260,000 + or later with debts of £50,000 + after the sale.

[ardhaven]

Thanks again for your advice..its invaluable!

I wanted to sell the house but Picture won't allow it. So I guess I am stuck with the first option of debts of £260,000 + unless there is a way round Picture blocking the sale because of their second charge on the property.

I have spoken to my IVA administrator and he thought it best for picture to lay their cards on the table and threaten repossession before registering for bankruptcy.

I have a rented property lined up for 6th Jan 2010 so I was thinking of filing in early December. I am told that it can take 6-8 weeks to get a hearing date so it should all tie in nicely.

I understand the 'heart rendering' side but as long as Nationwide get their money back I will be happy. With Picture's attitude I won't lose sleep over them!

 

Kind regards

 

Ardhaven

[ardhaven]

I will keep a diary going on this thread so I can keep you posted on what happens to me. I hope this will help others in a similar situation.

Any more practical ideas will be great

 

Thanks

[Dodgy Geezer]

If you have decided that this is your best way forward, then i would stop paying everybody with immediate effect.

 

Mortgage, loan, council tax, gas, lecky,

 

You will need all your money for your move on the 6th Jan.

 

You will get a bit of grief, but so what, if you go BR, then you might as well go BR for an extra couple of quid.

[ardhaven]

That's great advice thanks.

Does anyone know what I should do about the house when I move into rented. Do I hand the keys to the OR or to Nationwide. I want to be able to move switch everything off and start fresh in the new rented house. If I don't pay the utilities won't I have problems getting sorted when I move

 

Many thanks again

 

Ardhaven

[bertbass666]

You can't include council tax in BR. Sorry. Other than that BR is the way to go.

You will be made BR at your old address as well so your new rented address will be clean when the 3 years of BR are up and you emerge with a clean credit history.

[bertbass666]

When I was made BR during the last recession in the 90s, thanks Maggie, I had already moved as I was going through a divorce as well and I just let things run there course. The house was reprocessed and my ex got the council house that she always wanted. The official receiver did the rest. I just had to give him a list of my creditors

[bertbass666]

I would suggest that you keep the utility bills up to date and when you move out just move the accounts to your new address that way you shouldn't have too many problems.

[Dodgy Geezer]

You can't include council tax in BR. Sorry.

 

Incorrect. All council tax arrears can be included in the BR.

 

I would suggest that you keep the utility bills up to date and when you move out just move the accounts to your new address that way you shouldn't have too many problems.

 

You wont have too many problems if you dont pay them either. I had £1k included to Scottish Power. And im still with them.

 

Again your information is misguided.

 

Bankruptcy does not last 3 years anymore. If your case is simple, then it could be as little as 6 months.

 

You credit will remain tarnished with the bankruptcy for 6 or 7 years. I cant remember which, but that's not important.

[Dodgy Geezer]

Does anyone know what I should do about the house when I move into rented. Do I hand the keys to the OR or to Nationwide.

 

If this is your decision, then hand them back to Nationwide.

Be VERY CAREFUL about signing anything afterwards.

They will want you to sign all sorts of things including promise of payment of any shortfall after the sale.

After BR it wont matter what you owe them.

I say this because you might not go BR after all.

 

I want to be able to move, switch everything off and start fresh in the new rented house. If I don't pay the utilities won't I have problems getting sorted when I move

 

Of course if you can afford them, then do, it will make life a little easier.

 

And dont forget to advise your supplier in plenty of time. And dont forget to take meter readings, old and new.

[Dodgy Geezer]

Removed.

Edited November 11, 2009 by Dodgy Geezer
Stupid lappy duplicated post.

[bertbass666]

Sorry for the misleading info but that's what happened to me. Made bankrupt but still had to pay the council tax bill. Thinking about it, I suppose it was nearly 20 years ago. That's frightening, it doesn't seem that long.

[Dodgy Geezer]

Sorry for the misleading info but that's what happened to me. Made bankrupt but still had to pay the council tax bill. Thinking about it, I suppose it was nearly 20 years ago. That's frightening, it doesn't seem that long.

 

Welcome my friend. All advice is welcome, however even bankruptcy moves with the times.

 

I hope things went well for you.

[bertbass666]

Thanks. Although I dreaded it at the time it was the best thing that could of happened. The ex didn't get the house, yes revenge is sweet, and all my debts were wiped out. My only regret was losing my car.

 

The official receiver said that they were going to take it so I just left it by the roadside for them to take. When the MOT and Tax ran out I phoned them and they said that they didn't want it after all as it was not worth more than £1000 by which time it was rather worse for wear and I couldn't afford to get it sorted out. It was a TR7. Lovely car!

[ardhaven]

Once again my thanks to everyone, in particular 'Dodgy Geezer' for your very sound advice. BR is the route for me and I am much clearer in my mind about how to approach it. THANK YOU!!

I have made a contribution to to CAG. I will keep you posted on how I get on.

Kind Regards

Ardhaven

[babybear39]

Welcome to the BR club

 

I instantly felt better after the court hearing and chat with my IP.

 

Everything was done and dusted wiping £25,000 in just under 8 months and it only took that long because they were short staffed

 

One very important piece of advice is for to take out enough cash to live on for a few weeks as even though the OR may have no interest in them, the banks still close them as a matter of course. This happened to me with Barclays but funds were returned with 2 weeks as the cash was benefits and student finance.

[ardhaven]

Just thought I would post an update on my situation. I rang York County Court on Tuesday and I was able to name my hearing date for 8th January.This ties in nicely with my move into rented on the 6th January. I already feel better by just making my decision to go the BR route although it is a very daunting step to make. I will let you all know how I get on. Many thanks for all your advice so far.

Kind regards

Ardhaven

[Dodgy Geezer]

Hi.

 

Im glad you are feling better about things.

Yes Bankruptcy can be very daunting, but also very liberating. You owe it to yourself to be free from the misery of debt.

My BR ends today 19 Nov, and although it wasnt my choice to go BR, im still standing.;)

 

I have some very happy childhood memories of York. My grandparents lived in a place called Dringhouses, opposite the race course.

 

Best Wishes.

Edited November 19, 2009 by Dodgy Geezer
spelling

[ardhaven]

Hi and congratulations on reaching the end of your BR. I have spent some time read others experience and you have been a tremendous voice of support and reason throughout. Many thanks for helping me!

I am daunted and my biggest concern is not the hearing but making the right choice about my home. Do I hand the keys over when I move and seek a voluntary repo or leave it all to the OR? It's a difficult one!

Anyway all the very best

Kind regards

Ardhaven