Bankruptcy panic!

TRAVELMAN_2

Hello....I'll be brief. Try getting a lower mortgage monthly payment if you can. If not then I'd get your parents to buy the house as you suggested.

To be honest if an Insolvency practitioner has advised bankruptcy then it's worth serious thought. My other 1/2 did this & it was one interview-6 months later-all finished-she was discharged (max. term in most cases is 1 year). However....go to http://www.debtquestions.co.uk/forum/index.php3 & ask advice-this guy's an expert.

Many good folks on here have payed/are paying their debts off in other ways to bankruptcy & I applaud them, BUT it could be an option that would free you in a year! As i said-get advice re: house, etc from the link I sent.

Be prepared for posts after this saying 'it's not moral', 'get an extra job', 'I'm paying 'x' pounds a month will be debt free in 2015' etc...for some reason & bankruptcy promotes rabid responses but is worth considering-good luck!

meanmachine_2

Wow, this site never ceases to amaze me.

On a 189K mortgage, and with a repayment of 1495, that's an interest rate of 8 PER CENT!!!!!

Why on god's earth are you paying 8% on your mortgage? Were you the director of Enron in a former life?

As others have said, the mortgage is the killer. Don't know quite how you managed to acquire it, but you shouldn't have done, is the simple answer.

If you've kept up with payments, you could remortgage to a mainstream lender. At the very least switch to an I/O on a 30 year term for starters.

As for the rest, well, again I'm speechless.

sparkle84

Again I can only reiterate what others have said you cannot afford this mortgage - how on earth did you ever get it!! there is no point in you selling you house to your parent you couldn't afford to rent it off them - I understand you may be upset by people reactions but I hope you have a serious think about it. Noone is getting at you but you need to face facts your husbands salary is entirely eaten up by this mortgage . You business insurance is a also a joke get rid of it and perhaps now is not the time to start a new business.

fairylights_2

I don't know very much about bankruptcy, but surely even if you do declare yourselves bankrupt, you're just going to disappear back down the black hole again? You need to think about where your money's going aside from the rent. We have a monthly income of about £1500 a month, but manage quite comfortably now we're aware of our spending. I too work from home, spending a lot of time on the phone but our monthly phone bill hasn't been over £20 in more than a year. We have two under fours at home most of the time, and our electric and gas combined is £30 a month. Our grocery bill including toiletries doesn't generally go over £250 a month. If you are going to stay at home, you're going to have to admit that your lifestyle has to change - health insurance has to go, stop spending so much on clothes, change to a cheaper preschool - or have fewer sessions.

Whilst it's a good thing that you've found the boards, if you don't realise that your problem won't go away even if you decide to bankrupt yourselves, you'll be back here asking for help again within a year.

in*the*red_6

Agree with Fairylights, but if you are declared bankrupt you won't be allowed any access to credit at all, you won't even be allowed a current account and your monthly outgoings will still be much higher than your incomings so what will happen then? Default on the utility bills, council tax etc and you'll be in even bigger trouble. Stop paying the rent to your parents who've bailed you out and there could be family friction. I know it seems a difficult situation to get out of but I can't see bankruptcy being the golden ticket to escaping it in your positon . I would suggest you cut your expenses to the bone, get your house on the market asap (maybe even decide to rent for now), get your spending in some sort of line with your income and then go back to CCCS who should then be able to help you with your creditors. HTH.

BobProperty

meanmachine wrote:

Wow, this site never ceases to amaze me.

On a 189K mortgage, and with a repayment of 1495, that's an interest rate of 8 PER CENT!!!!!

...If you've kept up with payments, you could remortgage to a mainstream lender. At the very least switch to an I/O on a 30 year term for starters....

I agree meanmachine.

Three points:

Switching should save at least £200 a month if you can switch. You have a 90% LTV mortgage and getting a reasonable self declaration mortgage won't be easy. There isn't some insurance in the repayment you are making is there?

What line of business are you in that needs £252 per month of insurance? I'm curious. As has been said, you are earning less than minimum wage running this business. Unless it is going to improve considerably in the next few month then put it on hold.

I don't know the rules on bankruptcy but I suspect the receiver has to get the best deal for everyone, therefore your parents will have to pay the going rate for your house. They will end up with a mortgage in the region of say £1400 a month which you are going to cover by rent. So you are hardly any better off in terms of outgoings relating to the roof over your head.

happyformonths

Hi, I'm a complete newbie here after months of lurking... and don't know that much about bankruptcy, but unless I'm mistaken if you go bankrupt you can't become a company director again for a certain length of time - what would this mean for your business?

You've probably had advice on this from your insolvency person but it's just the immediate thing that springs to my mind that no-one else has mentioned yet.

Good luck, but you really need to make some enormous changes I'm afraid.

HFM

robertbruce

Hi
Seems like you're getting a bit of a going-over here, but remember it's all intended to help you take stock of your DANGEROUS situation. You are in danger of using a bankruptcy to solve your present problem without addressing the actual problem which will continue afterwards. Your lifestyle is ingrained and you probably don't want to hurt the kids by making changes, but in the longer term, you are doing more damage as your situation gets more intense, AND IT WILL.

You are also affecting your own future, since you and your partner will be judged by credit scoring for the next 5-10 years based on decisions you make now. Bankruptcy will probably lose you your home, although there are ways to fight this if you do end up going there, but renting a property will still cost you around £1000 for the size of house you need, and you still have to find a suitable one in a hurry when this happens, and in an area acceptable to you and your family.

SORRY but all this is irrelevant anyway. You must address the GAP between income and expenditure, and until it is a positive figure, you have nothing to work with either NOW or in the future. INCREASE your incomes and DECREASE your expenditures by whatever means possible to give yourself a chance. IF YOU DON'T, ONE OF YOUR CREDITORS WILL DO IT FOR YOU and take away the decision making from you and your partner. After that, you are at the mercy of the courts (including receiver) and have less influence on the outcome, so start the process now.

Some good advice has been offered already on previous posts, and I think only the last post asked about your job, one of the key areas of income. What type of business are you running, and how can we help you look at options for this as well as the reduction of expenditure.

Keep working at it and keep in touch with the people here who WILL help. Regards. Bob.

westernpromise

in*the*red wrote:

Agree with Fairylights, but if you are declared bankrupt you won't be allowed any access to credit at all, you won't even be allowed a current account and your monthly outgoings will still be much higher than your incomings so what will happen then?

Exactly.

Another point not often appreciated is that although the bankruptcy laws have been relaxed recently in some respects, in another they've been tightened. If you are deemed to have been negligent or reckless in getting into financial difficulty, you can remain in bankruptcy for a lot longer than used to be the case - like, 10 years longer. Someone who blows a lot of money they obviously are not earning may not be discharged for 16 years, not 6 months, 6 years, or 1 year or whatever. Food for thought - you cannot assume that bankruptcy will be an easy way out.

It may still be the best shot but as others have pointed out, even if you declared yourselves bankrupt you'd still be stuffed. Your husband's salary pays the mortgage leaving yours to live on, and frankly, you cannot keep a family on 150 quid a month, sorry.