Considering BR, need some help to some specific Q's

[xjr264]

Hi there,

I’ve read with interest a lot of excellent advice posted on this forum by well-informed and sympathetic posters and now would like to seek some advice around my own situation. I don’t want to give you guy’s war and peace but rather ask for some advice around specific aspects of bankruptcy, which I am now considering as a method of dealing with the debt burden I’ve managed to accrue. The background to this is that for the last 10 years I’ve been an IT contractor and have enjoyed a high income and a good lifestyle but didn’t keep my eye on the ball, I make no excuses, but I did always meet my repayments and ensure all creditors were paid.

However, I have accrued a high-level of personal debt, and I currently owe 65K made up of personal loans, credit card debts and unpaid self-assessment. I lost my last contract in July last year and have been unsuccessful despite a number of interviews in finding a new contract. Additionally I have separated from my wife, who has the mortgage in her name on the house and as she paid off a 50K second charge when she remortgaged about 20 months ago, which was entirely down to me, I have effectively had my ‘equity’ out of the house and she now owns it. I did seek advice around the house and was told by a solicitor who specialises in insolvency that provided we can prove the second charge was down to me, I effectively have no equity in the house and the OR would not be coming after it as effectively it’s my wife’s house.

The questions I have are as follows:

1. I sold my car and motorbike in September / October last year and used the proceeds to put down a deposit on a rented flat and buy some furniture, TV etc as I took nothing from the house. What was left over I used to live on. Both the bike and car had finance which I settled from the sales; however I sold the car to my wife as she needed a car, I do not have use of it. The car was sold for the market value. Will the OR look at this transaction as suspicious?

2. The bike was sold to a private individual, there was about 4k difference which is what I used to furnish my flat, I have kept the receipts in case the OR wants to see what I spent the cash on, 4K is actually not a lot when you’ve got to furnish a place from scratch, so nothing is particularly ground, and certainly nothing is individually worth over £500. What would be the view of OR over this?

3. I am currently a director of my own ltd company, however this is in the process of being struck off due to non-filing, basically I don’t have enough money to pay the accountant to do the books, so Companies House are striking the company off. I understand that corporation tax; outstanding VAT, NIC and PAYE and effectively business debts, however there should be a further element of self-assessment. But I have no idea how much this is as no accounts will have been done and the accountant will not be filing my tax return as they no longer act for me? Can I ‘guesstimate’ the SA for the purposes of the BR? I will need to file an online tax return by 31/01 as everyone does, but this is likely to be inaccurate due to the lack of accounts. Any advice on this would be much appreciated.

4. I am not in receipt of any benefits as I’m still a director of a Ltd co, I have been told that I am not eligible to claim benefits as technically I’m still employed, my wife has been giving me about £1500 a month to pay my rent, bills etc in lieu of me taking any possessions from the house? After the rent and bills, I’m left without about £500 a month to live on before food, travel expenses, clothing, the odd pint or 2, mobile phone, internet etc etc. What does the OR view as being ‘excess’ income? I really don’t want a payment order being imposed for 3 years!

5. My wife and I went on holiday in September on a ‘make or break’ trip to try and patch our marriage up, like all such things it went pear shaped, I foolishly took out a couple of pay day loans to cover living costs when I got back, which I fully expected to repay on getting work. I haven’t been able to do this and am very worried about a BRO due to this behaviour; will the OR view this as suspicious behaviour?

6. I have a YBS Cash Transactor account which I use to pay my rent and bills, this is not a bank account but a savings account which allows DD’s and SO’s, I will ensure that there is no money in it prior to BR, but will the OR ‘freeze’ the account?

7. I really don’t want my landlord to find out about the BR, I have heard that if you take a copy of the rental agreement to the OR to prove the amount you’re paying in rent, T & C’s etc., that they may not contact the landlord, does anybody know if this is true? Basically, if the landlord throws me out, I’m homeless! I could go back to my folks (at my age!!) but without transport, job hunting will be impossible. Again, advice greatly appreciated.

[xjr264]

Hi again,

 

I would really appreciate any advise tbh, also does anyone know what the timescale is between online filing and getting a court date?

 

Once again many thanks for your help

[debtinfo]

1. As long as it was sold for the market value it is ok, the OR will be more interested in you showings that the proceeds were spent on essentials only.

 

2. again as long as it was essential there should be no problem, s it was close to the bankruptcy do expect the OR to go into this in some detail

 

3. Yes you can guestimate

 

4. If after you have paid your essential expenditure you have more than £99pm left over the OR will take a percentage as an Income payments agreement

 

5. Probably, but BRO's depend on the scale of the monies used and how material they are to your debts and the bankruptcy

 

6. The OR will not but the bank may

 

7. Its down to the OR, How does he she know that the one you are presenting is the most recent one and hasnt been changed since it was signed? Most landlords will not terminate a tennancy agreement as a good paying tennant is better than an empty property, you cant be certain though.

 

Hope that helps

[debtinfo]

Hi again,

 

I would really appreciate any advise tbh, also does anyone know what the timescale is between online filing and getting a court date?

 

Once again many thanks for your help

 

 

Ring your local court, as soon as the forms are complete ypu gan go to court, some have a turn up service, some you have to book an apointment

[palomino]

In our local county court all you do is make an appointment. There is no 'filing' as such.

You will need to bring all your paperwork to the court in case the judge wants to examine (this doesn't always happen but you need to be prepared for it).

You will also need to prove you have taken advice. This would be in the form of a letter from CAB, National Debtline, a solicitor or similar.

 

Finally you will need to pay the fees in cash. No other form of payment will be accepted. There are two fees : the court fee and the Official Receiver's fee. If you are on benefits or are otherwise destitute then you can apply for exemption from the court fee - see form EX160 on the HMCS website.

[xjr264]

Hello again,

 

Many thanks for all your help,useful information and much appreciated, just a couple more things I wouldn't mind getting some advice on:

 

1. The insolvency service website seems to imply that the forms are 'filed' online, but your advice suggests to the contrary? Am I correct in thinking that you fill in the forms, print them off and phone the court? All the online bit does means that you just don't have to fill them out by hand

 

2. I sought advice from a firm of solicitors linked to my accountants. The advice was 'informal' in that the solicitor didn't charge but gave his opinion. I don't have a letter from them or anything? What other evidence can I offer that I've sought advice? Would it be prudent to go to one of the debt charities and get further advice?

 

Once again many thanks for your help and advice.

[palomino]

2. A solicitor is unlikely to write a letter saying he's given free advice (solicitors are like that). You'll have to pay for the advice I guess. But you could ask...

Even better is to go to your local CAB or ring National Debtline. There might be other places local to you - look up your local phone directory, yellow pages, Thompsons or whatever. Also browse yell.com and other such sites.

[debtinfo]

1. There are two ways to do the forms, download and fill in by hand, or do it online, press submit and then print them off. Either way you need to take copies to the court

[xjr264]

Hello again,

Many thanks for all your advice. I have now had an interview and have managed to secure a new position with a financial company; however they want to perform a credit check which will likely show a large number of defaults at my current address. As my ex-wife has now let me move back into the family home (but not officially, I'm still paying rent on my flat as far as my creditors are concerned, this is my permanent address), I have given the agency my former address.

Interestingly when I checked my credit file using Credit Expert, it didn't show any defaults against my 'old' address, so I'm hopeful that the company that offered me the role won't see the defaults at the flat address, can someone advise?

However, should I be successful and by some miracle get through their checks, I've decided to come to a deal with my creditors and go for a DMP rather than BR. The problem is that some of the creditors have passed the debts across to DCA's, 2 in particular; Mercer's and Mackenzie Hall are threatening me with CCJ's? Does anybody know if this is just an idle threat or how long it will take them to serve papers? I would much rather attempt to repay the debts than go BR as I’ve realised this may have a fairly catastrophic effect trying to obtain contract roles within the financial service sector, which is where my specialism lies. Any advice would greatly appreciated.

I will be earning far far less than I did previously and reckon I will only have some 500 available for debt repayment (my total repayments used to be in the region of 2.5K!!). Also can someone advise on a 'snowball' plan?

Once again, many thanks for your help. Please advise if this would be better posted elsewhere.