Positive Scottish Bankruptcy – The Story so far….!

MrChops

I have been lurking for just over a year, you can see I had my light bulb moment back in September 2007 and was bankrupt on the 13/10/08.

I just wanted to share my story so far and give hope to those who are struggling and say a big thank you to all on MSE who post and don’t judge and make us all feel human again!

OH and myself have been in debt one way or another ever since we were about 20 years of age, forever consolidating and fooling ourselves that it ‘would sort its self out’. First lot of debt about £30K defaulted in 1999, second lot of debt, about £25k defaulted 2007. First lot of debt when it defaulted back in 1999 we had arranged to pay token payments. So when we started applying for credit around 2002 as the other debt was old and ‘being paid’ we could get more credit! (Hope this makes sense…!)

Had our first child about 4 years and also moved to Scotland, to be near family and couldn’t afford to live down south anymore. Therefore only one wage coming in. OH’s employment has always been erratic due to the type of job he did, so relied on credit when low wage or no money coming in. After child number two came along the s**t hit the fan. Depression, arguments and me hiding our true debt issues from OH.

When second child was 3 months old I told OH the true extend of debt, we almost split up and he blamed me for the problems. CAB was, at the time also not very helpful, that’s when I found this site!

To cut a long story short I declared myself bankrupt through LELA once the law had changed in Scotland. Unfortunately we cannot do the same for OH has he works so we have written to his creditors trying to get them to agree to his bankruptcy. Which I hope is soon.

We are also trying to find somewhere else to live as we cannot afford to live in the house we rent. We have been very very lucky in that our council have put us to the top of the council list due to bankruptcy, small children and having to choose between paying our £600 rent a month or food.

Things have been very hard, and I know in some ways we are very lucky, but I feel the light has been turned on at the end of the tunnel.

Good luck and best wishes!
:love:

Apolonation

That's inspiring to hear, I'm really pleased things are working themselves out for you, good luck with them other creditors of your OH - and thanks for sharing your story so far. I look forward to hearing how things worked out with the other debts you've written to.

Good luck

tigerfeet2006

Thank you for posting that Mr Chops. It really helps others to read of other peoples experiances.

All the best for sorting out the other debts and you know where to come if you need any help.

coolcait

Hiya

Just a thought - if your OH receives working tax credit, he might still be able to go bankrupt under LILA - but it's likely that he'd have to pay a contribution each month.

I know you didn't have much luck with CAB before - but it might be worthwhile having a word with them about this (or your local authority money advisers). I'm pretty sure they'll all be clued up about LILA, given the number of people that are going through it (I posted a BBC article a couple of weeks ago).

Good luck!

Here2Help

coolcait wrote: »

Hiya

Just a thought - if your OH receives working tax credit, he might still be able to go bankrupt under LILA - but it's likely that he'd have to pay a contribution each month.

I know you didn't have much luck with CAB before - but it might be worthwhile having a word with them about this (or your local authority money advisers). I'm pretty sure they'll all be clued up about LILA, given the number of people that are going through it (I posted a BBC article a couple of weeks ago).

Good luck!

Sorry to disagree (hate doing that) but if income exceeds the LILA minimum and is sufficient to pay a contribution, then his case will be treated as a normal bankruptcy. However for someone with no assets, the contribution is the only real difference to how his bankruptcy will run.

The trustee will arrange to complete a telephone interview to establish his circumstances (and to see if he has any assets of value to the bankrupt estate) and set up an Income Payment Agreement (IPA) or an Income Payment Order (IPO) through the court (although an IPO will only be required should he refuse to make an agreement - always a good idea to come to an agreement with your trustee as Sheriffs can be a bit grumpy!).

He needs to be aware that while his bankruptcy will be discharged after one year, his IPA or IPO will last for three years.

coolcait

Here2Help wrote: »

Sorry to disagree (hate doing that) but if income exceeds the LILA minimum and is sufficient to pay a contribution, then his case will be treated as a normal bankruptcy. However for someone with no assets, the contribution is the only real difference to how his bankruptcy will run.

The trustee will arrange to complete a telephone interview to establish his circumstances (and to see if he has any assets of value to the bankrupt estate) and set up an Income Payment Agreement (IPA) or an Income Payment Order (IPO) through the court (although an IPO will only be required should he refuse to make an agreement - always a good idea to come to an agreement with your trustee as Sheriffs can be a bit grumpy!).

He needs to be aware that while his bankruptcy will be discharged after one year, his IPA or IPO will last for three years.

We're not actually disagreeing.

Someone who receives working tax credits CAN become bankrupt under the LILA rules, as long as they don't have property, any single asset worth over £1,000, or non-exempt assets worth over £10,000 in total. This means that they don't have to have a charge for payment or some other evidence of apparent insolvency - which can be hard to come by if creditors don't want to pay out for court costs.

However, once they are bankrupt, there's a good chance they'd have to pay a contribution - as we have both said. And you are absolutely correct in the rest of what you say.