bankruptcy decision / living with bankruptcy

[sazheath]

Hi I will try to keep this short... I have been trying to find some support on the process of actually going through bankruptcy.

 

My husband & I have been talking to national debt helpline and following advice they have given us. We have around 40k debt between us (this has almost doubled from last year where we had some big changes in circumstances). We have 3 children under 3 and we are both working professionals.

Without paying our debts we are about £150 a month down on a realistic budget - so we have to cut out some essentials like haircuts, glasses, dental visits etc. basics baked beans here we come...

 

Anyway some of our creditors have responded to the token payments and are asking to review in a few months time, some have passed on to collection agencies.

 

I want to file for bankruptcy, we don't live in the home we own - it's too small and in negative equity, our car is only worth around 2k. I want an end date to what I feel is a noose around my neck - I want to know it's going to end and I might someday be able to save for my children's future without having 40k of debt to deal with first.

Husband isn't so keen. I think he is happy to wait and see.

 

In 5 years when they are all at school we will be better off financially (if we still have jobs...) but that's a long way off.

 

Can any one tell me what it is like to live through bankruptcy? How do you manage to pay the essentials when they freeze your account? Once the decision has been made how long does it take? When does the immense stress stop?

[Leakie]

Hi Sazheath

I have been in your situation,

I went BR in 2009 (Jan)

 

I thought it was the best thing I could do, it was but it was also hard.

 

The weight lifts off your shoulders.

 

What I learnt was before going BR, is be prepared and do it on your terms.

 

 

The problems I had was because I was self employed,

 

insurance was a problem because I was treated like a criminal dishonest etc,

 

make sure you have a parachute bank account,

 

stash any cash you if can, as a back up,

 

Make sure you are upto date on rent mobile home phone etc

if you are not you may lose them

 

research is the key to getting it right before going BR

 

look at all the options before you make your mind up to going BR

 

it is not always the best option but also can be the best option ,

 

every situation is different.

what ever you decided I will try and help.

 

Leakie

[sazheath]

Hi Leakie,

 

Thanks so much for your reply.

I think we are going to try to get to Christmas (live like paupers and save the money we need to pay for the bankruptcy & try to stash some cash as you advise), I think it's our only choice though. I think our only other option is to wait and see if anyone takes us to court and get a CCJ but I think we need to take control otherwise we could be in this stressball state for years.

 

Debtline took us through the process but I can't really imagine how it actually works when you are the person experiencing it. I think I get it up to the official receiver part...

 

The official receiver freezes you bank account - for how long? what happens to our wages? Do they take our wages? Do they give us money back to pay our essentials (rent, utilities,, food etc - my worry is obviously for my children) or do we have to save for that? how many months do we need??? bearing in mind we are totally skint that's where our problems come from how are we going to save much??

 

The lady said we would probably be discharged from bankruptcy between 6 and 12 months - what does that mean?

 

2 years on how is it for you? when was it hardest?

 

I realise these are probably stupid questions but I appreciate any information you can give me,

 

cheers

 

sarah

[Leakie]

Hi Sarah

 

Every case is different, as I have already said,

BR may not be the best optoin for you and Hubby,

 

Have you looked into an IVA

this is where you pay off a percentage of your debt, say 20-50% of what is owed, this is normally over 5 years

This helps to make the debt more manageable,

Mine was for business, I think I was about 30 pence in the pound it was ok for 2 years but work started to dry up and I decided to fail the IVA, and go BR

 

Down side for me, was and still is to a point is cash flow.

I started up as self employed again, but had to turn work away because I did not have the cash flow to pay for materials.

 

if you are employed

 

depending if you were wreck-less with your spending you could be paying money to the OR for up to 3 years

with this you do an I & E (Income and Expenditure) any money left over that they will take a percentage to pay back the creditors

 

Do not take the decision to go BR lightly, do a lot of research first. as I said do it on your terms.

Depending on what your debt is for try to make token payments to your creditors

As I have said I will help if I can

 

Leakie

[Leakie]

Hi again Sarah

I have asked for this thread to be moved to a different forum section

there are a lot more wiser people than my self,

I will stick with you to help where I can

 

Leakie

[citizenB]

moved to bankruptcy forums as requested

[Wintry]

Hi I will try to keep this short... I have been trying to find some support on the process of actually going through bankruptcy.

 

My husband & I have been talking to national debt helpline and following advice they have given us. We have around 40k debt between us (this has almost doubled from last year where we had some big changes in circumstances). We have 3 children under 3 and we are both working professionals.

Without paying our debts we are about £150 a month down on a realistic budget - so we have to cut out some essentials like haircuts, glasses, dental visits etc. basics baked beans here we come...

 

Anyway some of our creditors have responded to the token payments and are asking to review in a few months time, some have passed on to collection agencies.

 

I want to file for bankruptcy, we don't live in the home we own - it's too small and in negative equity, our car is only worth around 2k. I want an end date to what I feel is a noose around my neck - I want to know it's going to end and I might someday be able to save for my children's future without having 40k of debt to deal with first.

Husband isn't so keen. I think he is happy to wait and see.

 

In 5 years when they are all at school we will be better off financially (if we still have jobs...) but that's a long way off.

 

Can any one tell me what it is like to live through bankruptcy? How do you manage to pay the essentials when they freeze your account? Once the decision has been made how long does it take? When does the immense stress stop?

 

Hi Saz

 

To start with, could you give us a little more information -

 

Who do you owe money to?

 

What is the debt split between you both - eg what are your seperate debt totals (include any joint liabilities)?

 

Your statement of affairs (financial statement)

 

Do you rent the home you currently live in from a private or social landlord?

 

Who lives in the property you own? do they pay you rent?

 

Do you wish to keep the mortgaged home that you own?

 

Do you need the car for employment purposes?

 

Have you checked whether your employment will be affected by any of the formal insolvency solutions - bankruptcy, IVA?

 

Have you checked possible benefit & tax credit entitlement?

 

Did National Debtline go through all your options?

 

Have any of you served in any of the armed forces including the TA?

 

Useful information here on some of the other points you have raised -

 

http://www.bis.gov.uk/insolvency/Publications

 

http://www.trustonline.org.uk/

 

Come back to us as I am quite sure there are a number of people on here who will be able to help you further (including B/R forms) whatever you eventually decide.

Edited October 16, 2011 by Wintry

[Leakie]

Thanks CB

though Sarah will get a lot more help here,

 

Leakie

[citizenB]

I have also asked a couple of site team who know more about BR than I do, to pop in.. but it might be later in the week

[42man]

I would only recommend BR as a final option if you really can't see light at the end of the tunnel....it is unlikely that the Official receiver would allow the car to be sold as it may well be essential for you. BR doesn't have the stigma attached to it like it used to have...it is how you pull yourself out of it rather than how you deal with going through it. You would hand in all your cheque books and bank cards and open a basic bank account, you obviously won't be allowed credit, and you would go and see the official receiver, which sounds scary, but actually they just want to know of your real situation (they don't give help). You would give them your costs of living/budget and any excess outside of that the trustee would want to distribute to the creditors. After 12 months (possibly shorter but usually 12) then you would be released from BR. If you only have £20 excess at the end of the month after all your living costs / budget (this includes budgets for school /clothing essentials for living) then you can't let the trustee have any more.... If you have (for example) a jet ski worth £3,000 then the Official reciver/trustee would want that as an asset to be sold....usually the trustee would take between 20% and 40% of the amount as their fee (which comes out of all assets). But beds, toys etc essentials for living would be allowed to be kept....Bear in mind any potential disputes with any of your creditors (such as missold PPI for example). They will ask you at the interivew questions such as why you have gone bankrupt, what other assets you have that could be sold.

[thebadger]

Hi

I too have been there. It’snot nice but is such a relief and I agree with the other posters preparation isthe key!

In order for us to offer anymore advice, really you need toask wintry’squestions.

Andy

[matt5983]

Agree with the above, i have just been considered for an early discharge, but do you homework and you'll be fine

 

It was the best thing i have ever done, i only heard from the OR 3 times since my BR date and that was just asking for more info etc.

 

They will only freeze the account if u have a debt with the bank it is with, so open a parachute account, co op basic account is brilliant and get eveything payed in there if u have no debt with them. I asked about this and the OR said no as i had no debt with the company and i can go ahead and use it as normal !

[Madge67]

Hi Saz,

 

Your situation seems almost identical to ours. We too feel that BR is the only solution and have been thinking about it for about 12 mths now. The thought of it terrifies me but we cant go on the way we are, we are sinking fast. Our plan is to stop paying the mortgage and use that to pay for BR, it means going further into debt but we havent any other way of funding it otherwise. It would be good to share experiences and it may help us feel that we arent alone. . Our intention is like you to get through xmas and then for me to go bR first in Jan 12 and then hubby to go BR in Feb 12. I have done lots of research into it and taking heed of the advice about doing your homework beforehand, because of this I feel totally prepared now, scared but prepared.

 

keep in touch Saz and speak soon

 

Madge