Answer to the Question, Cause of BANKRUPTCY

wazza24

Hi all
Just a quick Question i am just filling out the forms for BR and have came to the last part which asks.

What do you think are the reasons for you not having enough money to pay your debts?

am just wondering how detailed i need to be in answering this question. It says i should provide a reason to support my answer. for example it would not be enough to state "The recession" without explaning its effect on your affars.

Basically i have borrowed to much money over a long period of time, consolidating time and time again and banks lending money and increasing card limits when i clearly could not afforsd to pay the debts on the wages i earn.

Do you think it would be ok to write something like that, well ok mybe not the last bit about the banks:p

Any advice would be greatly appreciated

Thanks Wazza

LilyBart

Hello wazza,
It's the trickiest part of the form, without a doubt. If you have time, check through the threads over the last week or so and read Lisa's (mum to archie plus bump) thread on the same topic. JCS1 had some interesting stuff to say on this and said that in some of the cases he had worked on the more detailed answers meant there was either less to cover in the OR interview or no need for an interview at all. In the end, it has to be a personal decision. But if you search "cause(s) of bankruptcy" you'll be able to read what a lot of others put down on their petitions.
best
Lily

chelseabun_3

http://forums.moneysavingexpert.com/showthread.html?t=1258131

This thread has OhDear's statement on it, which some others have found useful, and sounds similar to what you want to say! It's an individual thing as to how much detail you go into, but others have said to not give yourself enough rope to hang yourself (or for them to hang you!) You get my drift!! Hope you get it sorted! CBx

josephine1_2

i put things like fees for me and partner to get better jobs, period of depression meant unable to work, problems in pregnancy. judge appreciated i had taken the time to really work out how we'd got into the situation

pink-lint_2

we were told off the CAB always put that
"we deeply regret the situation we are in"
on at the end .

pink

lisamummytoarchieplusbump

hello wazza24 as lilybart said heres the link for my cause of br. some people havent gone into to much detail but i felt i couldnt explain why i was in this mess without givin all the facts

http://forums.moneysavingexpert.com/showthread.html?t=1320751
ive tweeked it about abit. deleating bits adding bit. adding again the bits i deleated its driving me mad so ive decided to not read it anymore lol as im thinking about these bloody forms in my sleep

OhDear

chelseabun wrote: »

http://forums.moneysavingexpert.com/showthread.html?t=1258131

This thread has OhDear's statement on it, which some others have found useful, and sounds similar to what you want to say! It's an individual thing as to how much detail you go into, but others have said to not give yourself enough rope to hang yourself (or for them to hang you!) You get my drift!! Hope you get it sorted! CBx

Further to CB's comments on my statement of cause, I wish I'd had a bit more time for a bit more detail prior to BR. Although it was ok for the BR and the judge, I think a bit more detail might have made my OR interview a little easier. I can't say that's true for certain, but it's my gut feeling.

I wouldn't have added loads, but I would have added (in red) something along these lines:

"I had struggled with debt since I had work problems in 2001. However I was able to remain solvent largely due to the increase in the value of my home. I sold my home planning to downsize in Dec 2002 and moved into rented as I couldn't find a suitable flat. In March 2003 I bought a house instead, and although I could afford the purchase, it did need a lot of work. It was at this point that I really began to over extend myself on credit. Work dropped off and I had to use credit for basic living expenses.

I got caught up in the whole property development thing, but had to use credit to finish the house. I planned to sell as quickly as possible, but although a sale was agreed immediately, it was 5 chains and 11 months before completion! Interest was draining every penny I earned and more.

After eventually completing the sale of this house, I found that I was unable to clear all of my debts. Work, my ill-health, my wife's ill-health, and the ill-health of my elderly mother have all contributed to a lack of income. These factors have caused me to use further credit to pay for basic living expenses, retraining fees. The interest on the debt, has added to the total debt figure."

"For a long time I have juggled debt to pay off debt, using 0% balance transfer deals to move debt around, but each time living costs were added and the amount of total debt rose. I am now totally over-committed on credit cards and loans, and have no hope of paying them off.

We moved house and area to look after my wife’s parents in May 2008. I was unable to build up my driving school quickly and so have been falling further into debt in an attempt to keep my head above water. I have had my head in the sand for a long time, however I have now realised that I cannot continue in this way, and have no way of repaying the money owed."

Obviously, these additions are less well considered than what I submitted. These were the sort of explanations I had to go through in my OR interview, but of the top of my head!!:eek:

hth OD:D

LilyBart

I think most people realise there's things they've forgotten to put down in that bit of the form once they're actually on the phone to the OR. I was taken aback during my phone interview when I was asked what steps I'd taken when my income first dropped. I mumbled something stupid about cooking with lentils and not buying any new clothes, and only realised a few hours later that I'd done rather more than that: stopped having a cleaner, laid off the assistant I was employing one day a week, etc. So I mailed the OR and asked that they make a record of this too. I don't know whether it did make its way onto the file or not, but my point is that it's extremely unlikely that any of us will be able to answer the "cause of bankruptcy" question definitively. All we can do is do our best to give an accurate picture of the events leading up to bankruptcy and, like Pink-lint says, hold our hands up at the end and say we are aware of how serious a step it is.
Um, hope that helps.

dalip

When i did mine i put the basics on the 6.28. Then when i sent all my bumf off to the OR i included a very nice 2 page dated essay:D explaining everything(and i mean everything:o ) that led to my bc.Dx

LilyBart

Eeek, D! That's not an essay! That's an autobiography!
L x

dalip

Yes well i had,had my cc 18 yrs and i had to go right back to the begining did'nt i;) .Dx