Son going Bankrupt

Libbee49

Our Son is thinking of going Bankrupt but one of the debts is that he owes us £400 per month for a loan we took out for him in our name. We cannot afford to pay this for him and its the one debt he makes sure he pays regularly. Will he have to stop paying us if he declares bankruptcy or can this be covered on the application. This is causing us a great deal of worry and we hope someone out there can help.

Pssst

This arrangement you made was one that you made personally. YOU owe that money,not him. It is up to his personal integrity as to whether he chooses to honor that debt as there is no legal compulsion for him to do so. Only you know your son well enough to answer that question. Anyway he cant choose to go bankrupt. He can apply for bankruptcy but it is not an automatic right and he may not be granted it. Who is going to pay his £400 bankruptcy application fee?

Valley's_girl

Hi welcome to mse I am sorry I don't have an advice I can give but someone will be along shortly to advise you.
best wishes
Ally x

GeorgeUK

Has he taken advice from one of the free debt charities about going bankrupt?

You may want to try posting this on the bankruptcy board as well.

Broken_hearted

He won't be able to pay you £400 a month as the OR won't allow it, he may be able to pay something out of the living allowences they give him. Everything he has coming in will be checked to see what if anything he can pay the creditors back.

RAS

Hi libbee

The debt that he owes you will be included in his bankruptcy. If he has any real assets and his post-br surplus income is over £100, you may get something towards the debt from the Official Reciever.

He needs to take some very careful advice as he could be consider to have been making preferential payments to you for this loan (which is not in his name).

Some BK people who have family debts are able to continue paying them off by cutting their own expenditure and using any surplus, but your son would need as huge surplus if he was to have £400 knocking around each month.

he and you, and possibly all of you together needs to talk to one of the debt charities listed here http://www.moneysavingexpert.com/loans/debt-help-plan#help.

Broken_hearted

The debt owed to the parents will be wiped but the debt owed by the parents will still be there.

Miss_Piggy_2

I would strongly suggest your son speaks to a debt charity such as the CCCS before going down the bankruptcy route. In a DMP they account for any debts owed to family/friends so if he has a decent amount spare each month he could do a DMP instead?

Miss P
xx