Should we go bankrupt?

[JNJL]

Hi all,

 

I am new to the site but am amazed by all the fantastic information. I only wish i had discovered this site a few years ago!!!

 

My husband and I are in a financial mess, we have debts of around £70000, a big chunk is due to my husband fighting a residency case for his children (whole different thread!) and then his ex wife went bankrupt last heaping a load more debt onto us etc etc etc

 

We have managed to agree payments with nearly all of our 11 creditors and keep hold of the house and the car but my husband is in property maintenance and we are struggling and are now 3 months behind on the mortgage and the car, we are now not going to meet the payments to our creditors this month and here the snowball affect starts!!

 

My question is - is it worth all the stress, worry and struggle to maintain the house and avoid going bankrupt. It is a constant battle to get food, petrol to get to work etc but i take it if we go bankrupt they will definately take the house? Is it better for us to sell the house, the mortgage company are ok at mo but i don't know how long until they start proceedings?

 

Any help would be gratefully received, CAB were rubbish and payplan just took one look at us and yold us to go bankrupt as we are both self employed

[gizmo111]

It is not definite you will lose the house in BR. Have you any equity? Without the other debts could you afford to keep the house realistically on your joint earnings.

What are the debts? How much and in whose name?

 

More info here http://www.consumeractiongroup.co.uk/forum/formal-solutions-bankruptcy-administration/56970-insolvency-dealing-debt.html

[palomino]

The situation with your house depends to a great extent on whether you have equity in the property. If not then the Official Receiver would not be interested.

It also depends on whether you can pay your essential bills - Council Tax, mortgage etc. - with what you are earning at the moment. If so then you have to consider not paying the non-essential bills like credit cards etc., and making arrangements with each one to make much reduced repayments.

 

Bankruptcy is certainly an option but it is a major step and will affect your life for some time. You need to get lots of advice (coming here is a great start).

You can obtain advice from -

- Citizens Advice Bureau

- National Debtline - National Debtline – Free, Confidential Debt Advice – Call 0808 808 4000

- the Government's insolvency service - The Insolvency Service Website

[JNJL]

We have had a couple of valuations for the house and they have com eout at about the same as what we owe on the mortgage as we have only had the house around 18months. Many of the loans are joint loans and are all personal loans/credit cards. We are up to date with council tax/utility bills etc and would be able to afford mortgage and household bills without debts.

 

We would rather sell and get a better price than allow the house to be repossed and then go into rented and then both file for bankruptcy.

 

If we did do that and had some equity left over from th ehouse sale (by some miracle) what would be your advice on what to do with it i.e pay some debts off?

 

Obviously in an ideal world would like to keep house as children settled but would we be able to rent with poor credit and what would happen if we in rented as i understand they will tell the landlord?

 

advice greatly appreciated

[gizmo111]

As you have no equity then if you feel BR is the right way to go then there is nothing stopping you. You will need a 3rd person to buy your share of the equity for a nominal sum.

Have you sought independent advice?

[JNJL]

We have had some advice from CAB who suggested we go after my husbands ex-wife to get her to cough up some money towards the debt - be easier to fly to the moon!!! They suggested to get our creditors to agree to a reduced payment which we did but we just continually feel like we are robbing peter to save Paul. My husband is self employed and it is very difficult to predict his income especially in this current climate.

 

Payplan said after looking at all our figures about 2 years ago that we should just go bankrupt as we can't get an IVA as self employed, we have managed to meet payments since then until now. Christians against Poverty can't help due to us being self employed so feel we have pretty much exhausted all options?

 

Thats why this site is so great to hear peoples views that have been through the same experience and have got real advice to give!

 

If we did go bankrupt, my husband has his own business, he is a sole trader - will he have to cease trading??

 

Last question would you say that it is less of a risk to sell house, rent somewhere then file for bankrutcy or keep house, file for bankruptcy and hope that the Official receiver will let us keep the house? appreciate difficult to answer

[palomino]

If we did go bankrupt, my husband has his own business, he is a sole trader - will he have to cease trading??

No - he still has to work!

 

Last question would you say that it is less of a risk to sell house, rent somewhere then file for bankrutcy or keep house, file for bankruptcy and hope that the Official receiver will let us keep the house? appreciate difficult to answer

 

It depends : do you have any equity in the property?

In general if funds can be made available from selling the property then that may happen. If not then the OR won't be so interested.

Every case is different and you have to discuss this in detail with the OR at the time.

[Lula]

I am not sure and I am sure that someone will correct me, but if you have joint debts and one of you go bankrupt, then the creditors will persue the other creditor for the full amount.

[JNJL]

Yes we were advised that so understand that both of us would have to go bankrupt or we would be no better off?

 

Would probably be a maximum of £10000 equity depending on what we could get a sale for? who does the valuation for the house is it the OR? We brought house for £189000 with a mortgage of £170000 but valued by estate agent at about £170-175000.

 

Does anyone think we would be better to sell house and go into rented?

[Lula]

I would decide what you wanted to do first of all and then have a chat to the OR

[gizmo111]

What are the rentals like in your area?

Can you afford the house without all the other debts? bearing in mind you may have to pay an IPA for 36 months after BR?

Have you anyone who could buy your beneficial interest for a nominal sum, plus legal fees of a few hundred?

Can you list debts - his hers and joint?

Do you want ot stay in the house?

[JNJL]

Rentals are from £650-£850 and our mortgage is £968.11, plus they now want an extra £200 per month until the outstanding arrears are cleared. We could probably keep house on without debts but again that would depend on what OR want over 3 years?

 

May be able to ask parents about buying beneficial interest - how does that work not quite sure i understand?

 

Debts are:

Me:- £6000 on cc's, £2100 on store cards, £9500 loan

Joint:- 3 joint loans average £10000 each

Husband:- £1500 solicitors, £6000 loan, £2300 CC

+car finance £230 per month

 

Ideally would like to stay in house but if easier and it means we can start afresh then renting would be an option, we are just worried after reading somewehere on here that if we rent and then go bankrupt the bankruptcy can automatically terminate the lease - then we would be homeless and i doubt very much we would get much on the council waiting list around here and didn't really want to go down that route.

[gizmo111]

Ok - the amount you pay the OR is determined after you essential expenses mortgage and arrears would be one of those - when they are paid then the OR would probably want an increase of around 60% of the £200.

There is more info here re the benficial interest.

 

If you were privately renting the OR does not terminate the lease, he just informs the owner/agent and it is up to them if they terminate the lease because of your BR. Not many do as all they want is good tenants who pay on time. Some discussion about this here.

[JNJL]

THANKS Gizmo111

 

The decision to go bankrupt is a really difficult one to make - I'm sure once we have made it we will feel more positive about things it just seems a really scary prospect.

 

Just a had allied international on the phone, used some info from here and it was funny to see how upset he was getting with me when i refused to jump through his hoops!! THANK YOU!! no longer worried about picking up the phone.

 

He has threatened they will put a charge on the property if we do not pay the lump sum they have asked for - can they do this or is it only the judge? and is it a first come first served basis as what about all our other creditors?

[gizmo111]

He has threatened they will put a charge on the property if we do not pay the lump sum they have asked for - can they do this or is it only the judge? and is it a first come first served basis as what about all our other creditors?

 

They have to go through court first - but you would be wise to go BR asap before they get a chance to do this.

[JNJL]

sorry so many questions - what happens to the debt if they put a charge on the house, we sell house and there is none or not enough equity to pay them?

[gizmo111]

If it is after the BR then you are still liable for the debt - best to get all debts included in the BR now.

[JNJL]

Hi all

 

Update on situation, I have sent all of our creditors Subject Access requests, one already sent letter back saying they are now taking us to court. I have had to agree a payment plan with mortgage company of normal monthly payment plus an extra £200 per month towards the arrears which considering we can't even make normal monthly payment is a bit of a joke sonot sure what they will do when we don't make that this month?

 

I have spoken to the financial helpline today, who were really helpful but very straight down the line. Within a 20min conversation today there advice was to find somewhere to rent ASAP, move out of house, and then send the keys back to the mortgage company for repossession and then declare ourselves bankrupt and in the meantime not to pay a penny to any of our creditors or the mortgage?

 

Does anyone have any advice to offer here - seem to be going around in circles?

[gizmo111]

Update on situation, I have sent all of our creditors Subject Access requests, one already sent letter back saying they are now taking us to court.

 

What do you hope to acheive from the SAR's? Areyou hoping o claim back charges? Do you think you have a large amount to claim?

I have had to agree a payment plan with mortgage company of normal monthly payment plus an extra £200 per month towards the arrears which considering we can't even make normal monthly payment is a bit of a joke sonot sure what they will do when we don't make that this month?

 

What are you hoping to happen to the house? Without the unsecured debts could you realistically afford to catch up on the arrears and make the monthly payments, bearing in mind you have negative equity which could take quite a few years to turn around?

 

I have spoken to the financial helpline today, who were really helpful but very straight down the line. Within a 20min conversation today there advice was to find somewhere to rent ASAP, move out of house, and then send the keys back to the mortgage company for repossession and then declare ourselves bankrupt and in the meantime not to pay a penny to any of our creditors or the mortgage?

 

Does anyone have any advice to offer here - seem to be going around in circles?

 

Which financial helpline? It all depends on how realistic you keeping the house is. If you are sure BR is the correct way to go then definetly don't pay anything ot anyone - you need money saved for a deposit and rent up front and the the BR fees,

[JNJL]

We have sent SAR's because we definately have a few thousand pounds of bank charges to reclaim, we did manage to get them back from Natwest before they went to court but others have put on hold, after reading on here we understand we may be able to get some back no wif we have a case for hardship?

 

Also we have been passed to that many DCA's we wanted to see what we have paid, current balances etc because no one will give us them.

 

Starting to realise that we may not be able to catch up on mortgage, although only two months behind with all this snow that has meant my husband has had no work again!! its a spiralling situation!

 

What are the chances of getting somewhere to rent through an estate agent with a bad credit rating? if we can't get anywhere to rent then what options do we have?

[gizmo111]

We have sent SAR's because we definately have a few thousand pounds of bank charges to reclaim, we did manage to get them back from Natwest before they went to court but others have put on hold, after reading on here we understand we may be able to get some back no wif we have a case for hardship?

 

How much difference will this make to your arrears? What sort of dent will it make in your debts. Yes hardship is a possibility, but if you are still choosing to go BR then there is no point in claiming.

 

Also we have been passed to that many DCA's we wanted to see what we have paid, current balances etc because no one will give us them.

 

They should give you balances - how many debts do you have and what are the balances? (Sorry if you have told me this somewhere else)

 

Starting to realise that we may not be able to catch up on mortgage, although only two months behind with all this snow that has meant my husband has had no work again!! its a spiralling situation!

 

Has he claimed any benefits? Are you repayment mortgage?

 

What are the chances of getting somewhere to rent through an estate agent with a bad credit rating? if we can't get anywhere to rent then what options do we have?

 

You may need to put down a bigger deposit of a few months rent. Yo ucan save this by not paying anything to your debts.

[JNJL]

How do you guys cut and paste?

 

Debts as follows:-

Joint Sainsburys £11500 (court letter received tday)

Joint Natwest £9000?

lloyds Joint £8500

Lloyds me £5800

Lloyds CC me £4000

Cahoot Loan me £3700

Cahoot Loan hubby £5800

Cahoot CC me £2000

Sainsburys CC hubby £1800 (CCJ)

Next me £1000

Midland Bank hubby £7500

Solicitors hubby £800

 

Car Finance £230 per month (1 month behind)

Mortgage £968 per month (£1900 in arrears)

[gizmo111]

How do you guys cut and paste?

 

Do you mean cut and paste or quote?

 

Debts as follows:-

Joint Sainsburys £11500 (court letter received tday)

Joint Natwest £9000?

lloyds Joint £8500

Lloyds me £5800

Lloyds CC me £4000

Cahoot Loan me £3700

Cahoot Loan hubby £5800

Cahoot CC me £2000

Sainsburys CC hubby £1800 (CCJ)

Next me £1000

Midland Bank hubby £7500

Solicitors hubby £800

 

Car Finance £230 per month (1 month behind)

Mortgage £968 per month (£1900 in arrears)

 

I make the debts 29,000 Joint, 16,500 You and £15,900 hubby.

Is the car loan HP?

Is the mortgage interest only or repayment? What sort of deal have you got?

What is your joint income?

[JNJL]

Sorry quote not cut and paste.

 

Car is on HP with welcome finance, about another 18months to go.

Mortgage is interest only on a self cert. mortgage, fixed in until 1st June on about 6.75% otherwise early redemption penalty of £10500. Estate agents said to put on market between £189000 and £199000, our mortage is £170000 but realising that price in this market probably no chance??

 

Joint income was about £3000 per month, but i took time out to have our 2nd child and do a degree so am only working part time and my husband is in property maintenance which was still bringing in around £2500 until Nov and may pick up end of Feb as usual but may have to face the fact it may not in this climate - had barely any work since christmas?

 

Debtline told us we can't get any help with mortgage until been unemployed for 40 weeks???

[gizmo111]

What happens to your mortgage rate after June 1st?

How much are you paying to unsecured debts?

When you say court letter received t his morning, what exactly does it say?

Are any of this debts got a CCJ? Or a court date?

 

What do you want to do.......... by that I mean how important is the house to you?

Because even if you choose BR you may well be able to keep house.