Advice PLease

EnslavedByDebts

Hi,

I went bankrupt on 4th March 2009 had my telephone interview today which went okay. I need some advice on my partners situation now.

I went bankrupt with a joint mortgage and a joint overdraft. The joint mortgage was a Northern Rock together mortgage which was part secured (95%) and part unsecured (7%). Am i right in thinking that he is now solely responsible for the unsecured part? So if he went bankrupt this part would get put into his bankruptcy?

The joint overdraft has become his debt and the bank is not willing to go into payment arrangement without him getting a default which would basically mean that after paying £100 per month for 32 months he would then have a further 6 years before his credit file is repaired which would be three years after my bankruptcy disappears. On top of this he has a £4500 tax bill just arrived due for full payment which we can't afford so have offered £50.00 per month which will take forever to clear due to them adding interest and surcharges.

So my questions are as follows:
1) will the unsecured part of our mortgage get written into his bankruptcy so we will only have to pay the secured part?
2) Will the overdraft get written into his bankruptcy?
3) Will the tax bill be included?

The only other debts he has is two credit cards plus a small overdraft of £100. One credit card is £1100 which we have used to pay for food and bills which i used for the last time yesterday. We don't have the money to clear this. The second credit card is for £3700 which he used at the beginning of this month to buy a car for £2795 as my car is being taken back by the HP company and we need a car due to me getting to work and also my husband has to collect his daughter every other weekend for overnight contact and she lives 60 miles away. This contact is by court order so he has to do it. This leaves £900 on the card available. He then has a £500 overdraft in his current account which the bills go out of from there every month.

I would like to know your views on the £900 from the credit card. He will have to draw the £500 from the overdraft to pay bankruptcy fees as we don't have the money available to pay it. Will this be an issue with the OR?

We also need to buy the following items:
Cooker (ours over does not work anymore)
Single bed (he has this monday been given overnight contact for his daughter so we need to get a bed for the spare room as we don't have one)
Possibly washing machine (our machine is making cranking noises when washing, it is 7 years old and i don't have insurance to get engineer out)
Dish washer (we need to replace our old one as it leaks but i realise this maybe frowned upon)

Would you see any issue to us purchasing the items with the £900 credit card before he goes bankrupt. I don't want to get him into loads of trouble but we would have to rely on my parents buying the items if we don't buy them on this card.

I have included our SOA which shows us in a minus but we have been managing the outgoings this month okay.

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 834
Partners monthly income after tax....... 964
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1798
Monthly Expense Details
Mortgage................................ 869
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 127
Electricity............................. 63
Gas..................................... 50
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 10
Mobile phone............................ 20
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 300
Clothing................................ 40
Petrol/diesel........................... 120
Road tax................................ 17
Car Insurance........................... 50
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 117
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 20
Buildings insurance..................... 5
Contents insurance...................... 13
Life assurance ......................... 18
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 20
Total monthly expenses.................. 1941

Monthly Budget Summary
Total monthly income.................... 1,798
Expenses (including HP & secured debts). 1,941
Available for debt repayments........... -143
Monthly UNsecured debt repayments....... 0
Amount short for making debt repayments. -143


The last question is the car he brought is over the £2000 amount. Are we able to offer the OR money to keep it if he says we need the car or will it have to be sold and we find another? What valuation do the OR's use to value the car as i think we over paid slightly for it.

What i see fromn his finances is that we could struggle with no money what so ever for years to pay it off but he will end up with a bad credit rating for longer than he would by going bankrupt.

We want to keep the house and can afford the mortgage plus rentals in the area are the same if not more to pay out for each month so we wouldn't gain from rental.

Any advice would be grateful as he is worried but knows that my bankruptcy has effected him anyways so it maybe better for him to bankrupt himself to give us a completely fresh start to rebuild our lives.

Thanks in advance guys

EBD

skylight

The car - you may not be able to keep it. It depends on the valuation on the Parkers guide and how the OR values it. He may also frown big time that a car was bought very soon before BR. If the car is less than £2k though and its needed for work, you may be able to keep it.

Your mortgage - I don't understand a secured and unsecured part? Is the unsecured part just a loan to top up the mortgage in the first place? Do you have the paperwork for this and how is it worded? I ask as its odd for a mortgage not to be fully secured on a property. He is currently responsible for all joint debt.

All his other unsecured debts will be included in his BR. (Tax bill/overdraft etc).


As to buying the new stuff. Mmmm. Apart from the dishwasher, the rest is kind of essential. Once its bought, then there is little the OR can do. Except get miffed and slap a BRO on your OH (as its his credit), But you may find he gets one anyway because of the car bought without any means to pay for it.

EnslavedByDebts

Hi Skylight,

Thank you for your reply. The car was brought on the credit card as he had a job lined up that he was 95% sure was going ahead for £2000 then after we had brought the car and three days before he was due to do the job the customer pulled out so that is why we are now unable to pay the credit card back.

The mortgage is secured on the house but does have what they list as an unsecured loan to pay the deposit and solicitors fees on top. This means that althought the two loans are under one mortgage number there is a secured and unsecured loans.

Do you think it is better for him to go bankrupt now or wait for a couple of months and not pay the monthly payments as he is up to date with all payments at the moment?

nervousmother

The unsecured loan would go into His BR. Any credit he has would also go into BR inc tax bill basically anything he owes up until the date of his BR with a few exeptions (student loans, fines, child support and a few more)

There is nothing set in stone when it comes to cars. Mine was needed for work, valued at 1.8k but they are insisting i pay them £700 if i want to keep it.

I agree with skylight with regards to making purchases knowing your going BR. The worse that can happen is a BRO/U thats if he does not mind having one of those, would it effect him in the future, look into it. but dont go mad, only get essentials. (3 months ago I would not have given that advice but stuff em)

EnslavedByDebts

Nervousmother, i am just worried that the washing machine will die on me and i don't have the money to replace it. I may just get the cooker sorted and the single bed and then worry about the washing machine when it goes. I can't be without the cooker as we are struggling now.

The car was purchased at the beginning of this month. Should we wait a while or just get it done with? He won't be making any payments this month as we can't afford it.

Thanks for your help so far

nervousmother

If you have no option then make the purchases, if you have to purchase a cooker then buying a washing machine wont make much difference. Just be aware that a BRU may be the result.
As it is not long since the car was bought as skylight has said you may get a bru anyway. If you can pursuade the OR that you had no idea he would be going br then you may be ok.
You know wether it is best to wait or not, ours happened really quick for me, OH knew for a while what we had to do, I am glad i did not have too much time to think about it.

EnslavedByDebts

The only thing my husband can say is that we had no idea he would have to go bankrupt as we thought that Barclays were going to be more flexible with the repayments than they have been. He needs the car to collect his daughetr which is 60 miles to her, 60 miles home with her and then 60 miles to take her back and 60 miles to come back home twice a month. He can't do all this driving in an unreliable car and i also need a car to get to work which i had my car but it is being collected by HP company.

I think that no matter what a Bru/o is not gonna effect him anytime in the future if he gets one as the only one that effects him is the £500 credit which he won't get now because i am bankrupt.

I hate my life right now as everyway we turn seems to bring more rubbish our way. I went bankrupt in the hope to deal with his stuff but everyone is not willing to help us. I hope it gets better on the future

nervousmother

It will get better, yes a few hurdles to get accross but things do improve. I get the feeling although you are BR you are still worrying about the debt that has now passed to OH, if he was to go BR then no more debt.
The banks are stupid sometimes, cant see whats right for them never mind you, they will get alot less once he goes BR.
Me and OH went BR same time, found it easy to do that way having him for support.
With regards to the BRU, then if you feel that way (and i do agree they are not that bad!) then do what you feel you need to with regards to the new purchases, after all you wont have the money once BR to replace the items.

headoutofsand

Talking of cars and BRO/U I sold mine, business asset 2 months before BR for £3000 and the OR didn't bat an eyelid. I also used credit a week before taking £1000 out of the well Overdrawn OD. I explained to the OR this money was for fees and living, no problem. Where the car purchase is concerned the OR may turn a blind eye, depending on circumstance.;)

EnslavedByDebts

Nervousmother,

I think you are right that although i got rid of my stuff i am still worrying everyday about his moneys as it has an impact on my life still.

EnslavedByDebts

Thank you for that word of advice headoutofsand. I will just take whatever they throw at us. It is what it is i think.