Out Of Control Debt

desmonds

Hi,

What do I do?

I am hugely in debt to the amount of 80K and wonder whether going bankrupt would be the best option.
All my debts are unsecured apart from the mortgage on the house.
If I file for bankruptcy, someone please tell me whether my house would be safe.
So long as I don't default on the mortgage then surely unsecured debt should not be able to touch my property?
Do I write to the credit card companies and tell them that I am struggling to pay and would they stop any interest, or, should I go to CAB and let them do the sorting, or, file for bankruptcy?

A mate of mine owed as much as 10K to credit card company and he just sent them a letter saying he could not afford to make payments and would they freeze interest and apart from a number of demand letters he has not heard from them for almost 4 years as if they have just wiped the slate clean apart from him now having a black mark on his credit file.

If I applied for bankruptcy, the receiver will take hold of any assets I have which I know doesn't include essential things like tools of the trade and home essentials but the last thing I want is for me to lose my home which I jointly own with my wife. We have a 2 year old boy.

I wondered putting the house in my wife's name but because I am married and therefore classed as financially associated to my wife could the house still be taken.

Again, ALL my debts are unsecured and only my mortgage lender as a secured interest in the property.

The mortgage always comes first before any other payment and so I would never default in payments.

Anybody, with any advice please.

Paul

file_wizzard

desmonds wrote:

Hi,

What do I do?

I am hugely in debt to the amount of 80K and wonder whether going bankrupt would be the best option.
All my debts are unsecured apart from the mortgage on the house.
If I file for bankruptcy, someone please tell me whether my house would be safe

So long as I don't default on the mortgage then surely unsecured debt should not be able to touch my property?.

The OR ( Official Reciver) would look to liquidate your assets which would include the house, however this is not completely cut and dry and would be dependant on the amount of equity in the property, and if you have any "dependants" living with you i.e children, elderly relatives

desmonds wrote:

Do I write to the credit card companies and tell them that I am struggling to pay and would they stop any interest, or, should I go to CAB and let them do the sorting, or, file for bankruptcy

Contact the CCCS Consumer credit Counselling Service https://www.cccs.co.uk, or payplan https://www.payplan.co.uk they will help you to set up a DMP ( Debt management plan) to repay your creditors at a realistic amount, or advise as to other options.

desmonds wrote:

A mate of mine owed as much as 10K to credit card company and he just sent them a letter saying he could not afford to make payments and would they freeze interest and apart from a number of demand letters he has not heard from them for almost 4 years as if they have just wiped the slate clean apart from him now having a black mark on his credit file..

Most lenders can AND will just sell the debt to any one of a number of very dubious debt collectors who will do their best to make your life hell in a vain attempt to recover the debt, they can do this for up to 6 years after the original default ( providing no admission of the debt is made) or they will continue to chase indefinitely if communication / admission is made by the debtor

desmonds wrote:

If I applied for bankruptcy, the receiver will take hold of any assets I have which I know doesn't include essential things like tools of the trade and home essentials but the last thing I want is for me to lose my home which I jointly own with my wife. We have a 2 year old boy.

I wondered putting the house in my wife's name but because I am married and therefore classed as financially associated to my wife could the house still be taken..

Yes you will be allowed tools of the trade, a “reasonable” car if it is essential to your work or family, and “lifestyle items” i.e reasonable T.V / P.C Ect if you have children.

With regards to the transfer of property at any point up to 2 years before bankruptcy no this is not an option the OR would review all transactions and bank accounts Ect. and view this as a preference / avoidance

Conor_3

If you file for bankruptcy, your house will not be safe if there's any equity in it. Ownership of your half instantly becomes the property of the Official Receiver. To keep your home, your wife would have to buy out the Official Receiver. As it is in joint ownership, his interest is 50% of any equity. You/your wife, would have to raise that amount.

Transferring ownership to your wife just before you bank won't help and would make matters worse.

desmonds

If say a married couple separated and left the house to the wife and child what would happen if after say a year the husband whonow is living on hs own files for bankruptcy what would happen to the house he left to his wife who he s now separated from but not devorced?

file_wizzard

desmonds wrote:

If say a married couple separated and left the house to the wife and child what would happen if after say a year the husband whonow is living on hs own files for bankruptcy what would happen to the house he left to his wife who he s now separated from but not devorced?

I can see where your coming from, but so would the OR !!, as Conor say's the wife would have to buy you out at market value otherwise the transaction is a preference / avoidance, and if you had the funds from the sale then this would go directly to the OR and your creditors.

If you feel bankruptcy is the only way forward then take some professional advice, but whatever you do DONT try to beat the system, the consequences of knowingly misleading the OR are exceptionally serious.

oriana

If you want to keep your home, then maybe an Individual Voluntary Arrangement would be worth considering? see option c on this link for more information.

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