Lots of Questions - Giving up? Long

saubryn · 9 February 2007 at 7:36PM

I've been in a bit of a mess debt wise for ages now. About 2 years ago I sook advice from National Debtline, the CCCS and Payplan, and they all said 'You just aren't earning enough to pay back your debts in a reasonable period of time, you should go bankrupt'.

I didn't want to do that - I was hoping that circumstances would improve and I'd be able to pay stuff back. In the mean time I went to the CAB, got one of those packs with income and expenditure sheets, got arrangements with the priority debts, and tried to negotiate with the others for token payments.

The thing is, after paying back £35 a week on the priority stuff, I have almost nothing left for the other debts (£1 a month each) - most of them refused my offers outright and the debts have been going back and forth between DCA after DCA and getting more and more charges added.

I've been having massive problems with housing benefit of late, and I saw the CAB about that today. When they were looking at my finances to check I actually qualified for housing benefit, they suggested bankruptcy again, and this time I'm almost ready to do it.

Unfortunately over the past 2 years my circumstances haven't really changed. My health is better than it was, but now my husband is ill and unable to work in an office. We're running our own business now, and we're better off than we were on benefits, but we're mostly doing it for the independance, not the money, and getting an extra part time job to raise income isn't really viable just yet.

I'm not sure if I'm just feeling low, and considering bankruptcy because of that, or if it really is the best option. I owe around 17000 at last accurate set of statements, and I'm only able to pay off around 1800 a year - thats a long time of struggling on a really really tight budget.

My questions are, assuming I did go for bankruptcy:

1)The business my husband and I are trying to run is just a partnership now, but would benefit credibility wise (although not financially) if it went Limited. Assuming I went bankrupt, I know while undischarged I couldn't be a director, but what about once discharged? If I go BR does that mean I can NEVER be a director?

2)I just got a Citibank account with a debit card, but no overdraft... does anyone know if Citibank would allow me to keep the account?

3)I still have rent arreers - they're showing as over £2000 again, but thats with 5 months housing benefit to come off, so it should actually just be down to £1000 now. Would going BR clear those, or mean that I would be likely to be evicted?

4)I'm reclaiming bank charges - if I did that just before applying for the bankruptcy and used that money for the fees, would I be allowed to keep the rest of the bank charge money? There'd be about £700 left over, and I was hoping to spend it on some equipment for the business....

I think I'm trying to talk myself out of going bankrupt, really, but on the one hand it will take several years of struggling to pay the debts off, and I'm not sure if we could live on nothing for that long - I thought we could, but right now there seems to be no end in sight

Any comments / thoughts much appreciated....

less2303 · 9 February 2007 at 8:20PM

1. Once discharged, and providing:

You are not subject to a BRO

Have not been placed on the Disqualifed Directors List (You would have had to been a director before bankrupty)

Then YES you can become a director.

2.With it being a basic account, you should be able to keep the account open, but it doesnt always happen, and I am aware instances in the past where these accounts have been closed, and that is why I always advise wating until after BR to be absolutely sure.

When you go BR you have to inform the OR of all accounts. The OR then informs each of them of the BR and it is at the banks discretion as to whether the account is closed or not.

It doesnt always happen, but does sometimes.

3. You can include your Rent arrears, but it might not go down to well with your Landlord!

4. No, as this money is technically from before your Bankruptcy, it will automatically become the property of the OR, regardless of if you receive it after BR.

No one can really tell you what to do, its a decision you really need to make sure you are happy with yourself.

saubryn · 9 February 2007 at 8:54PM

Thanks for your response.

We did form Limited Company on the advice of an advisor on a New Deal course, but never actually did any trading on that course. A few months after that I went on another, more in depth, course, which covered exactly what the different companies entail. They told us to just close that company down - I assume if the company never traded, or got into debt, and is closed down, that wouldn't get you on the Disqualified Directors List?

I didn't realise it was possible to exclude certain debts, that makes me a little more comfortable - as long we won't get evicted.

Shame about the bank charge money, but it makes sense I guess.... with the pressure off a bit saving up for the stuff we need should be possible, and a pleasure compared to throwing money into a never changing black hole.

Thanks for the advice - got a lot of thinking to do now.

less2303 · 9 February 2007 at 9:33PM

Sorry my reply regarding the Rent arrears may have been a bit misleading.

What I meant was that Rent Arrears are not excluded from bankruptcy, so you must include it, you do not have a choice of which debts you include and which ones you dont, they all must be included unless they are exempt (Certain Student Loans etc).

With regard to the disqualified Directors bit, if you go to the Insolvency Web Site:

http://www.insolvency.gov.uk/index.htm

...and follow the link `I am being/or have been disqualified `, you can search on yourself.

Lots of Questions - Giving up? Long

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