I will be filling for bankruptcy soon and have some questions.

[rapterman]

I’m fairly sure that I will soon have to declare myself bankrupt in the next month or so. I have an appoint with the CAB in the next few weeks to go over all of the options and to help me with the bankruptcy if that is agreed that it’s the best course of action.

 

I have a few questions about the process and hope that some of you nice folks will have the answers to!

 

The majority of my creditors are credit cards and loans etc, but I do have a small account with a catalogue, only owe about 300 pounds on it, I’m paying them each month and I would like to keep it running.

Do I have to declare this account and if I don’t could the OR find out about it?

I know it should show up on a credit report, will the OR obtain a copy of my credit report?

What if I could clear the account before I filed? Would I still have to declare any accounts with a zero balance?

 

I understand that my bank account will most likely be closed, this is my biggest worry as I use it to pay for almost everything. Is it best to open a new account before I file for bankruptcy or wait until after? Could the OR find out if I did open another account?

 

I have done some budgeting and if my calculations are correct I will have about 170 pounds surplus.

Does all of this go to my creditors or only a percentage?

How long would I have to keep paying my creditors for?

 

I work for a small company, will I have to notify them of the bankruptcy or will they find out themselves?

 

Last question, the only real asset that I have is a car worth about 1000 pounds, I need it to get to work, is it safe to assume that it will be safe?

 

 

Thanks!

[debtinfo]

You must declare all debts to the OR, no exceptions. They have access to every financial document or file you have ever appeared on if they so wish.

You should not use any of your pre bankruptcy credit facilities even if they are cleared at the bankruptcy date. If a company is willing to lend to you after bankruptcy try and apply for it fairly and squarely.

 

you can open an a ccount before the bankruptcy, you must tell the OR,but if it has no overdraft the OR will usually let you carry on with the account. this is what most people do with a co-op cashminder account, it is specifically for people with financial difficulties.

 

on a £170pm surplus 50% will be paid to the OR, this is for up to 3 years, the OR will adjust it if you have any significant change in circumstances.

 

You only have to tell them if your contract stipulates that you do. will they find out themselves?, depends on how closely they track you.

 

It is not save to assume put the odds are in your favour, do you NEED the vehicle or is it just a convenience

[rapterman]

Thanks for the information.

 

Is the surplus paid directly to the OR?

How is this payment paid? (i.e does it come directly out of my wages or out of my bank?).

 

The car is needed to get to work, I have to travel about 35 miles there and back each day. Public transport is not good, I would need to get three buses and it would cost more than using the car.

What would take 30 minutes in a car would take at least an hour and half by bus.

[debtinfo]

They sound like good reasons to me.

 

The OR employs a company called moonbeever to make the collections they usually just set up a standing order

[gezwee]

I am pretty sure you'll be allowed transport option to the value of £1000.00

 

Have a look on here for further guidance What is bankruptcy

 

In all honesty I would not 'hide' any creditor from the IP as it will come back to bite you later on.

 

Given your position (assuming you own no property), and once you have your CAB meeting to hand, it may prove prudent for you to invite one or all of your creditors to petition for your bankruptcy to save on your costs.

 

Without knowing your full circumstances its difficult for a forum member to fully advise but safe in the knowledge that you have no fear of BR it may also present an option for you to invite creditors to write off any debts.

 

Gez

[mcuth]

on a £170pm surplus 50% will be paid to the OR

 

OT, but I've always wondered how the OR/IS thinks this type of calculation is right - if your surplus is £100pm, then you pay nothing, but if your surplus is £101-199pm, then you're left with less than £100pm....

 

My surplus is £80, so no IPA for me (apart from NT), but just wondered....

 

Cheers

Michael

[rapterman]

Thanks for the information above, this helps make things a bit clearer.

 

If it’s not too much trouble I would like to ask about making up a budget allowance.

Without going into too much detail about my circumstances and boring everyone, I will try and fill you all in about how I got into this position of filling for bankruptcy.

 

I was in a debt management program since 2007, all was going well as I could afford to pay a reasonable amount into the program as I was living at home with my mum.

All of my creditors were reasonably happy and didn’t bother me much.

All the changed late last year when my mum was told she had cancer, after a few weeks battling the cancer she died.

I’m therefore now living on my own and can no longer keep up the payments into the debt management program. I have started to receive letters from my creditors and I know they won’t go away so that is why I need to file for bankruptcy.

 

Now, I have made a list of my out goings and I want to run it by everyone to see if it seems reasonable. Some of this is just a best guess of what I think is correct as I have had no real experience of living on my own.

 

Rent – 475

House Keeping (including food) – 195

Gas, electric, other heating – 180

Telephone charges – 30

Travelling to and from work – 90

Clothing – 15

House Insurance - £12

TV Licence - £12

Life Insurance - £17

Vehicle Servicing - £10

Road Tax - £17

Motor Insurance - £30

Vehicle Breakdown Cover £10

Medicines / Prescriptions - £10

Dentist / Opticians - £15

Hairdressing - £5

Sundries / Emergencies £10

 

Does the above seem reasonable?

 

 

Thanks!

Edited February 15, 2010 by rapterman

[debtinfo]

OT, but I've always wondered how the OR/IS thinks this type of calculation is right - if your surplus is £100pm, then you pay nothing, but if your surplus is £101-199pm, then you're left with less than £100pm....

 

My surplus is £80, so no IPA for me (apart from NT), but just wondered....

 

Cheers

Michael

 

 

Quite simple, they could have an IPA if they wanted to, but it is just not cost effective to be collecting £20pm, The collection company works on commission and so will only go so low

[mcuth]

Quite simple, they could have an IPA if they wanted to, but it is just not cost effective to be collecting £20pm, The collection company works on commission and so will only go so low

 

Doh - me smacks self in forehead - that's so obvious, thanks for pointing it out []

 

Cheers

Michael

[rapterman]

I was just thinking about maybe seeing if my creditors would accept an IVA. I will discuss this with the advisor from the CAB when I go for my appointment.

 

What would be the minimum amount of surplus for an IVA?

[gezwee]

I was just thinking about maybe seeing if my creditors would accept an IVA. I will discuss this with the advisor from the CAB when I go for my appointment.

 

What would be the minimum amount of surplus for an IVA?

 

Not sure there are minimum values as such but you will require a minimum 75% take up of offer.

 

In my case Carpwest held 60% of voting rights so it was pretty much blown out of the water before it even got considered by any other creditors

 

Gez

[rapterman]

Not sure there are minimum values as such but you will require a minimum 75% take up of offer.

 

In my case Carpwest held 60% of voting rights so it was pretty much blown out of the water before it even got considered by any other creditors

 

Gez

 

Yeah I was thinking that may happen to me if I try for an IVA, but at the end of the day I do want to pay my creditors the money I borrowed, or at least what I can afford.

As far as I can see its either an IVA for five years or if they reject it then bankruptcy for three years and they will only get 50% of the surplus as far as I'm aware.

 

Question: I know that creditors can reject an IVA, can they oppose or object to a bankruptcy petition or is it out of their hands?

[debtinfo]

It is out of their hands, you are either insolvent or not.

[homespun]

hi,

dont worry about a bank account,the co-op will give you 1 with a debit card,mnost other banks will not.

they gave me 1

hope that helps.

[Ginas1401]

Hi Rapterman.

I was made bankrupt by a company in August last year. I was terrified. In total I owed about 70k. I had a very messy divorce where my husband made my house be repossessed and ran up massive joint debt.

In all honesty it is the best thing to have ever happened to me. I no longer have any debt and have just got an early discharge. I was allowed to keep my car which is on finance which a settlement figure of 5k. I still have my mobile phone contracts and really nothing at all has changed in my life. It is a lovely feeling though to know that I am now a 'discharged bankrupt'. I have a next directory account which i got while bankrupt. I actually tried to purchase something off their website by card and filled in the pages they asked me to. The next thing I knew the goods were sent to me and they had given me an account. I have a low credit facility with them but it's up to date and is helping to fix my credit.

I do not have a payment order in place so we can start to rebuild our lives, and start living again.

i know how scary it is believe me. I thought i was going to have a breakdown, but the sun still shines and people still love you

[loobyloo85]

Hiya, looking at your previous posts you wouldn't technically lose anything by going bankrupt, as you live in rented accomodations and as far as I am aware you have no assets of a high value.

Your bankruptcy will cost you £510 from April, and this should last 12 months. They can ask you to pay into an income payment order for 3 years, which is whatever money you have spare at the end of the month, which you must pay.

The IVA is a legally binding agreement, which as you say could be rejected by your creditors and would take a further few years to clear, whereas if you choose to make yourself bankrupt, your creditors will have to go with this. There is the difference of stigma between the IVA and bankruptcy i.e in the IVA all assets and employment is safe, and in bankruptcy dependant on your circumstances it is not always. Bankruptcy can also be issued in the paper.

[debtinfo]

The Fees for bankruptcy are currently £360 (for the OR) + £150 (for the court), so £510 in total if you are employed.

 

From April they will be £450 for the OR + £150 for the court so £600 in total

 

on a side note bankruptcies are vary rarely placed in a local paper anymore.

[rapterman]

Thanks for the replies.

 

I have now got the money together for the bankruptcy, my forms are 99.9 percent complete, I just need to get hold of a Solicitor to complete the Affidavit part of the forms and I can then go and file at the court!

 

Thanks again for all of you that have helped clear up any questions that I have had to ask.

[out of cash]

hi rapterman,

 

i had a very hard time getting creditors to accept what i could afford hence why i went bankrupt.One good example is a very well known visa card company,the small print in their terms and conditions said contact us as soon as you experience any financial difficulties of which i did,their idea of helping was to shaft my apr rate from 4.9% upto 36.8% this should be a lesson for them if they keep piling on the pressure for people they are going to end up with zero as they are now findinding out.

 

why do you need a lawyer for the affidavit "i didnt" also had multiple creditors and assetts involved.

[shinobi101]

I was just thinking about maybe seeing if my creditors would accept an IVA. I will discuss this with the advisor from the CAB when I go for my appointment.

 

What would be the minimum amount of surplus for an IVA?

 

Hi rapterman, you normally need at least £200 surplus for an IVA.

 

If you fail to make a payment you can be made bankrupt anyway. If you get a pay rise or lump sum they can take it. IVAs are not usually favoured unless you have assets to protect or a job you can't do if you're bankrupt e.g. politician, insolvency practioner etc.

[rapterman]

Hi rapterman, you normally need at least £200 surplus for an IVA.

 

Yeah, I will have just under £100 pounds surplus so that's why I have decided that the only other option is bankruptcy.

 

why do you need a lawyer for the affidavit "i didnt" also had multiple creditors and assetts involved.

 

I was told by the Citizen Advice Bureau that you need to have the Affidavit sworn in front of a solicitor. I think that it can be done at the Court when you file as well. I hope to get an appointment this week so that I can file at the Court next week and get the ball rolling!

[debtinfo]

you do not need a solicitor

[rapterman]

you do not need a solicitor

 

Oh.. Now I am a bit confused.

 

It says on the BR form (See attachment):

 

When you have completed the rest of this form, this Affidavit must be sworn before a Solicitor or Commissioner for Oaths or an officer of the court duly authorised to administer oaths.

 

Does this mean that I can just have the Affidavit sworn at the court when I file?

6_31_debtorsPage1.pdf

[debtinfo]

yes, the officer of the court can be the clerk on the day you go, that is how nearly all people do it. this is free in local courts but the high court charge £12

[socktug]

yes, the officer of the court can be the clerk on the day you go, that is how nearly all people do it. this is free in local courts but the high court charge £12

 

In NI the only court that deals with BR is the High Court, and they charge £30.00. I rang them to check when I was doing my forms.