A Free Bankruptcy, IVA And Simple IVA, Insolvency Advice Forum

[big rossatron]

Hi,

I'm a new user, just registered, first post.

I've been reading a little about bankruptcy/IVA and I'm looking for some advice.

I'm currently struggling with repayments on credit cards (circa £16k) and a £2k overdraft, my car costs me £340 a month and is in about £3.5k negative equity (worth £9k owe £12.5k on finance) and I'm spending about £400-500 a month more than I have coming in. up until this point my girlfriend has been supporting me and I've been living rent free and eating her food for around a year as well as her making up the difference for me with dinners, petrol etc.

I just got served notice at work that my job is being made redundant and I'm currently in consultation with my employer, that was the last straw in our relationship and my girlfriend is kicking me out so I'm contemplating moving back in with my mum which at 30 is a big dent to my ego.

I want to do right by my girlfriend/ex and we've worked out I owe her around £12-13k up to this point, if i take out an unsecured personal loan for that value while I'm employed then give her the money and file for BR after I'm redundant will they chase her for the money?

I have little in the way of assets, we live in rented accomodation but that's kinda irrelevant as I'll be moving in with my mum right? i have an amp and speakers, an xbox, a few games and dvd's and some clothes...possibly a tv, it's not decided yet, if i take that stuff to my mum's is it fair game for them to take it? I contemplated leaving it at a friends house and saying I left with nothing?

I really don't know what to do...any information you can give me would be greatly appreciated?

[Hg]

Hello

Unfortunately this is a bit of a no go.

Any new borrowing at this stage is demonstrably wrong even based on what they can work out of your situation (eg the income deficit). They'd also likely pick up on the fact that you must have known about the redundancy in advance and put two and two together there too.

They'd definitely ask for the money back, and they'd also more than likely apply for a bankruptcy restrictions order against you, which would extend the period of the restrictions of bankruptcy for probably something between another 5-10 years (more like the 9 or 10 if they picked up on you knowing about the redundancy, which would make them call obtaining the loan dishonest).

They would say that you had incurred credit with no reasonable prospect of repayment. They would also say that you had entered into a preference (if they accepted you owed your ex money) or transaction at an undervalue (if they didn't). If they picked up on the redundancy they would also say that obtaining the loan for this purpose was quasi fraudulent.

Additionally, to make yourself bankrupt you'd have to answer two questions that directly ask if you have done anything similar to this. If you tried to conceal that you'd given her the money, this would be an offence.

The good news is that they wouldn't touch any of the belongings you mentioned, so there's no need to try and pretend you left with nothing - you'd just call it household effects on the form and put the estimated second hand value, which would be very little.

[big rossatron]

this may be the wrong place to post this but since i already have a thread i figured i'd reply here.

my girlfriend and i are making a go of it (for now) my money has effectively ran out, my job has gone and i put in a claim for JSA. i've spoken to all the people i have unsecured loans with and notified them of my situation, canceled all my direct debits and spoken to a company called payplan...currently looking for work and hoping i can find something before i default on all my debts. i'm also voluntary terminating my car which free's up more money a month.

im hoping it wont come to bankruptcy but i feel its only a matter of time before i get taken to court for payment and i'll have no option.

both my girlfriend and i have seperate accounts and the rent is in her name but we live together, if i go bankrupt is her credit rating affected and are her posessions up for grabs? how do we determine what is hers/mine/ours? i will have no car, we have no house and i have no income...how does it all work? what will they take?

[Thomas]

Hi Big Ross

I think HG has already answered some of your questions in response to your last post but you still seem worried about things so I will try and help...

From what you say, your girlfriend is the tenant so you are officially her lodger and from a default/credit rating point of view thats probably how she wants it - i.e. no financial connection. If you do default or go bankrupt she should make sure that this is made clear to the credit reference agancies.

You could allow your creditors to obtain CCJs which would have to be paid but the court will only order an amount you can afford following an enquiry into your means. If you decide on bankruptcy your girlfriends property cannot be touched and, as HG has already implied, the OR will only be interested in any of your property that will fetch real money such as antiques or a decent car but from what you say, you have neither.

You have spoken to Payplan so what do they recommend? Have you taken any other professional advice. Have you spoken to MYVESTA? Bankruptcy would clear the decks of debt but its effects can be long lasting in respect of getting future credit/mortgage etc - the inevitable "have you ever been made bankrupt or come to an arrangement with your creditors" sort of questions.

If you do decide on bankruptcy, this is how it works:
You have to find the bankruptcy fee in all cases but if you are on JSA or similar benefit the (separate) court fees are likely to be remitted - phone your local county court and ask them.. Ask them how long any waiting list is, make an appointment for a hearing and complete the relevant bankruptcy paper work - collect a package from the county court or do it on line, allowing yourself a few (or more...) days to collate all the answers. The actual hearing takes about 3 minutes! Take your girlfriend with you for moral support if you wish but its nothing to worry about. You go in and sit before a judge in civilian clothes. He asks if you want to be made bankrupt, you say 'yes', he glances at the clock, writes the time on the form and out you go into the reception area to await return of the forms he has just rubber stamped. You then make an appointment to see or speak (telephone) to the Offical Receiver - it wont be the man himself but one of his staff called your 'examiner'. I had a personal interview and took a friend as an observer for moral support but, again, it is no big deal as long as you are straightforward with the guy. They are hearing it every day and its probably a pretty depressing job.. You will be bankrupt for a year and then discharged without restrictions - unless you do something like you mentioned in your first post and which HG strongly advised you against.... I know it is easy to say 'dont worry' but it is not the scary procedure that we all imagine it will be because we have never been down that route before nor possibly know anybody else who has.

Your biggest problem may be getting the bankruptcy fee together but (once you have decided BR is the right route for you), the quickest way round this is to STOP paying creditors and use that money!
Thomas

[Hg]

Hello

You also don't need to be panicked into action just if someone does go to Court (which is unlikely if you keep in touch with all your creditors through a reputable organisation).

In a sense a CCJ could be the best thing that happened to dealing with an awkward creditor, as if you got to court and tell them what you can afford and give them details of your income and expenses, they will not make an order that you can't afford. If you can afford to give then £1 a month, that's what they'll order.

I would say your main thought needs to be about the relative effects of debt management v formal insolvency.

With bankruptcy you will be clear of debts in an instant, ready to start again in 6 years, but having to say "Yes" if someone says "Have you ever been insolvent" on a mortgage application.

With debt management you avoid the very long term effects of having been insolvent, but the short term effects could be worse, and last for more than 6 years. (eg if if took you 4 years to sort your accounts out, defaulted accounts would show for another 6 years after that).

[big rossatron]

well i decided to go for it, i was looking at paying someone to represent me in court and fill ou tmy forms but i decided to go it alone.

i went to the court, collected my forms and made an appointent for the 26th (a week away) do you think that'll be long enough to fill out all the information? ill keep this thread open to ask any specific questions, the only thing im worried about (at this point) is my income vs expenditure account, i was told that i can only claim up to a certain amount for food etc but i dont know where i can get this information from...does anyone have a link that lists what i can claim for towards shopping, holiday, repairs and maintenance etc or somewhere i can find the information please?

PS - wish me luck? lol
Ross

[Hg]

Hello

Doing it yourself is probably a good call.

Ultimately, the information you'd have to provide to someone else to do it for you is exactly the same as to do it yourself

A week should be plenty of time. While it makes it easier for you the better they are done; there's nothing there apart from your name and address that are so vital that you can't hand the forms in without it or with an estimate.

What are your numbers for expenses looking like?

I'll wish you luck if you want, but there's probably no need. I know it's impossible for you to believe this until after it's finished and you're wondering what all the fuss was about, but you've most likely got far better things to worry about than the bankruptcy!

[Thomas]

have a look at the numerous posts from member PISTON BROKE. 12-18 months ago he compiled an extensive list of expenditures which were accepted by the OR. Might not be a good idea to talk about allowances for a holiday at this delicate time! Presumably the cost of such would be expected to come out of your half of any excess income... You must know what you spend on food each week so put that amount down. It is not a case of an amount being claimed 'towards' your food but the actual amount being spent. Presumably you can recall what you have spent on repairs, dental treatment, haircuts etc over the past couple of years.

[big rossatron]

thanks guys ill have a look for those posts. i have a pretty detailed income vs expenditure account on a spreadsheet already, my creditors asked for this when i canceled my direct debits. i also have a list of everything i owe as of 26/07/2009 and to whom, somehting else my creditors asked for.

the only reason i asked is because when i was talking to a company about filling in my forms they told me i could only claim a maximum of £280 for food shopping per couple and £75 for each child. we have an 8 year old and our food shopping bill is £653 including toiletries) but i was told if i recorded any more than £355 my forms would be rejected and i would have to reapply for bankruptcy and pay the court fees again and thats why it was better to pay them to do it, because they know the system. i cant get the £300 together for them to fill out the forms though so i was hoping to find a list of what i could claim for. i know to the nearest £5 what I'm spending a month.

Regards,
Ross

[Thomas]

Seems to be a slight misunderstanding.. Didnt quite understand the mention of paying "them" £300 to do it for you. If you mean a third party wants to charge you £300 to do the paper work for you, as if preparing an impressive CV, DONT pay that - they are trying to make money out of desperate people by creating problems that dont exist! As HG has pointed out previously, the result will be the same.

You pay the court fees when you make the apointment and submit the paperwork. But if you are on any state benefit the court fees could be remitted. The actual bankruptcy fee (the 'deposit') is payable in all cases and, ironically,that is the cost that a lot of people find difficult to find in order to be relieved of greater debt..

Following your hearing it is the OR who will deal with your income/expenditure and he/she will have had plenty of experience to know what is the norm. Since you have children, unless you are well off (and I assume by definition you are not...) you are talking about 50% of any 'SPARE' income that the OR would want to take. He does not take every penny over and above your essential expenditure... What you spend the other 50% of 'spare' income on is up to you and this could be your 'holiday' fund if you so desire.

Stay well away from any organisation that wants to charge you a fee for 'help'. The one you have spoken to has already given you mis-information. If you DO want more help, phone MYVESTA on 0800 1116 885. That is what they are there for.....

Let us know how you get on

Thomas

[Hg]

The idea of your forms being rejected if you state excessive expenses is nonsense; it couldn't happen. They're just trying to instil fear to get money out you. Their figure is also nonsense; 2 adults with no children could claim £400 without it being queried even over a year ago.

There is a published figure for average expenses, which is often used as a kind of benchmark. I don't like to give it too much credence as the thing about the average average is that it is a made up number that potentially applies to nobody.

I'd suggest that to me personally £335 seems very low, but £685 does seem a bit high unless you are able to explain it with relation to your particular circumstances. Of course if you live in a rural area or central London, then I'd expect the figure to be quite high...

[big rossatron]

thanks guys...that was the only thing i was worried about.

I'll just go ahead and fill out my forms then from my Income/Expenditure that I've been issuing to creditors.

we don't live in London...I play semi proffesional basketball and take fitness pretty seriously. i eat 7 times a day and cook everything from scratch with fresh ingredients...lots of chicken, fish, steak...it all adds up. if they do try and argue tit for tat or take money from it ill just say we smoke to try and claim some back lol

in all seriousness though i could probably trim some off of that if i had too, we've already cut back to minimize expenses while im out of work...I'm sure i could knock a bit more off if it came down to it.

thanks for all your help, i'll keep you updated with my progress on form filling and court hearing etc.

Ross

[Thomas]

You've just said you are unemployed. That means you can probably get the actual court fees remitted. Ring the court and ask what documentary proof they want. Jobseekers paper work? That could save you quite a bit of money.

[big rossatron]

i did start to look into that thanks...I have a booklet EX160A but i was told depending on what type of JSA I get (income or contribution) i may not get it, I'm on contribution based and I think the one that sdoesn't qualify

Ross

my girlfriend is new to forums and wanted me to post this smiley lol

[big rossatron]

guys,

i got a question relating to the forms im filling out.

question 6.7 "how much do other members of the household contribute each month to the household expences?"

in this figure should i include their expences eg, car loan, petrol, mobile phone bill etc as it's the "household expences"??

i have a few other questions relating to the debtors bankruptcy petition but ill get to those another time.

cheers guys,
ross