When to go bankrupt?

anna1976

Should my friend declare herself bankrupt now or wait? She has debts she cannot pay, her ex-husband has far more debts which he cannot pay. They have been unable to come to a financial settlement. Should she declare herself bankrupt now? If she does, what will happen if and when a financial settlement is reached with her ex? Could she find herself with debts which are not covered by the bankruptcy? Should she wait until a financial settlement has been reached with her ex (although this looks increasingly unlikely)?
Any information will be very gratefully received.

Waspeze

Normally i'd say go bankrupt sooner rather than later (i put it off for two years and achieved nothing in that time and would be discharged and well on my way to rebuilding now if i'd gone when I should have)
However .. I really don't know how a settlement would affect it so i'll let someone more knowledgeable answer

(have you spoken to CCCS or national debtline? they might be able to help?

skylight

Waspeze - totally agree. I waited a few years and it was a waste of time. Nothing changed and TBH, I wasn't expecting it to.

My first thoughts would be, if she went BR, then this would definitely affect the settlement - if many debts are joint debts. There is no way her ex is going to allow her to go BR (not that he can stop her!), all joint debts automatically pass to him to deal with AND pay her a settlement.

The debts not covered by BR are CSA payments, court fines and student loans, so she is not going to get stung with anything new.

However, if a settlement is reached after she is BR and before discharge date (one year later) then her OR will take that settlement to settle her debts and pay fees, and will pass back the remainder to her (if anything is left). What needs to be checked out with the professionals (like Payplan or CCCS) is that this is totally correct and the OR ceases to have any interest in her settlement after one year. With some property, for example, the OR can keep an interest in it for 3 years and this may also be the case with a divorce settlement - important to be checked out.

I guess, that she really needs to sit down and work out whats best for her. To go BR or sit and wait. Sometimes it may just be best to walk away and sometimes it is not (depending on the size of his assets).

anna1976

Many thanks to those who have taken the time to reply to my question. There are no assets - only debts. My friend's ex is trying hard to offload as much of his own debt (not joint) onto her as he can. She is finding the whole subject extremely stressful which is why I am asking the question on her behalf. Thanks again.

tigerfeet2006

What throughly pleasant bloke :mad:. If she goes BR then all her debts (bar a few exceptions) will be wiped out. The joint debts will become wholly the Ex-hubby's responsibility :D:D and he won't be able to put his debt's on her .

As the others have said get her to ring one of the debt charities. Links and numbers in my signature. They will talk her through her options. Maybe try National Debtline first as I think CCCS have a bit of a wait at the moment.

anna1976

Many, many thanks to tigerfeet2006 and all of you. Your advice and support have been wonderful!