Elderly couple with overwhelming debts, is bankruptcy advised?

[Shel100]

I need advice regarding our overall financial situation, and in particular with regard to bankruptcy. I have shied away from that step until now, but find myself more often thinking there’s some practical common-sense in it.

 

So if someone knowledgeable could therefore check/correct my thinking or add focus for me I should be very grateful for all advice and guidance received as the stress of all of this is becoming rather too much.

 

Facts:

1 - My wife and I are both 63, and following a business collapse a few years ago I have a CCJ and seven debts:

- 2 x business and 1x personal bank loans, £3931, £3906, £3118

- 2 x defaulted credit cards (PPI invoked at first but ended after 12 months), £3297, £3862

- Pre-existing mortgage default/repossession/forced-sale shortfall £24,985

- Recent house repossession/forced sale shortfall £29,750

- CCJ (2002) £50,000 payable £50 per month so *only* £44,600 remaining.

Total debt £117,449

 

At the time of the business collapse I negotiated payments of £5 per month with all apart from one at £10 per mth. Payments have almost always been made on time, only once or twice being 2-3 days late simply because of difficulty getting the money together.

 

2 - We lost the house to repossession and are living in rented accommodation. We no longer have any assets, and income consists solely of Pension Credit which includes/cancels-out my wife’s pension. With Pension Credit bringing Housing Benefit and Council Tax Benefit too we have been just about able to cover our household and living expenses and loan servicing, though at times with difficulty but we have managed.

 

Though I would have preferred to return to self-employment that has not been possible, and at my age I have not been able to find employment capable of meeting even our low-budget needs. In fact, taking a job and losing Housing Benefit and/or Council Tax Benefit would immediately guarantee that we would have difficulty paying our bills, plus I would no longer be able to service my debts which would then escalate those matters.

 

 

Observations:

1 - It is clear that approaching my mid-60s I am unlikely to work in employment again, and that returning to self-employment on any level is impossibly remote. I will never be in a position therefore to clear the above £117K+ debts, even with low-paid work.

 

2 - Whilst with careful management we could simply keep servicing the loans, as there’s no possibility of my circumstances improving by the large amount necessary for me to be able to clear the debts, that isn’t achieving anything other than stopping the phone from ringing with chase calls (which is a tempting enough reason itself for continuing ticking over !)

 

3 – Assuming that my wife outlives me, this is setting-up an unpleasant or worse situation for her to face.

 

Bankruptcy:

I am in the process of writing to my debtors asking them to consider writing-off my debts. I have little expectation of agreement, but I must try. Even if all were to agree however, almost half the debt would still remain in the £50K CCJ.

 

I have avoided considering bankruptcy until now because of its ongoing restrictions/ramifications. I see my only path in to solvency coming from self-employment, and bankruptcy would severely hamper that possibility should the basic opportunity even present itself in time for me to develop a business and provide a house for my wife as a secure and worry-free home when I am no longer here.

 

However, I feel I now have to abandon personal ambition and act in a short-term-constructive manner. It is more relevant for example that I am hardly likely to be looking for a mortgage again at my age, plus my credit rating is already completely fried, so a bankruptcy doesn’t really have much of an impact on those areas where for someone younger with a career/business and a family it would be a disaster.

 

Questions:

1 – Is bankruptcy the reasonable path it now seems to be to me in order to be able to close doors and regroup?

 

2 – Is a CCJ also set aside by bankruptcy? The circumstances are that I (Sole Trader) held a client’s deposit for a significant building project, and when things became a little tight after just a short while I drew from the deposit in the manner of actually taking my profit in advance. Had the project run to completion it would all have evened-out, however the client’s circumstances altered before it could and they requested their deposit back as they were no longer able to continue. A bad call on my part therefore, though not malicious or with deceitful intent in any way but it was a bullet that I just couldn’t dodge.

 

So I wouldn’t want to retire the CCJ via bankruptcy if I may then simply get hit with a different legal process based on some other claim that may end up with the same result or even possibly worse.

 

3 – The CCJ was issued in 2002. Does a CCJ run for ever/life or is there a limit point at which it lapses?

 

4 – My wife and I do not have many possessions, really just our own cars so we can get out and about independently for errands and to visit friends, that kind of thing. Other than furniture, TV, her sewing machine that would stitch planks, a computer, two pedal bikes, that’s about it.

 

My wife’s car is an elderly Mondeo that would barely fetch £3-400 and is not in the best shape and could do with some work but drives mostly alright, and I drive a 16 year-old Mercedes estate workhorse that has rust and barely made it through the MOT the last few times, worth I-don’t-know-what because it has done nearly a quarter of a million miles! £800-1000 on the name and because it gets around ok enough perhaps? Or Something for spares maybe.

 

My question in this regard relates to a little windfall just under £2,000 that I was intending to use some of to fix some things on the two cars so they carry on being useable. Would we lose the cars on becoming bankrupt as these are as much as could be regarded as our main assets? If so, then I wouldn’t even think to fix them up for another year or so’s driving only to lose them – I’d rather buy some more shoes and socks and some extra groceries then give the rest of it to someone in the family, literally!

 

5 - I have many questions still whirling around inside, but I think I need the fundamental question about bankruptcy clear in my head first - a practical solution or the road to Hell?

 

I know without doubt that there is a great deal that I am not even seeing however, so if you wish to offer observations of your own please feel free.

 

* * * * *

I have tried to be light hearted, but in reality I have debts that would need a lottery win to be able to clear, and no hope of earning/making anything like enough myself in the face of advancing years to change that.

 

My wife is not a strong lady anyway but is now very fragile over the uncertainty of the future at a time when we had expected to be living in reasonable comfort and security.

 

The month-by-month loan servicing with no visible resolution ahead is in fact contributory to the stress and its effect upon both of us, even though payments are going forward on an agreed basis and the collections agencies are generally going along with things. I am sure however that that can’t be an indefinite situation. Overall it seems to be a ticking time-bomb.

 

I would therefore very greatly appreciate any light that anyone can throw on the suitability/relevance of bankruptcy in these circumstances, and on my logic just now that is suggesting it is a good thing after all! ... I have looked a little in to IVAs too but that arrangement seems suited to a different basic situation altogether.

 

I would particularly like also to learn about the handling of the CCJ in bankruptcy, also about any replacement action that then could be taken against me instead of recovery, as it is that which worries me somewhat and would render bankruptcy irrelevant to me if a debt disappeared but was replaced by some other action and sanction – I’d prefer to deal with the CCJ ...

 

Thank you if you feel drawn to help.

[rebel11]

The guys will be happy to advise as soon as they are available.

[toddle2u]

Shel100

 

I feel for your situation and you have my sympathies having been through a business failure myself. Luckily I was young enough to dust myself down and go again. Strangely I now find myself working in the insolvency industry helping other businss owners avoid the pitfalls from what I learnt.

 

On the face of what you have said I can only see BR being the best option for you. You have stated that you feel that BR would hamper your options in self-employment. You are still able to earn a living whilst BR and therefore you can still work on a self employed basis.

 

With regards to the CCJ this will be included within the bankruptcy and they will become an unsecured creditor. I cannot see anyway that they can come at you again regarding this once it is included within the bankruptcy. Was there any other action taken against you at the time apart from the CCJ?

 

With regards to the cars and other assets, with the figures you have stated I do not think that you would have to give any of these up to the OR

 

An IVA would definately be (IMO) a no-no in this situation and pointless to even contemplate

 

With limited assets a low income and a high level of debts I think that BR would be a positive action for yourself (and your wife's peace of mind) so that you can put the worry and stress behind you and get on with the rest of your life and try to enjoy it without having to worry about finding the money for creditors each month.

 

I would welcome any alternative thoughts on this from others.

Edited June 22, 2011 by toddle2u

[oldgirl]

Good morning Shel, I'm no expert but plenty of people on here will help you I'm sure. Just wanted to say my brother was in your position about 5 years ago and in the end bankruptcy was his only resort, he says it was the best thing he ever did and that the Receiver was very understanding and told him and his wife to 'go away and get on with your lives now'. He says that the relief was undescribeable being able to wake up without worrying himself sick about calls/visits from creditors, he kept his car and now has a normal bank account with debit card etc. Going bankrupt is no shame Shel and you are in this position through no fault of your own, you and your lady wife deserve peace of mind and a decent life, hubby retires in a few months and I fear we may find ourselves in the same position.

Sorry I haven't been much help Shel but I wanted to let you know that people do care and i know you'll get all the help and moral support you need on here, very best of luck.

[Shel100]

I am looking back just briefly this morning before heading out for a few hours on some errands including a visit to the CAB, and I was really not expecting to find any response but am lifted by seeing what appears to be the beginning of the end - in the nicest possible way of course!

 

I should be most appreciative of anything that experienced-others may add also - this is all rather trepidatious and nervous-making to contemplate, and I should like to acquire as much of an awareness of matters as possible in order to follow along and generally know left from right and appreciate the reasons.

 

Toddle2u

Thank you for your kind concern, and also for the specifics that you give and that have already helped my awareness move off zero. I haven't the time for more than this acknowledgement just now as it has caught me by (pleasant!) surprise, but I will respond more fully this evening. But for now, thank you so much.

 

Oldgirl

How lovely! Thank you for the comfort and reassurance that you offer. This is a very daunting situation when you have no experience, and those things have such value. I am delighted that your brother's affairs went so well, and I hope that his experience - and eventually mine too! - brings you comfort and strength also shouild you ultimately need to take the same path after all.

[Happyhippy1959]

Shel100,, I am no expert but have looked into bankruptcy for my £40k of unsecured debt. The only thing that has stopped me at the moment is my house. I have no equity in it but if I kept paying for the house after BR and I should lose my job then if repossessed I would have to find any shortfall. So at the moment I am holding off. Your case seems to me clear cut mate,,,, I have many friends and acquaintances that have gone BR and they have said, BEST THING TO HAPPEN TO THEM.

 

Again, the decision is yours. But in today's world BR is not what it use to be. Take a look on line and see all the rich and famous who have gone BR....

[Shel100]

HappyHippy

Thank you ... and I’ll be sure to look out for the particular form I have to complete to be sure of getting the rich-and-famous result , I rather like the sound of that one

 

Toddle2u

I was very taken-up with some parts of this and other things yesterday and last evening, so wasn’t able to drop back as intended.

 

Just to mention first, my comment about not being able to return to self-employment was not referring to any prohibition but just to the lack of finance/capital now to start something up. Take every advantage of your younger years!

 

But anyway, thank you for your words, such a helpful start when my knowledge was already zero.

 

And my knowledge isn’t yet a great deal better, but I am trying to do something about that and will be spending today online and no doubt fuelled by endless cups of tea, learning as much as I can via Mr. Google - and right now there seems so much that I might end up gravity-welded to my chair!

 

I was at the CAB yesterday on a different matter entirely, though touched on bankruptcy simply because I had it on my mind of course as well as having just beforehand read your reply. The first reaction was to avoid at all costs, however the person I was with was not a financial counsellor in any way and when prodded admitted that this was not her field of expertise but that she simply believed that it could be a very serious step and I should seek very focussed guidance. Nothing you wouldn't expect already. So I tended to dismiss her response, though not her best-intentions in making it.

 

I have one or two come-back questions that I will among others be looking to answer online today, but if you can comment further I would be grateful.

 

1 - I don’t quite understand your remark about CCJ becoming an unsecured creditor. I understand well enough just what an unsecured creditor is, just not your implication. Would the unsecured debt remain after the bankruptcy period? I understand (now!) that my debts would still be “live” during bankruptcy and would be repayable within that period should my circumstances make that possible, with which I have absolutely no problem as it is the right thing to do. From only a very sketchy half-day learning-curve so far, I understand however that debts can continue after the bankruptcy period under some circumstances? I would assume that a CCJ would be regarded as pretty important and therefore entitled to some further life? Or am I misunderstanding through ignorance?

 

2 – To answer your question, no there was no further action/process against me other than the CCJ process ... and that’s part of my concern in case of *heavier* action/options still which would lead to much more unpleasantness and stress particularly for my wife, which distresses me. I’d rather put up with / accommodate the CCJ.

 

3 – And in that same regard: The defaulted mortgage was in joint names - if I am bankrupt will they simply switch and go after my wife? I only thought of that while lying awake last night, and it didn’t do much for my desires to get to sleep. Do we both have to be become separately bankrupt before this goes away?

 

4 – I believe that as well as creditors the Official Receiver automatically notifies other parties. Does our Landlord have to be notified?

 

5 – I had a brief websearch last night but will be looking today for a walk-through of the processes of filing for bankruptcy and what to expect, what happens on the day, how it then moves along, etc. Do you happen to know already where I can perhaps find this? For example I discovered just conversationally at the CAB yesterday that I actually have to pay a substantial fee to apply! Seems a puzzling notion, being required to pay in order to address not being able to pay.

 

6 – Similarly, should I have someone professional with me to deal with the hearing? I have no idea what form it takes or how onerous, and don’t want to make a mess of something so important, or indeed do less than the best because of not appreciating small points and implications. I already feel I might not *do* the hearing all too well.

Again I am sure that each answer will give rise to other questions, so I should deal with what worries me most first and have some more information to throw a little light in to a couple of the dark corners anyway.

 

Okay, off to make that first cup of tea and get started as my wife is off to visit a friend this afternoon which is a nice distraction for her – I’d like to find something useful/reassuring/informative/good to pass on to her when she returns, so I need to start digging.

[matt5983]

Just going to help a little here.

 

Point 1....... In bankruptcy you are removed from all liability, so any CCJ is removed as when as any unsecured debts, so you become debt free as soon as the judge has wrote bankrupt on your SOA . Debts are not repayable unless you win the lottery or something, however they can do IPA/IPO, but this is very very rare if income is only made of benefits, pensions etc.

There are few debs which cannot be included, i.e student loans etc, but almost any debt can be included.

Point 2......CCJ will be gone once made bankrupt.

Point 3.........As your removed from all liabitly of your debt, the debt company will go after anyone if it was joint

Point 4........Your landlord is normal notified, but only in the event if you owed them money, but that is upto the OR so you can ask then.

Point 5.......You go into the bankruptcy section where the clerk will see you, you pay your money and he/she just makes sure your paper work is correct. You then go and see the court clerk, you will either see the judge or not, depends if he his busy. If not the clerk will call you forward after he has seen the judge and hand back your paper work and tell you your now BR, go back and see the first clerk and she will send you to the OR office. Once there, she will run through your SOA, takes about 10 mins, she then will call you in about 10 days times just to ask some other questions. like what was the debt for, any assets and how did you get into trouble.

Then if she has any issues with your debts, you will not here from them unless for information they might need.

I was made BR in march, already been told i can have an early discharge by september as i have been a good boy and told the truth and been very helpful lol

Point 6........honestly it is very easy to do, just a bit nerve racking, but we can help with the forms on here, i promise its very easy.

 

Ask any questions you want to ask

 

Matt

[toddle2u]

Shel100 -

 

Matt has answered your queiries and I cannot disagree with his advice only to add that with some Courts you need to ring up in advance and book an appointment to file your petition and you cannot just turn up on the day you want to file. So best to give the Court a ring first. You need to file at the County Court closest to you that deals with Bankruptcy. You can find this informaiton out on the HM Courts website.

 

With regards to point one all I meant was that the person who has the CCJ is shown no preference like a secured creditor and is included within the bankruptcy like any other (unsecured) creditor.

 

Concerning point 2 - The CCJ is included within the bankruptcy so there is nothing further they can do legally to pursue the debt.

 

Point 6 - As Matt says the forms look difficult but with the help on here you will get all the assistance you need. You do not need any professional help at the hearing. If you have to see the Judge he will ask you if you have sought advice on the Bankruptcy and all you say is yes with CAB and he will wish you well and tell you to enjoy the rest of your life.

 

It is good that you are doing your own research and seeking advice because ultimately it is your decision to do this. It can be daunting and confusing but we are here to help and if/when you have any further queries you need only ask.

[Shel100]

Matt and Toddle2u

 

I have only just looked back here after spending the afternoon researching both online and also within our personal papers when I occasionally needed to check something before reading/searching further ... some papers took a bit of looking-for, and one or two still need to be found – that’s the trouble when your affairs go back so far!

 

And not too many opportunities for cups of tea after all, the time has shot by.

 

Matt thank you for the confirmations, also for the step-by-step – most helpful. Toddle2u I note your further remarks, and thank you. With that plus what I have been able to find on the internet I feel a lot more knowledgeable now about the whys and wherefores, though in other ways the nervousness now has a sharper focus not a smaller presence – but I guess that’s just how it is.

 

I have one big issue however, and in fact it is hard for it not to be a deciding factor on whether or not to go ahead at all.

 

It concerns the fact that the defaulted mortgages were joint-mortgages.

 

If as you say Matt the debt will simply switch to my wife, I truly couldn’t envision moving all of that – 2 debts totalling over £54.5K – on to her shoulders and then have her go through the processes and communications and calling and all the comings-and-goings this leads to, and then most probably the same bankruptcy process in order to see daylight again. As I have said, she is not a strong woman and is already fragile with the stress and more. In fact it is that that I am wanting to draw a line under, and opening up a whole new sequence of events directly involving her is something I simply will not accept doing - I am fearful for the effects..

 

In one case (SPML) the mortgage default has been passed to a collections agency and in the other case (C&G) is being dealt with by Lloyds, with both of whom I have subsequently made payment arrangements of £5 per month. The pre-printed books of payment slips I am provided with for making payments, and which show details of the debt, loan reference numbers and more, are only made out in my name not “Mr and Mrs” which would have been more accurate as far as the original arrangements are concerned.

 

I had hoped that this indicated that they considered us as a single entity on the basis that the assets of the mortgage-payer/breadwinner are the assets of the couple anyway, and if one is broke then both are. But you say not, sadly.

 

So as much as bankruptcy now makes a lot of sense to me, if the price of my own weightless shoulders is my wife’s health and stability which I genuinely believe would suffer in such a personal escalation, I really have no interest in going much further.

 

I really hope that there’s possibly a sidestep whereby I could still go forward with the bankruptcy, which is quite a turnaround given my strong views to the contrary until these past few days, however I suspect that these things are very rigid as they probably need to be, and that if you say, Matt, that my wife would replace me as the target then I fully expect that to be exactly the case.

 

Still looking, but without much expectation.

 

Damn.

Edited June 23, 2011 by Shel100

[matt5983]

May i ask, your asset's?, do you own your own home. If so is there equity in the property?

[matt5983]

oops sorry, just seen that you dont.

 

Now if you can afford to both go bankrupt then great. If not thats not a problem as such.

You could either go bankrupt and keep the sharks at bay until you can afford for your partner to go bankrupt.

Or your partner to go bankrupt first and wait until they make you bankrupt

[toddle2u]

Again good advice from Matt.

 

As you fear the jointd ebts will pass to your wife should you make yourself bankrupt. As suggested you should serioulsy consider both of you filing for bankruptcy. Think of the short term here - once you have filed you are both debt free. No more worry, stress, phone calls and visits from debt collection agencies to worry about compared to the situation you are in now which is affecting both of your health and general well being. As already advised it is a painless process and is designed to be for someone in your situation. Oncee you have attended court and had the interview, which could and probably would be, by telephone you will have very little dealings with the official receiver apart frrom a few letters. For the sake of your wife's health and your own peace of mind please consider this option and look forward to a brighter debt free future

[Shel100]

Matt & Toddle2u

 

Thank you for your sage and sound advice – I initially posted seeking exactly that, and so ignoring it would be foolish.

 

As a result of such strong urgings we have had our own conversations and will do so further across the weekend. As much as I do not want my wife to see herself as a helpless victim of my circumstances and the Land’s automatic processes, which of course she is, it is inevitable that a little of that feeling will live inside her if having to become bankrupt herself; remember, she is not a strong woman, and no matter how you label it she is already past her middle-life, as am I though hopefully with plenty of fizz left yet!

 

However it is also clearly the case that in exchange for the initial nervous-making moments of application and processing for her, the benefits thereafter for both are very desirable indeed and she has already taken a few deep breaths as we have been speaking around the subject.

 

As part of that continuing I will be getting the petition forms and looking at those to go through with her for her comfort and for my own further awareness. I am sure that there may well be some jargon encountered and some clarification here and there, and if so I will certainly welcome a little guidance on anything unclear to me.

 

Again, your thoughtfulness and guiding words are gratefully acknowledged.

[matt5983]

Matt & Toddle2u

 

Thank you for your sage and sound advice – I initially posted seeking exactly that, and so ignoring it would be foolish.

 

As a result of such strong urgings we have had our own conversations and will do so further across the weekend. As much as I do not want my wife to see herself as a helpless victim of my circumstances and the Land’s automatic processes, which of course she is, it is inevitable that a little of that feeling will live inside her if having to become bankrupt herself; remember, she is not a strong woman, and no matter how you label it she is already past her middle-life, as am I though hopefully with plenty of fizz left yet!

 

However it is also clearly the case that in exchange for the initial nervous-making moments of application and processing for her, the benefits thereafter for both are very desirable indeed and she has already taken a few deep breaths as we have been speaking around the subject.

 

As part of that continuing I will be getting the petition forms and looking at those to go through with her for her comfort and for my own further awareness. I am sure that there may well be some jargon encountered and some clarification here and there, and if so I will certainly welcome a little guidance on anything unclear to me.

 

Again, your thoughtfulness and guiding words are gratefully acknowledged.

 

Your more than welcome, that is why we are here. Remember, some of us are in debt and fighting and others like myself have become debt free due to this site. If you need any help what so ever, weather it be more advice on questions you may have, or help with the forms. I can promise you that bankruptcy is a very painless process. However, i will say that if you partner does do it first then fine but when the OR ring, it may a very good idea for yourself to talk to them and get your partner to give permission for you to do so.

[toddle2u]

Shel100 I spent five years of my life fighting off creditors and it really was the biggest waste of five years as they 'got' me in the end. If I had petitioned myself when it all first happened I would have a clean credit file by now. I am glad you have spoken to your wife about it and I promise once she gets over the initial bit of filling in forms and the court process she will be able to breath a huge sigh of relief.

 

If you need any help with the forms or clarification on anything just ask

[Happyhippy1959]

Shel, a wise move my friend,,,, it looks like the Hippy could be heading that way as well. Told this week that they will not pay me any more overtime rate if I work extra, which I did a lot... ( NHS ) they want me to work for a flat rate on overtime..

 

Told them that our management would not so get Stuffed. I would rather clean the toilets at Sainsbury's than give in. Principle, it's not as if it is a vast amount in the grand scheme of things. To tell you the truth that overtime kept my head above water but now it seems I am to sink. The only problem for me is to get a flat somewhere, could move in with girliee friend but if going bankrupt I don't want to drag her in...oh decisions decisions.......... nice home of twenty years but it's killing me trying to keep it... My sweet kids ( say that tongue in cheek ) never visit, no dad's day card and still I struggle on just in case ex Mrs Hippy has problem with rental. She now has the Debt collection boys after her.. hmmmm. Now if I just stop paying the mortgage and secured loan and let them repossess and the short-fall will then become unsecured I am away with it.

 

Mrs Ex Hippy and new boyfriend can pick up the fall out.... oh there is a silver lining at the end of each bad event. She thinks she can bury her head in the sand.. hmmmm

 

Kids by the way are 17 and 14 also I will have to let it get repossessed so that i can sign on the council waiting list.. ( not holding me breath there )

 

But anyway Shel, enough of my woe's go for it mate and tell Mrs Shel to do the same.... you will have some satisfaction of putting the finger up at the greedy sods.

[Shel100]

My thanks to everyone, as much for the welcome support as for the direct info.

 

As you would expect, bankruptcy and its effects have been the only topic of conversation the last few days. Over the weekend it became clear to my wife that really it was the sensible thing to do, although not of course a choice she/we would have made under different circumstances.

 

I have downloaded the appropriate forms and have not looked closely at them but have run through them nevertheless to get an idea. We will be taking the next step soon now, but want first to get a little more familiar with one or two things that will change and/or need to be done differently.

 

I already have a couple of questions that relate to the form, but I am not raising those just now but will possibly ask them with others here when I sit down properly to deal with the paperwork.

 

Just at the moment however I am unclear on one or two of the personal -life aspects however ...

 

Bank Account: I understand that these are frozen/closed. Do I do that or does the OR step in? There will still be banking needs in bankruptcy however such as direct debits for insurance, phone charges, that kind of thing. Also, assuming someone would still be employed or even work for himself, they would need a bank for everyday needs and it would certainly work against the best interests of self-employment if banking facilities were not Available. So, is this rigid, or would you have to ask the OR to allow an account to remain live?

 

Credit cards surrender: does that apply to debit cards too? A credit card’s unsuitability in BR I can understand, but a debit card can only be used if there is money in the account it is linked-to. It is like reaching in your pocket to pay for a newspaper, you can only spend it if it is there. Again, if looking at becoming self-employed it would be awkward without some form of plastic, and the debit arrangement would seem no risk anyway.

 

Same with charge cards too that you have to clear straight away. I would hate losing the convenience of my AmEx cards. So is it acceptable to destroy the credit cards but put debit cards to the back of the drawer until a year or so later when they will actually be of very positive use and particularly relevant to your new circumstances ?!

 

I simply want to get all affairs in order so something doesn’t turn sour or worse ... for example my wife’s monthly phone cost goes right to her credit card simply because it is a fabulous way of money-management when, like we are, you have a very tight income and have to focus everything very finely indeed. It is like the old fashioned thing about putting money in different tins to pay different bills when they arrive ... only today it is plastic that many women use just like those boxes in order to manage household expenses etc.

 

.. similarly for example we have SKY for the movies which is a big part of our entertainment as the price of cinema tickets and a couple of drinks and some popcorn is more than two weeks food for us! The SKY rental also goes to another credit card of my wife’s, its own *tin* .. there seriously needs to be something that people in such circumstances can make use of to avoid mis-management and unintended arrears, missed-payments and more.

 

But anyway, can someone perhaps clear that area of household money-management up for me at all? It could be a problem and also involve us in extra costs that we can’t afford if having to cancel one perfectly workable arrangement and organise something else instead ...

 

Can I ask you, having gone through the process, how you dealt dealt with credit card matters in particular please? And when discharged, is it ever possible to get accepted for credit card services again? Anyone care to share how they got on with that, and with what results?

 

Thank you.

[toddle2u]

Shel100

 

I am glad you have been have a think about the implications to this and discussed it through with your wife.

 

Firstly the OR will freeze all your bank accounts even if there is no overdraft limit or cheque book. Any with an overdraft or cheque will remain frozen. However, if it just has a debit card and no significant amount of money in the OR may ask the bank to keep it open for you to continue using for day to day purposes. Whether they do or not is up to the bank and some banks will not let a bankrupt have a bank account. The best solution is to open a parachute account now with either Natwest (step account) or the Co Op (cash minder) who will let you operate the accounts throughout your bankruptcy. These offer debit cards and the usual internet banking and are sufficient for your needs. You should begin transferring any direct debits or incoming payments to them now to make the transition smoother so as that it is not all a big panic when you do file.

 

With regards to your Amex card this will undoubtedly be closed as a charge card is a form of credit.

 

With regards to the money management remember you will be receiving the same income as now but will not be having to find the money for creditors so you should be better off.

 

With regards to credit in the future you should be able to get some form of credit card after about 12-18 months from the likes of Vanquis or Capital One who do cards for people with bad credit but be warned they charge high interest rates but if you pay them off each month they are a good way of starting to rebuild your credit rating.

 

It is good to get the questions out of the way now so you can plan ahead. Any other questions just ask

[matt5983]

Shel100

 

I am glad you have been have a think about the implications to this and discussed it through with your wife.

 

Firstly the OR will freeze all your bank accounts even if there is no overdraft limit or cheque book. Any with an overdraft or cheque will remain frozen. However, if it just has a debit card and no significant amount of money in the OR may ask the bank to keep it open for you to continue using for day to day purposes. Whether they do or not is up to the bank and some banks will not let a bankrupt have a bank account. The best solution is to open a parachute account now with either Natwest (step account) or the Co Op (cash minder) who will let you operate the accounts throughout your bankruptcy. These offer debit cards and the usual internet banking and are sufficient for your needs. You should begin transferring any direct debits or incoming payments to them now to make the transition smoother so as that it is not all a big panic when you do file.

 

With regards to your Amex card this will undoubtedly be closed as a charge card is a form of credit.

 

With regards to the money management remember you will be receiving the same income as now but will not be having to find the money for creditors so you should be better off.

 

With regards to credit in the future you should be able to get some form of credit card after about 12-18 months from the likes of Vanquis or Capital One who do cards for people with bad credit but be warned they charge high interest rates but if you pay them off each month they are a good way of starting to rebuild your credit rating.

 

It is good to get the questions out of the way now so you can plan ahead. Any other questions just ask

 

Agree with all this, they went to freeze my account but because it was not a creditor there was no need so it was left alone. So i could use it straight away.

Amex cards?.....are these the one you put money onto so it can then be used like a credit card, if so its upto you if you told them, personally i wouldnt and i didnt in my BR so i still have like a savings etc, even though it wasnt much.

Just make sure that you put all debt down as they don't appreciate missing debt off.

 

Im abit confused about your last question, you can get credit after about 12 mnths, or even if your in your discharge period, however if you did you need to tell the OR if its over £500, but that is if you got it whilst still being discharged.

What do you mean by credit card matters?

[Shel100]

It is a little late, so forgive me if I am brief just now but I didn't want your guidance to go unthanked.

 

Toddle2u - all noted, and very informative. I already have a basic account with LloydsTSB which provides a debit card but no chequebook, can't run direct debits or standing orders, is just a no-frills account, no overdraft option, never much more than £25-30 in it anyway. I don't know if they have a policy regarding bankrupts keeping their account open - would save a little messing-around if they did.

 

I'll see about those Co-op and NWB accounts, which I guess will also be no-frills facilities just the same ... But do you disclose when applying that you are about to become bankrupt, or make no reference until after the event?

 

Actually, two of my debts are with NWB from when I held my trading accounts there, so I'd expect they might not be inclined to cosy-up with me again!

 

And in fact a third debt is with Capital One credit card, which was all I could qualify for when I had had to default on my ordinary credit cards but still needed something for those times when only a credit card will do. So I suppose that's someone else who would be put off by an already-defaulted relationship and not be interested in history maybe repeating itself!

 

Matt - Amex is American Express ... it is a charge card not a credit or debit card .... you settle up in full at the end of the month, it never therefore has any extended debt. It is however a *debt* till the end of the month I guess, though you don't use it the same way as a credit card anyway because if you don't settle in full you lose the card, simple. I could shove it to the back of a drawer for a year and not use it, however I asume the OR connects to all sorts of other records and databases as a matter of routine anyway, and would discover what cards someone has held, and would be less than pleased if any hadn't been disclosed, cut-up, returned etc.

 

Picking up on one comment you make .... don't you actually run a high risk of trouble if you get selective with what you disclose on your petition and to the OR, and what you don't? Not that we have any assets to tuck away anyway, but surely the OR automatically looks at such things as Inland Revenue held information to see if there's something different in your apparent fianncial status, or credit reference agencies to se if you have undisclosed credit cards, are sitting on undisclosed other debts maybe, maybe making sure you aren't hiding a five-figure balance somewhere?

 

Or do they simply assume you aren't wanting to risk the repercussions, and take what you tell them as correct on the basis that you don't want to upset the apple cart? For example I also assume they ask for sight of recent bank statements and other proofs to make sure you aren't sittng on something or haven't just transferred-out or withdrawn some large sums ...

 

You have mentioned earlier that the OR will call on the phone for a chat soon after application. What is that actually for, to check the info you have given on the petition papers?

 

I assume that is a challenging event, probably because they have to be firm and thorough in order to catch-out people who are trying things on with them.

 

Okay I am fading v fast already, and it is late for me and I am leaving it at that and heading up to bed.

 

Thanks in advance if you feel like taking the time to add anything to my understanding.

Edited June 29, 2011 by Shel100

[debtinfo]

Hi Shel, i am an ex examiner at the Insolvency Service and so know the ropes pretty well. What you need to understand is that the forms are court papers and so anything that you deliberatly leave off is in fact perjury which is a criminal offence with a maximum penalty of 2 years in prison so not a good idea to pick and choose what info you put down, the forms ask for all debts, all assets and all cards so that pretty much covers any type of card or account you may have so there is no reason not to put everything down. I realise that was not what you were suggesting (another poster was) but just wanted to clear that up.

 

Feel free to ask me anything you need to

[debtinfo]

sorry forgot to answer your other question.

 

The first call is usually just to make contact with you, let you know who ther are and who will be handling your case, It is also an opportunity to deal with any matters that are urgent and cant wait for later. The usually als jus find out about if you have any disabilities or language problems etc anything that they need to take into account when the are handling your case

[toddle2u]

The NWB and Co-Op accounts both offer direct debit and standing order facilities but if you have outstanding debts With NWB it may present a problem but there is no harm in trying. They shouldn't ask the question why you want one but I know Co-Op have no problem if you say you will be filing for bankruptcy.

 

As debtinfo has advised it is best to be open and honest with the OR and declare everything to them. As already stated the first telephone contact is just to find out any urgent problems and they will then make an appointment to have a longer telephone interview with you or ask you to attend their offices for an interview. This is to go through your statements of affairs that you have submitted and will take an hour or so - more if you attend an interview. There is nothing particualry onerous about this it really is just to establish the facts of the bankruptcy and your assets.

[matt5983]

Hi Shel, i am an ex examiner at the Insolvency Service and so know the ropes pretty well. What you need to understand is that the forms are court papers and so anything that you deliberatly leave off is in fact perjury which is a criminal offence with a maximum penalty of 2 years in prison so not a good idea to pick and choose what info you put down, the forms ask for all debts, all assets and all cards so that pretty much covers any type of card or account you may have so there is no reason not to put everything down. I realise that was not what you were suggesting (another poster was) but just wanted to clear that up.

 

Feel free to ask me anything you need to

 

First off i hope you was not referring to myself telling the OP to leave off debts or cards. If it seems i was then i apologise as it wasnt my intention. My OR agreed to keeping charge cards for a rainy day, so it is upto the OR but providing everything is disclosed there should be no issues.

 

The OR does go in to alot of checking into your background, which is completely understandable as they need to know the facts as to why or how you get into the situation you have got it. I went form 80k a year plus, to about 9k in the space of 18mnths do to the health of a family member etc.

They are human and not robots but if yours is an open and shut case it will be nice and simple to do.

 

Debtinfo gives some great advice even more so as he has worked within the dept, he's not on here often from what i can see so grab him while you can.

 

Apologies to you and Debtinfo if i mislead you.

 

Matt