My story - very much appreciate advice

JimmyBlack

Relationship break-up, gambling, loss of job and subsequent compounding issues (stupidity, interest, bank charges etc.) all contributing to my situation - idiotic i know, so this doesn't need clarifying please.

after hiding for a while, but now being threatened with a statutory demand under the insolvency act 1986, i've decided to face up to my situation and stop the dogs barking. i owe about £17.5k to business creditors and about £10k to family and friends. obviously my priority is to pay back family & friends first but i understand that my priorities are discounted in my position. the way i see it i have 2 options; IVA or bankruptcy. I'd like to get out of this mess as quick as possible and start afresh; or at least as fresh as the law allows.

i have researched both options but still have questions so think it is best i contact the debt helpline or like, although would like the forums views too - as many of you have been through similar.

i am working, live in rented accommodation and have no tangible assets so am thinking bankruptcy may best option for my position? the only downside i can see is losing the little bit of pride i have left (not easy for a leo) and finding a new bank account for my salary.

i'd be happy to take on board any advice from the forum - thanks

dalip

Jimmy If you decide on bc then the money you owe family will be included in your bc.You must treat all your creditors the same,preferential treatment to creditrs is frowned upon big time by the OR. If you decide to pay back family after bc with any surplus income is entirely up to you.

Until we know your i&e we can not make suggestions. Generally speaking bc is for those without assets to protect like a house.

If you post your specific questions we will do our best to answer them as we see it. Only you can decide which course to take and you are doing the right thing by one facing up to it(big step so fair play to you)and getting as much info as possible in order to make that decision.D

blueopal5577

I personally would go bankrupt. My usual response when people ask is its up to you and it is your choice. However, if you're looking for a fresh start, and since youve already had a statutory demand so probably past period where they'll accept "i can pay you £1 every 2 months" type thing.

I asked about IVA and BR at CAB and was told they are both similar in their effect on your credit rating and so on. People tend to opt for IVA's if they want to make sure that they dont lose their house or certain assets. Since like me youre renting, the CAB said they dont advise IVAs. (Please be aware this is what I'm told / my opinion and youve obviously got to make the decision right for you)

A new bank account is no problem, although it obviously wont have an overdraft facility. Co-op, natwest and barclays offer accounts to bankrupts. If you do file BR, try to get a date (if possible) after pay day. Before you file, remove the money in your account because once you go BR, your 'assets' belong to the OR and banks often close your account.

Talk to the debt charities. Although it feels awful, your debts are only £17,000 to those not family or friends. This feels huge (My BR debt is less) but if its not an avenue you want to go down, you need to deal with the statutory demand promptly... it wont go away. (I've buried my head for years so I know how you feel)

Information on how to deal with it here: http://www.insolvencyhelpline.co.uk/legal_issues_explained/statutory_demand.php

The debt is not so large that you could not pay it back if thats the route you want to go. Equally if you need a fresh start and the debt is making you stressed, ill, or you can't foresee you being able to pay it back, BR is a good choice. My debt is similar but the stress has made my illness worse, and its been 5 yrs of hell and I need BR to save myself.

Talk with the CAB, if you just cant face dealing with the letters and calls. Get them to deal with it, they can direct all your creditors to contact them on your behalf. They could also negotiate stopping of interest and a reasonable payment plan.

Depending on your income, if you DO wish to go BR, it may be worth letting them do it... it costs approx £485 to go BR but contact the CAB to help you go through the process. This may increase the risks of a BRO where the restrictions of bankruptcy are applied longer than you would usually. At present you're normally discharged after 1 year, if you don't co-operate with the OR (if BR was filed by someone else) that would be a reason to extend your restrictions.

Anyway, im over loading you. My opinion? BR over IVA as similar effects and since you have no assets, BR would be an immediate clean slate since you're likely stressed by the situation. Pride? Dont worry about it, more common than you'd ever think, and you tell me a person who hasnt screwed up something in life. Anyone who judges youve got to remember they'll have either cheated, stolen, abandoned... someone or something.

Good luck and keep us updated. Also www.insolvency.gov.uk has lots of information and you can fill in the forms gradually online so you're not overloaded - theyre a lot less scary than I thought!!!

JimmyBlack

Thanks for the quick response Dalip

ok, some of my questions, as succinct as possible.

1. as the debts to my family and friends are handshake debts do i need to declare these? i'd rather keep this matter as private as possible. they are not chasing me for money.

2. i do not have any assets ie. property, car, savings etc. i do have a tv and computer but that's it. will i get a visit from a receiver to take an inventory and if so can i choose when they come? - i have flatmates that i'd rather not know. or am i kidding myself?

3. i don't pay rent to a landlord but to my flatmates as i am not on the rental agreement. as this is the case i'm not sure if i can claim regsitered homeless?

4. once declared bankrupt i understand my bank and any assets are frozen. if i manage to open a new account following this to receive my salary what happens to it? does the OR take it all or do i continue as normal but covering any payment agreement?

5. i guess the main question though is what procedure can i expect from going bankrupt?

lot's of questions i know and there's probably many more. thanks in advance for the effort extending in responding - jimmy

dalip

JimmyBlack wrote: »

Thanks for the quick response Dalip

ok, some of my questions, as succinct as possible.

1. as the debts to my family and friends are handshake debts do i need to declare these? i'd rather keep this matter as private as possible. they are not chasing me for money.As i said if you can pay out of any surplus you have left after a possible IPA then thats up to you. In black and white yes you should put these debts down,but if you are sure there is no way the OR would find out then that decision is yours;)

2. i do not have any assets ie. property, car, savings etc. i do have a tv and computer but that's it. will i get a visit from a receiver to take an inventory and if so can i choose when they come? - i have flatmates that i'd rather not know. or am i kidding myself?No the OR does not visit,they rely on your honesty.

3. i don't pay rent to a landlord but to my flatmates as i am not on the rental agreement. as this is the case i'm not sure if i can claim regsitered homeless?Why would you want to claim that?. You can live wherever you want. If you have proof of paying rent ect(via bank statements) and explain you do not want your flatemates knowing the OR may not tell them,but i can not promise.

4. once declared bankrupt i understand my bank and any assets are frozen. if i manage to open a new account following this to receive my salary what happens to it? does the OR take it all or do i continue as normal but covering any payment agreement? The OR has no interest in any bank accounts opened after bc,in fact many open bank accounts before bc.Make sure it is a basic account. Both co-op and barclays are bc friendly. The OR takes a % of your surplus income after all household bills ect are covered.

5. i guess the main question though is what procedure can i expect from going bankrupt? ?Not sure what you mean.lol

lot's of questions i know and there's probably many more. thanks in advance for the effort extending in responding - jimmy

No worries you keep asking. BC is a big decision to take and the more you know about the whole thing the more sure you will be of your way ahead.D

JimmyBlack

ah forumites! i think you've answered my main concerns and all with 10 minutes - thankyou very much.

the way i understand it -

i apply for bankruptcy.

creditors stop trying to contact me.

i get a court date

i ensure i remove any money in my account prior to this date
my account is frozen.

i apply for a new account or maybe as i bank with natwest they can find a banking solution

i have an interview with an OR where i provide an IE, obviously stretching it as far as possible :P

i pay an agreed amount from my surplus for (3?) years.

no-one other than me needs to know (apart from nosy newspaper readers and credit reference agencies).

i can pay my family back with the money i'm left.

i should be discharged within a year and i can get on with my life

my credit record is ruined anyway so i can't see how a bankruptcy can add substantially to that.

looks likes happier days are on the horizon - why didn't i look into this earlier

thanks again!

Champagne_2

Hi Jimmy I know how very difficult things can become when you're faced with a mountain of debts and have no idea where to start looking for help. Without going into too much detail, after facing up to my situation I realised I couldn't continue to live of my credit cards and had to seek professional help. This is where I think I can offer good advice, getting the right professional help is essential to solving your problems. There are so many sharks out there keen to make a buck from your misfortune. I spoke to the Consumer Credit Counselling Service (CCCS) who went through my income/expenditure with me and at the end of the call we determined the debt repayment plan wasn't for me. They recommended KPMG (Scottish branch though may have offices all over UK) to me and set up a call to go over my options. Within the space of a few weeks, we decided to go for the Trust Deed option (Scottish equivalent to IVA), this has since been granted 'protected' which means my creditors can take no legal action against me. Whilst some may view this as an easy option it's not. I voluntarily gave up my home and my trustee will take half my income for the next 3 years which means most of my creditors will be paid a large fraction of what is owed and I will be debt free after this time. I can't recommend KPMG enough, they expertly took control of the situation and didn't judge me. I kept my dignity and for the first time in years I can sleep with ease and it's great to know that I can plan for future once this is all over with. I'm more than happy to help you if I can as it's a minefield out there and looking back, I think the key is to find the right organisation who aren't out to profit from you but have a genuine interest in getting you on track.

dalip

JimmyBlack wrote: »

ah forumites! i think you've answered my main concerns and all with 10 minutes - thankyou very much.

the way i understand it -

i apply for bankruptcy.You ring your local court find out the system they operate,some are drop ins,others appointment. When you ring you will be given a date usually here and then,if the do appointments. Also check how many copies of your SOA they require as this too can vary from 1-3.

creditors stop trying to contact me.This may take months after bc. You OR is required by law to contact all your creditors within 8 wks of your bc date.
i get a court date

i ensure i remove any money in my account prior to this date
my account is frozen.As long as it for basic living costs yes if it's £1,000 no.

i apply for a new account or maybe as i bank with natwest they can find a banking solution. Nat west do a step account. But it is the bank that freezes said accounts not the OR

i have an interview with an OR where i provide an IE, obviously stretching it as far as possible :PThe OR has guidelines so if you stretch it too much and they think you are taking the ssip be prepared for them to come down like a ton of bricks on you.

i pay an agreed amount from my surplus for (3?) years.Yes 36 mths from the first payment. This can be highered/lowered/suspended/dissolved at any time during the 36 mths.

no-one other than me needs to know (apart from nosy newspaper readers and credit reference agencies).Unless you work in a profession when bc are not allowed,yes

i can pay my family back with the money i'm left.Yes

i should be discharged within a year and i can get on with my life Max 12mth sometimes earlier but depends on how simple your case is/workload of OR ect

my credit record is ruined anyway so i can't see how a bankruptcy can add substantially to that.No credit is shot for 6 yrs

looks likes happier days are on the horizon - why didn't i look into this earlier

thanks again!

No worries if you have any more fire away. I hate the olympics:rotfl: D

dalip

Jimmy scotish bc is different to english bc so all that i ave said may be wrong.lol