Should I go bankrupt ... again?

DawnMcUK · 23 October 2017 at 1:22PM

Hey, I'm in a situation that is complex and stressful so need some help and advice where possible. As background, my husband and I were declared bankrupt in 1997 and discharged in 2000, where we lost our home, relocated and got on with life.
Now, I find myself in a tight spot and don't want to admit I can't cope, and go back to having no control.

Anyway, we both got good jobs and bought another house in 2003, but in 2007 our world ended when our only child died suddenly aged 16. We both left our jobs as we couldn't cope and very soon my health deteriorated to the point where I am now disabled and my husband is my carer. The house (no longer a home) became my prison, with adaptations Etc., to help me but we neglected it and it is in need of a lot of cleaning and repairs that we just can't do. We are living solely on disability benefits but our credit file was now healthy and we began to apply for credit cards, catalogues etc. In the meantime we applied to the local authority for a bungalow. After 2 yrs on the list we finally acquired a housing association bungalow and moved out of our house on 10th September. However, our spending on cards is getting out of hand, using them literally for food and living costs as our benefits only really covered mortgage (which I've stopped but now pay rent) and insurances, utilities, and of course, credit - with 7 credit cards (minimum payments), 2 loans (never missed payments) and 4 catalogues; with only 1 credit card that we can't always pay the minimum on.

We now want to hand the keys back to the lender but after reading the forums, are worried about financial liabilities as we doubt the house in its current state will sell for what we owe. So, my main question revolves around bankruptcy again. If we file for bankruptcy again, do all of our liabilities become part of it, or can we retain one or two cards or catalogues for contingencies and unforseen expenditure? Will it affect our tenancy and things like tv provider, current insurers, utilities, our bank etc? The house is empty and unfinished and the council tax are awaiting a letter from the lender before closing the account. I'm still paying home insurance but haven't told them I've moved yet ... I wasn't sure what to do!! Can anyone please advise me?

sourcrates · 23 October 2017 at 2:12PM

Hi,

After going through the process once, i`m sorry you find yourself in that position again.

All your liabilities are included in bankruptcy, you cannot keep one or two accounts open, it does not work like that, although the process now is a lot easier and smoother, than back in 1997, most of the restrictions and rules remain unchanged, however, its now all done online, over the phone, and by post, there is no longer a requirement to attend court.

You would need to formulate a budget to live on, so you don't need credit, well you wont have access to it anyway, your bank account will be frozen, so you will need to arrange for another account to be opened, usually a basic bank account, which allows no borrowing, its best to wait until the bankruptcy has been formally approved before doing this, otherwise it will be frozen too.

You would need to remove cash from your account to cover day to day living expenses whilst the bankruptcy is going through.

You don't say how much you owe, but if you have a potential mortgage shortfall, it may be a substantial amount.

Most insurances/utilities etc should be ok.

Have a look at the bankruptcy section on the National Debtline or Stepchange website, make sure you get some proper advice from one of those agencies before you commit to anything.

DawnMcUK · 24 October 2017 at 4:01PM

Thanks for the reply, our biggest quandary is that we are not in arrears with current bills and have no ccj’s, but like most people, just about live within our means. What scares us is the potential burden of negative equity and being saddled with a huge liability from that ... or that they could force us into bankruptcy. I really don’t want to have the bank frozen and go through that again, but don’t know what options are there if the voluntary repossession leaves us in an untenable position.

Would an IVA be a less devastating course of action?

Thanks again.

silvercar · 24 October 2017 at 5:08PM

So sorry for your loss and for your subsequent bad health.

Stop paying for the house. Hand the keys back and wait. Eventually the lender will sell it. At that point the lender will start talking to you about a settlement. Lenders know they can't get money if there is none. It is not in their interest to make you bankrupt.

You will provide the lender, when asked, details of your income and expenditure and they will agree an affordable repayment plan. As long as you don't commit to something you can't afford you will be fine.

DawnMcUK · 24 October 2017 at 8:00PM

Sounds simple enough! Thanks for such a forthright answer. I think I will stop worrying, as stress flares some of my conditions, and wait and see what transpires. Thanks.

Should I go bankrupt ... again?

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free