Shall I go bankrupt! Please help!

Carlyt

Hi everyone,

well here goes....

I'm thinking about going bankrupt, I'm only 22 and have just over 20k worth of debt, I live on my own in a small flat and am even struggling with bills because I am behind on more or less everything and owe alot of family members money too.
I am selling my car today (hopefully) and that will pay back a family member who lent me money to buy the car, although I've heard this could go against me if I go bankrupt, but I promised I would pay him back and I am not going to ruin my relationship with him and not pay it.

I have spoke to the national debtline and they told me my option is to go bankrupt.

I still don't feel like i know enough about bankruptcy to do this yet but it is something i am seriously considering due to lack of options.

I was hoping that someone may be able to help me with questions I have.....

Are you discharged bankrupt after 12month?
How long does it stay on your credit file for?
will i still be able to get a job say with the nhs??
In the future I will come into inheritance, if this happens in the next 6 years, will they take it off me?
Am I allowed to drive another car if my mum gets me a little run around and puts it in her name?
What do they allow for on the income and expenditure?

I really like the idea of having a fresh start and getting my life back on track but really don't want the world to know i have gone bankrupt and i am worried about the consequences (even though i was stupid enough to get myself in this mess)

Sorry to go on but hope someone can help x

philnicandamy

Carlyt wrote: »

Hi everyone,

well here goes....

I'm thinking about going bankrupt, I'm only 22 and have just over 20k worth of debt, I live on my own in a small flat and am even struggling with bills because I am behind on more or less everything and owe alot of family members money too.
I am selling my car today (hopefully) and that will pay back a family member who lent me money to buy the car, although I've heard this could go against me if I go bankrupt, but I promised I would pay him back and I am not going to ruin my relationship with him and not pay it.

I have spoke to the national debtline and they told me my option is to go bankrupt.

I still don't feel like i know enough about bankruptcy to do this yet but it is something i am seriously considering due to lack of options.

I was hoping that someone may be able to help me with questions I have.....

Are you discharged bankrupt after 12month? Yep...sometimes sooner than that "called an early discharge"
How long does it stay on your credit file for? 6 Years
will i still be able to get a job say with the nhs?? Dont see why not...certain finance positions you'd have to disclose..I worked as a manager in a local NHS trust incharge of budgets/finance for new projects while I went BR without a problem
In the future I will come into inheritance, if this happens in the next 6 years, will they take it off me? Inheritance could be taken if you received before discharge...after that its not a problem unless your faced with an IPA these last for 36mnths and are a % of cash you have left over £99 a month after your expenses are taken into account...any change in financial circumstances then you would have to inform the OR/trustee
Am I allowed to drive another car if my mum gets me a little run around and puts it in her name? Yep
What do they allow for on the income and expenditure? Put up your SOA (statement of affairs) and we'll have a look for you & see whats happening & tell you whats allowed & whats not

http://www.makesenseofcards.com/soacalc.html



I really like the idea of having a fresh start and getting my life back on track but really don't want the world to know i have gone bankrupt and i am worried about the consequences (even though i was stupid enough to get myself in this mess) The only people that know are who ever see it in the paper when its published (and to be honest not many do its that hidden away) and of course people you tell yourself

Sorry to go on but hope someone can help x

Hope that helps a bit....what you need to do before you decide on ANYTHING is contact one of the debt helplines in my sig below they'll help you come to a decision on where to go from here.....meanwhile we'll support you anyway we can

bit of reading here on bankruptcy etc
http://forums.moneysavingexpert.com/showthread.html?t=1056083

Geordie_Mick_2

Are you discharged bankrupt after 12month?
in most cases automatically after 12 months, some or discharged early
How long does it stay on your credit file for?
5 years
will i still be able to get a job say with the nhs??
Providing it's not a financial qualification dependent YES
In the future I will come into inheritance, if this happens in the next 6 years, will they take it off me?
No, as long as the inheritance is due to you post BR
Am I allowed to drive another car if my mum gets me a little run around and puts it in her name?
Yes but you may be able to keep it and prove it is a 'tool of your trade' i.e. you need it for home visits and emergency out of hours work. DO NOT sell it and give proceeds to family member, that's technically making someone a preferential creditor and they take a very dim view of that. The allowance for a car is £2500 IIRC, if it's worth more than that then a family member can foot the cost of the rest if you want to keep it.
What do they allow for on the income and expenditure?

More generous than you'd imagine. I live in a new 3 bed rented, I really thought they'd amde me move into a bedsit to reduce outgoings, I kept all of my furnsihings, TV, computer, Hi-FI etc and even my motorbike and hoards of bike kit

I really like the idea of having a fresh start and getting my life back on track but really don't want the world to know i have gone bankrupt and i am worried about the consequences (even though i was stupid enough to get myself in this mess)

Bankruptcy is a serious position to be in and some do see it as an easy way out, but the ones who do see it as a once in a life experience will beneift from it. I'm 6 month's out of discharge and I've got contract phone, just signed a lease on a new car for my new business so you can come out of this.

tigerfeet2006

I've nothing to add to Phil's excellent advice but would just like to say hi and welcome to the board and any questions you have just ask away.

skylight

How long does it stay on your credit file for?
- Little confusing! It goes on your credit file for 6 years. However, it goes on your file on day one of BR (court date), so less the 12 months you are bankrupt it remains for a further 5 years.

Had to clarify as everywhere states 6 years but after BR, its slightly different!

philnicandamy

The allowance for a car is £2500 IIRC, if it's worth more than that then a family member can foot the cost of the rest if you want to keep it.

says where? i've known members in the past loose cars they owned in bankruptcy worth less than a few hundred pounds so I think your figures are a little off the mark...there is NO allowance set for a vehicle....."IF" you own a car worth a considerable ammount say for example £2,000 the OR may seize and give you funds back to by a cheaper car or as stated sometimes allow a 3rd party to purchase the car although this is never a guarantee...as people here know cars are NEVER cut & dry with the OR & bankruptcy...although what your suggesting with your mum should be fine

and Job wise? not all finance positions are out of bounds to Bankrupts

blind-as-a-bat_2

31.2.25 Exempt vehicles of excess value (updated August 2008)

Where an exempt vehicle appears to have a significant value, the official receiver, when acting as trustee, may claim it for the estate if he/she considers that the realisable value of the vehicle exceeds the cost of a reasonable replacement [note 7]. The vehicle must be claimed by notice in writing no later than 42 days after it came to the knowledge of the trustee (in the case of the official receiver, on his/her becoming trustee) [note 8]. Any notice after this time can only be made with the leave of the court. The official receiver should not normally take any steps to claim an exempt vehicle unless the potential net realisation to the estate is at least £500 after taking into account any costs of sale and of a replacement vehicle. A third party contribution equivalent to the net value of the car to the estate may be accepted to avoid the seizure, sale and replacement of the vehicle. This will also need to cover the value of any cherished/personalised registration mark if that is also to be retained by the bankrupt (see paragraph 31.2.25A).

The official receiver will need to consider the nature of the bankrupt’s business in assessing whether a vehicle has excess value since in the past the courts have concluded that a bankrupt could retain a high value vehicle because he/she operated a business which provided chauffeur driven vehicles.

31.2.26 Provision of a suitable replacement

Where a decision is made to replace an exempt vehicle with a cheaper alternative [note 7] the official receiver should inform the bankrupt of the amount he/she is prepared to make available out of the sale proceeds. The official receiver has discretion as to the amount allowed for the replacement which should be sufficient for the bankrupt to buy a replacement vehicle which is suitable for his/her needs. For consistency between official receiver's offices a guideline maximum figure of £2,000 has been introduced. While official receivers may exceptionally exceed this figure depending on the purpose for which the vehicle is used, it should be adhered to as frequently as possible.

Depending on the circumstances of each case the payment to purchase the replacement vehicle may be made to the bankrupt directly or to the vendor of the vehicle. The most secure way to undertake the purchase is payment direct to the vendor. It is recognised that a bankrupt may be able to obtain a better deal to purchase a vehicle by negotiating a private sale or attending a car auction and in such circumstances immediate access to cash is required. If an allowance from the proceeds of sale is made directly to the bankrupt then the official receiver should request evidence of the purchase of the vehicle within 21 days.

I think the 2k figure came from the second quote, and someone added the £500 from
the first Phil

But as you say they are guidelines only and the final descision rests with the OR,s examiner in question

Everyone needs to stop looking at the tech manual as "rules" and "allowences" as there not . Its a guide that can be deviated from, no more, in most cases

fermi

That is all assuming that the OR declares the vehicle an "exempt asset" as well. That is never guaranteed.

If they can't/won't declare it exempt then the OR has a duty to sell/dispose of the vehicle regardless of value.

Carlyt

Thanks for your help everyone, this is really helping.

Its going to take me a few month to get the bankruptcy fee together anyway so its not something I can do straight away. I understand that they may see me selling car as a bad thing but i do need to clear this with family memeber, already got all this debt on my mind without him been on my doorstep and my plate!

The inheritance will come from my Nan so fingers crossed nothing happens to her anytime soon anyway, Its not so much the money i am bothered about its the thought that she wouldnt be happy at all if her money that she had worked hard for would have payed my debt off.

After i sold the car (hopefully today), mum is going to get a run around and out it in her name and i will just get insured on it.

Also do they come round to your house and check your posessions etc? have a tv and basic furniture but nothing of any value....tv on finance? assuming that will go back.....

maybe moving in with my boyf next year if things go ok so that willl help, he stops alot and things seem to be good so looking forward that will help with bills etc.

I'm also really rubbish at managing my money but i am so determind to sort this out and have a fresh start. Been in debt since my 18th birthday when the bank threw a credit card, loan and overdraft at me and i was young and daft enough to take it and then i started robbing peter to pay paul and it just got out of control! now i have ccjs and defaults all over the place!

Right here is my monthly SOA

INCOME £998

Rent 375 (1 month in arrears)

Council tax 109 (including 25% discount, high due to arrears)

Water 32 (again arrears)

Electric £100 (not paid this for a while due to a dispute, live in electric only flat and they reckon my bill is £2500 for about a year, refused to pay until sorted)

TV licence 39 ( high payment due to arrears

previous employer 150 ( this was a staff loan i took out with them, paid them 50 up to just but they want 150 a month, owe them 700ish, understand this will go bankrupt)

Gym 28 (the only thing that keeps me sane and releases my stress)

Petrol £80

Car Insurance £48

Mobile contract £35

Bt line and internet £37 (need internet for college course)

Health insurance £5

College course £25 (studying from home to qualify to get better job)

Family member for car £210 (obviously this will go when car sold)

Food £120

Smoking 100 (obviously this is not necessary but difficult to give up, but will give it a go)


TOTAL 1493 (£1283 WITHOUT CAR)

Can't think of anything else for now, i know theres alot of stuff on there thats not essential but would like to know what i am allowed and what im not etc

fermi

Carlyt wrote: »

Also do they come round to your house and check your posessions etc? have a tv and basic furniture but nothing of any value....tv on finance? assuming that will go back.....

Nope. They don't come round to your house.

I'll let others who are better on that comment on the budget.;)

skylight

Carlyt wrote: »

Also do they come round to your house and check your posessions etc? have a tv and basic furniture but nothing of any value....tv on finance? assuming that will go back.....They do not come to your house. But finance TV will depend on the contract. The OR will not be interested, but the finance company may take it - check that contract.



Right here is my monthly SOA

INCOME £998

Rent 375 (1 month in arrears) Private rent? Arrears go into BR - if private the LL may look at eviction. If social housing, no problem.

Council tax 109 (including 25% discount, high due to arrears) Arrears into BR

Water 32 (again arrears) Arrears in BR

Electric £100 (not paid this for a while due to a dispute, live in electric only flat and they reckon my bill is £2500 for about a year, refused to pay until sorted) Is this sorted now? Arrears in BR

TV licence 39 ( high payment due to arrears OR only permits £12 as standard. As thats the amount you will normally pay.

previous employer 150 ( this was a staff loan i took out with them, paid them 50 up to just but they want 150 a month, owe them 700ish, understand this will go bankrupt) Into BR.

Gym 28 (the only thing that keeps me sane and releases my stress) Will not be allowed to keep on your SOA. Now, you can still keep it, but all payments MUST come out of your surplus only as the OR does not permit it as an allowance for BR purposes.

Petrol £80

Car Insurance £48

Mobile contract £35 May or May not be allowed to keep the contract going. List it, but don't mention contract.

Bt line and internet £37 (need internet for college course)

Health insurance £5 Mmmm... Maybe not. As its only £5, leave it - the worst they can say is no.

College course £25 (studying from home to qualify to get better job)

Family member for car £210 (obviously this will go when car sold) Not allowable expense. The debt should go into BR.

Food £120

Smoking 100 (obviously this is not necessary but difficult to give up, but will give it a go) You know what I am going to say!!! Smoking+health Ins+Gym= stupid.....


TOTAL 1493 (£1283 WITHOUT CAR)

Do you work?? Where does your income come from? It does matter as there could be stuff you can add.

You may have issues selling the car to pay back the family member. Technically this is favouring a creditor. But realistically once its paid back, there is little the OR can do except demand the family member re-pays the money.