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Bankcruptcy & Personal Injury Payment

Hi,

I am slightly shocked to discover that I am being made bankcrupt, following problems with old tax returns and ignoring scary letters saying I owed them 10k when in actual fact I owe them just over £3k. However, it seems I was made bankcrupt on 18th December 2008. Initially, I was mortified and thinking all kinds of horrible things but after reading some of the threads on here I'm not sure whether I should actually be pleased? I have had a difficult time financially, over the last couple of years after a car accident. So, my credit rating is terrible. Have no loans, credit cards or mortgages and rent a house with a friend. But my main concern is that I am about to recieve a large cheque as compensation for the accident and wondering how the bankcruptcy order will affect this?

Can anybody shed any light?

Comments

  • peachyprice
    peachyprice Posts: 22,346 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I beleive it depends what the compensation is for, if it's for future loss of earnings I don't think they can take it, if it's for the inconvenience of your injuries they can, or something along those lines. If you ring the Insolvency Service helpline (anonymously;) ) they should be able to tell you

    If the payout is larger than your total debts you can use it to cancel your bankruptcy.
    Accept your past without regret, handle your present with confidence and face your future without fear
  • Thanks will try ringing the helpline
  • Bnjracing
    Bnjracing Posts: 85 Forumite
    Hi We are in a similar situation - awaiting a claim for medical negligence to be sorted. We were told that as the compensation was for "pain & suffering" we would be allowed to keep it. However we are hoping that it will be sorted after the BR is finished in August just to be sure.
  • Hi

    Just wanted to bump this one up as I haven't managed to get a concrete answer on whether or not I should let bancruptcy go through or try and get it annulled.

    Anyway, got my cheque paid it into bank but reciever called me to say bank had called them and he has frozen the funds!!!!! Advised me to speak to a solicitor 'like yesterday' which I have done but the solicitor gave a pretty grim account of what I can expect if I don't do anything and if I do!

    Solicitor will charge fees of £3k, plus 2k charges from inland revenue court costs, will have to pay off £3.5k plus any other debst that I have (which hopefully come to less than 1k)

    But that makes me think.....I'd have to pay this lot off anyway if I don't try and get it annulled but I won't have to pay the solicitor £3k??????????

    Please help...can't get through to National Debtline and CCCS but both numbers are jam packed with other calls and I can't get through.

    Not to mention that solicitor needs £1k up front before he starts work which I don't have access to because OR has frozen funds?????

    Can anybody advise the best way forward...
  • fiveyearplan
    fiveyearplan Posts: 10,143 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Hi newbr - Have you spoken to the OR yet? You need to do this straight away. You also need to open a usable bank account - try Coop or Barclays.

    How much did you get for your injury and how much was your bankruptcy?

    You don't need to pay a solicitor anything as there is nothing he can do for you that you cannot do yourself. Keep trying NDL, CAB and CCCS. Also try Insolvency service.

    :j :j


  • Hi newbr - Have you spoken to the OR yet? You need to do this straight away. You also need to open a usable bank account - try Coop or Barclays.

    How much did you get for your injury and how much was your bankruptcy?

    You don't need to pay a solicitor anything as there is nothing he can do for you that you cannot do yourself. Keep trying NDL, CAB and CCCS. Also try Insolvency service.

    I already have a basic bank account with Barclays which seems to have remained open and unfrozen....so far.

    I have spoken to the OR, he was the one who recommended I speak to a solicitor without delay...hence my confusion! But this morning, following your reply I have spoken to National Debtline (the only service open on a saturday) and they, like you, said I don't need a solicitor. It is up to the OR, he has confirmation of the funds and I should be able to instruct him to pay off the bankcruptcy, have it annulled and release the funds?

    I have also spoken to the Inland Revenue this morning, the normal helpline as the Enforcement Office who have organised the Bankcruptcy Petition are not open on a saturday, and confirmed that my outstanding tax returns (the ones I assumed would cancel out this action) were processed on the 31st October - these returns confirm that my liability is in actual fact £3.5k rather than the £10k bankcruptcy petition. Is it too much of a long short to try and insist that this action should never have taken place because I had completed and submitted the outstanding returns and have been notified in writing of my new £3.5k liability as of 31st Oct and they have gone ahead with proceedings and made me bankcrupt on 18th Dec!!!

    National Debtline have advised me to call the Insolvency Helpline but they're not open until Monday.... I am at work on Monday and have an appointment to see solicitor at 11am on Monday morning where I will need to decide whether I want to instruct them or not? Which will mean an additional £3k on top of any other costs I will be required to pay?

    All help and advice greatly appreciated...

    Thank You
  • peachyprice
    peachyprice Posts: 22,346 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Here you go newbr,

    It seems you get the forms from the IS website and go back to court, and the only thing you need a solicitor for is to certify you statement, which costs about £10.

    http://www.insolvency.gov.uk/guidanceleaflets/canmybanruptcybecancelled/canmybankruptcybecancelled.htm



    Good luck, I hope you get it sorted.
    Accept your past without regret, handle your present with confidence and face your future without fear
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