Bankruptcy - what to do about creditors u have paid?

skylight

If you owe someone nothing, then they are not a creditor. The accounts should be closed and if they are not, then close them now (credit cards for example). Just include everyone that you owe something too, however small.

If however, they are a credit card or bank account that is still open but you owe them nothing, then you will have to declare them (if you do not close them beforehand) as you will not be permitted to use them after BR.

Shiku_2

So I take it the ORwill beocme aware of the creditors that have been paid during his/her interview and not at the initial bankruptcy petition?

sieve

Shiku wrote: »

So I take it the ORwill beocme aware of the creditors that have been paid during his/her interview and not at the initial bankruptcy petition?

Yes that's correct. They will go back through at least one, possibly several years' worth of bank statements so they will see who has been paid and when.

Shiku_2

Oh cr*p.... will they look intop how I spent my money in that year? Not the one that got me into debt as I never spent this anyway..... i was pracxtically robbed of it, but the money from my jobs/income that I could have used to pay back my creditors.... will they get miffed if I could have paid creditors more then I was paying? This was the case, but only on some occasions when I decided I had enough and went out on the weekends.... though I have had no holidays or anything like that for around 3-4 years....

skylight

The OR will get information from your bank accounts, creditors, your credit file and so on, so if you don't tell them at the interview (you don't have to unless they ask - any answer whats asked) they can find out for themselves.

You also have to list all banks etc you have had accounts with in the last 2 years in section 5.4 so if the debt is with one of those then he will also know because its listed.

Shiku_2

Good luck with the 8th Sieve, only around the corner now, did u have to do the full 12 months? How has it been?

Shiku_2

I also own a property which I do not live in but rent out, however, I will have to move into it very soon and there is negative equity in in i do have arrears on the mortgage but my lender has agreed to capitalise these if I maintain payments for 6 months..... does anyone know what my position is with regards to this? I cant afford to have to property taken from me as I will have nowhere to go, currently living with parents but home is very very cramped and they have asked me to move out if poss!! I would still have tenants in part of the property and live in part of it..... anyone know where I stand?

skylight

If you are in negative equity with the property then the OR will not ask you to pay up or sell the place to realise an asset - there isn't one. BUT you need to be living in it. If you are not, then he will regard it as a business asset and will force a sale.

If you are living there, no equity AND the bank are happy for you to continue with mortgage payments and have agreed to pay off the arrears then all should be AOK. The OR will offer (or you can ask) to sell you back your beneficial interest in the property. You will have to pay the nominal £1 fee plus charges of £220ish for this - then the property is yours wholely again and the OR will have no say over your equity at any time. BUT - once this has happened, if at any point you cannot maintain your mortgage and need to get rid of the property it will not be included in your BR estate and will be a new debt. So think hard about whether you can keep up with your payments etc. Also - are there any secured loans on the property?

You will need to declare the income from your tenants on your SOA though and he may want to see a copy of the tenancy agreements you have with them (again, he may not - you just won't know unless it happens).

Shiku_2

No there are no other secured debts on nthe property, though like I said I am not living in it at the moment but will be very very soon, will the OR need proof that I am living there now....I'm worried they will think I am trying to keep the property as an asset....also would the OR notify my lender of BR or is this something they will become aware of anyway? I have another 16 days before BR so I have time to think.... but if I can't live at home then there is no way I can afford to rent, if I live in my own property I will still keep tenants in there in order to assist with monthly mortgage payments and then pay the rest myself..... so so worried..... too many questions to get my head around!

skylight

If you are moving back in there, then the OR should give you some time to be able to do so - but still needs to be done ASAP.

And they will tell your mortgage company - they tell everyone you owe money to. But its of no concern to your mortgage company if everything is being paid off nicely; you may have to remind them of the arrears agreement.