Questions about going Bankrupt - help!!

Little_Miss_Scrimper

Hi :wave: wonder if anyone can answer some questions. My best friend is deciding wether to go down the bankruptcy or IVA route. Basically his current debts are not covered by his full time salary. He has battled the last 2 or so years doing another job running a website to make up the shortfall. All this stress is leading to him breaking down pretty much every week. I have got alot of information from MSE (which has been a god send) with regards to what he should do and we are going to call CCCS this week.

However, he is worried that if he were to go bankrupt can baliffs come into your house and take things like the sofa, tv/dvd etc or any of his son's toys/games and other stuff that was paid on credit? He rents his parents second home but the contents are his. We've talked about 'hiding' his contents but I am hoping that won't be neccessary. Most of his stuff we have ebayed over the last year anyway!!

Can you also have a current account when you are declared bankrupt? His account does not have an overdraft facility and he just wants an account that his wages can be paid into.

1 last question!! Do your employers find out? He wouldn't loose his job but where he works the people are not very descreet and if HR find out - the whole workplace does. It sounds awful but that's the way the company is. The last thing he wants to happen is to be driven out of his job because everyone is talking about his financials.

Thanks loads for your help x :grouphug:

Addicted2Chocolate

possessions like furniture, cooker, fridge, tv, video, dvd, stereo etc are basic domestic requirements and would not be taken by the OR because they are not part of the bankruptcy estate. childrens toys and games also would not be taken. The sort of asset that may be taken would be a relatively new itenms such as a plasma tv bought very close to bankruptcy.
Do not hide any of his assets, just list them all on the statement of afafiors. failure to disclose assets is a criminal offence.
If he has an account which is in credit and used for receipt of income, the OR will send a letter to the bank, notifying them of the bankruptcy order, which basically says it is up to the bank to decide whether to allow account to remain open. it is up to the bank, eg Abbey has policy not to offer any banking to undischarged bankrupts. If the account did get closed then he could open a new basic bank account.
Employers are not normally notified of bankruptcy. But of course it is advertised in the local paper and london gazette, so in theory it is public knowledge.

Little_Miss_Scrimper

Thank you so much for a quick answer! I thought they couldn't take basic domestic requirements in your home but I think he has watched too much tv with gruff baliffs coming in and taking the shirt off your back! He wouldn't believe me so I'd said I'd check with the MSE experts before we ring the CCCS. Thanks addicted2chocoate xx

Addicted2Chocolate

no problem, tell him to trust me, i deal with 100's of bankruptcies every year! and the way cases are rising it will probably be 1000's a year soon....

Little_Miss_Scrimper

I was hoping you would reply as have read a few posts whilst researching and you were giving helpful advice to people so I trust you!! Thanks a lot. I have been drumming MSE into him for about 6mths or so and he is finally given into the MSE way and had his lightbulb moment. Bit too late now but hey.

How much does going bankrupt cost by the way? I've been reading different figures. After a year is your credit history wiped clean? x

jesster_2

My OH declared bankrupt last week: it cost him £460.

It's not 'wiped off' after a year: you're discharged usually after 12 months (some sooner, some later, depending on conduct etc) but it stays on your file for 6 years, and indeed most financial companies have a question on their application forms saying 'have you EVER been declared BR'.

The arrangement that the OR makes to recoup some of the debt via your surplus earnings i believe goes on for around 3 years? Not sure if that's right, it may be longer, but someone more knowledgeable will be along to give you the proper answer!

It will make it more of a challenge to get a mortgage, even years later, and credit obtained later is likely to be at a higher rate because of the perceived risk. So it's no picnic, but if it is the right thing to do then it can be a real weight off someone's shoulders.

Good luck, just make sure he gets good advice from CCCS etc.

All the best

THE_LONE_RANGER_4

hi, the 3 year deduction from your surplus wage is correct,a person i work with has finished his bankrupt saga had to go to a urban lender for a mortgage it cost him more, but 24 months later moved to a high street lender with no problem as for loans credit cards id stay away plus join a credit union in your area always a good idea,but your on the road back now so well done

paul10mm

Hi ya
just to let you know going bankrupt is not an easy option
Its the best option only when you have been given all the advice and thought through what might happen.
We went bankrupt on the 13th of feb saving the money up was hard but seeing the judge and doing the the paperwork was easy the people were very nice and polite
We had our meeting yesterday with the OR a face to vace one sometimes there over the phone but i think as we owed so much they wanted to see us,Again there normal people like you or i they are not judgemental just be honest and open about everything Dont what ever you do let your friend hide anything if he goes bankrupt he will find the people he deals with very fair they wont take everything you own they are only intrsted if you bought a new car or plamsa tv with money you han no intention of paying back,Above all listen to them its a new start it took us 10 days to get a co-op cashminder account its very good do all our direct debits and standing orders can bank on line and its an electron card not the end of the world we have been allowed to keep both our cars as we need them for work and they have decided we dont have to make any payments at all to our crediotrs
Bad side no credit for 6 years but as im rubbish with money for me its the best thing that could happen!
Just tell your friend take they advice he gets and Use it one way or another he will get a better life
Regards Paul

Clasics

First post so please be gentle! I'm asuming bankruptcy is not really an option if you own your own house (or have any equity in it)? Would the OR actually make you homeless?

paul10mm

YES your right its not great if you own your own house we live in a rented property so we had no assets for them to take like i said get advice from the CCCS or whoever they know what is best for you on an indevidual basis
Its not something i would say is easy it took me ages to get my head out of the sand and i had spent all my savings trying to pay them off with hindsight i should have payed all my wifes debts of and just gone bankrupt myself!

kevker

On the original post about ermployer knowing. The OR does not inform your employer (as A2C says), but he will be given an NT tax code (the inland revenue is not entitled to tax from a bankrupt), so the HR department will see from this that he has gone bankrupt. Having said that, I declared bankruptcy last May, and the NT tax code has never been applied to my wages. Why I don't know, but it just means that the OR will claim the tax back from the Inland Revenue at the end of the financial year.