Should We go BR?

totallydepressed

Hello,

I live my partner and 3 daughters (5, 3 and 2). We have a mountain of debts =(

One has gone to court already (Tesco for £25,000) and we got a time to pay, but we're just about to miss our 3rd payment and so we're in trouble. I don't know what will happen now? There are others about to go to court. I live every day in fear of debt collectors knowcking at the door or calling and I just feel like I can't do it anymore, it's been years.

We have lots of huge debts: Tesco £25,000, Northern Rock £15,000, Coventry £21,000, MBNA Credit Card £8,800, Tesco credit card £6000, Council Tax £3000. Nationwide Credit Card: 900. Plus Utility debts. I'm not even sure if that's them all, it's probably not. Anyway we're not managing to pay them all, not even close. I don;t even know how we ended up with so much debt. My partner has been employed for the last 10 years, but when interest rates rose etc we just couldn't afford the payments anymore.

We have a mortgaged house, we took a 100% mortgage so it's mortgaged for £90,000 but probably only worth about £70,000. It is only in my partners name. Will we definitely lose our house if he goes BR?

Also our car is bought on HP or a loan I'm not sure which and can't find docs but that's up to date with it's payments. Will they take the car and sell it? Partner needs it for travelling with work so I hope not! Most of the large debts are solely in my partners name.

Should we go BR? Our outgoings are more than our incomings just now and the creditors are refusing lowered payments. I really don;t want to lose our house but I don't know what else to do. We'd probably have money left over to pay from our wages after BR so how long would we have to do this for? forever? Also do they dictate how much we get to live on? And what we can spend our cash on? =( We have no other assets of any value.

Phoned the Debtline and they said he can't go BR without a charge for payment or summary warrant, not had these but have had debt go to court. Can we even go BR?

Help =(

izools

Sounds like BR is the best option.

If you aren't in (serious) arrears with the mortgage, you'll be able to keep the house. It is in negative equity and probably will be for a while to come, so once you are discharged from the BR, you will have the option of "buying the interest" in the property - i.e. the Official Reciever ownes the equity in the house when you go BR, i.e. he has an "Interest" in the property, which you or a friend / relative can purchase back from him. If the property is in big negative equity, the OR typically sells off the interest for next to nothing.

It seems the right thing to do in your case, you will feel unimaginably better when you do it, and for god's sake do it before one of your creditors gets a notice of execution from the court!

You need to fill out a SOA (Statment of Affairs) detailing your income, expenditure, debt, and reason for being in so much debt. The forms can seem daunting at first, but they're OK. Just make sure to give yourself headroom in the Income / Expenditure, and remember that the Official Reciever is only entitled to a percentage of surplus EARNED income, and NIL of your benefits, if you recieve any.

The fee is ~ £500, I sold my laptop to be able to pay the fee, but it was worth it! I quickly had enough surplus income to get another one second hand *cough* my other half, I mean, yeah. Other half had enough to get one second hand....

LOL just remembered, when I filed the SOA at court, the lady at the counter asked if I would like to pay by cheque!! I said, "Do you really want to take a cheque off someone filing for Bankruptcy?" and she chuckled, "OK cash will do fine, sir"

totallydepressed

I wasn't sure if maybe A Trust Deed would be better? We do have spare income after Mortgage etc without all the debt, it amounts to roughly £500-£600. Would this qualify us for a Trust Deed?

izools

Is that a comfortable £500-£600?

If so, then that equates to £30,000 over five years. From what you've written above, the debt amounts to almost £80,000 excluding the mortgage.

That may just qualify you for an IVA (as you can afford to clear 37.5% of the debt over five years), normally the IP will look for 40% of the debt cleared over five years, so you could go down the IVA route.

But given that this would have similiar effect on your credit status as Bankruptcy, and given your amount of debts / lack of assets, BR seems the better option.

And whatever route you do go down remember to fill out the income / expenditure liberally, as it is very easy to leave yourself short if you don't!

Good luck, and keep us posted

totallydepressed

If I go BR or take a Trust Deed (Scottish IVA) will we get our house back after we are discharged? Will they make us live off pittence? We already do struggle and there's no point if life won't get better!

oh, it's a comfortable £500 certainly. My partner earns £48K a year, but it's all taken up on debt.

izools

When you go BR the OR becomes the trustee in your estate.

He will own the equity in your house.

During bankruptcy, a friend or family member can buy the official recievers "Interest" in the property, so they become the "beneficiary", effectively owning the equity in the house.

You can also buy the equity in the house back from the official reciever, and if it is in severe negative equity the official reciever typically sells this for next to nothing, unless he thinks the market is likely to skyrocket soon.

In an IVA they ask you to remortgage after four - five years if their is equity in the property that should be released for the benefit of your creditors, but the hosue remains yours throughout. I'm not sure, but seem it reasonable to assume, that a Trust Deed is the same / similiar

If it's a comfortable £500 then a Trust Deed would be a better option, at the end of the day you've got nothing to loose and everything to gain from applying for a Trust Deed and if it doesn't go through, you then know that you need to go down the BR route; but given the income I reckon a Trust Deed would go through, just

They will only make you live off a pittance if you don't integrate some leeway into your income and expenditure sheet, before you file for a trust deed, show us your income / expenditure and we'll look over it to ensure you've left yourself enough to live off without being excessive (in which case they'd ask you to re-do your income / expenditure)

Good luck, and keep us posted!

totallydepressed

Incomings MONTHLY
Wages: £2759

Outgoings
Mortage £449
Council Tax £130
Utilities £140
Housekeeping £450
TV License £12.00
Maintenance Payments £400
School Meals £10
Childcare fees £10
Phone £70
Mobile phone £30
Emergencies £30
Northridge £282



Left for Creditors: £696

Priority Debt Total Owed Monthly Payment
Mortgage £998 £100

Left Over: £596

Sorry thats all over the place I dunno why it won't line it up properly. Anyways my housekeeping might seem high, but food etc these days isn't cheap and I do have 3 under 5s. The maintenance is for my partners other kids, was set by court and can't be changed. Northridge is HP for the car, which is up to date.

izools

totallydepressed wrote: »

Incomings MONTHLY
Wages: £2759

Outgoings
Mortage £449
Council Tax £130
Utilities £140
Housekeeping £450
TV License £12.00
Maintenance Payments £400
School Meals £10
Childcare fees £10
Phone £70
Mobile phone £30
Emergencies £30
Northridge £282



Left for Creditors: £696

Priority Debt Total Owed Monthly Payment
Mortgage £998 £100

Left Over: £596

Sorry thats all over the place I dunno why it won't line it up properly. Anyways my housekeeping might seem high, but food etc these days isn't cheap and I do have 3 under 5s. The maintenance is for my partners other kids, was set by court and can't be changed. Northridge is HP for the car, which is up to date.

All of that looks fine except the phone, which you'll need to reduce.

You can however reduce it and add in £20 for broadband, which you need for working when at home

Northridge HP will have to be integrated into the Trust Deed; otherwise they will be getting an unfairly large piece of the pie when compared with your other creditors, which is not permitted under a Trust Deed or Bankruptcy.

Add in some clothing costs, £15 a head for you and the kids, and edge the utilities up a bit, as you have three children, I can't see £140 / month covering gas, electricity, and water, for a three child family!

Oh, TV Licence is £13 a month now :P

I think given that the car HP may need to be integrated into the trust deed you'll be onto a winner, good luck, and keep us posted!

totallydepressed

Incomings MONTHLY
Wages: £2759

Outgoings
Mortage £499
Council Tax £130
Utilities £190
Housekeeping £450
TV License £12.00
Maintenance Payments £400
School Meals £10
Childcare fees £10
Phone £50
Broadband: £20
Clothing: £50
Mobile phone £30
Emergencies £30

£878 left for creditors.


Priority Debt Total Owed Monthly Payment
Mortgage £998 £100

Left Over: £778

Does this look better? I wanted to keep the Northridge HP cos surely if I throw it in with the debt I will lose my beloved car?! =( I've had it for 2 years paying £222 a month, it's a ten grand car (nothing fancy just something that fits 3 car seats in back) So I've paid about half? I really need it. I know it says 282 just now but thats paying arrears from a while back and is only for another 2 months. My argument for keeping the car was that other half needs it to get to and from work, and also for travelling down south with work.

I also noticed I made a wee mistake on the mortgage, is 499, not 449! Fixed now.

My Tv license is deffo 12 lol, not even quite, it's like £11.79 or something!

izools

totallydepressed wrote: »

Does this look better? I wanted to keep the Northridge HP cos surely if I throw it in with the debt I will lose my beloved car?! =( I've had it for 2 years paying £222 a month, it's a ten grand car (nothing fancy just something that fits 3 car seats in back) So I've paid about half? I really need it. I know it says 282 just now but thats paying arrears from a while back and is only for another 2 months. My argument for keeping the car was that other half needs it to get to and from work, and also for travelling down south with work.

I also noticed I made a wee mistake on the mortgage, is 499, not 449! Fixed now.

My Tv license is deffo 12 lol, not even quite, it's like £11.79 or something!

Ah well maybe it's just going up to £12.95 soon then... not checked,

Re: the HP on the car, as long as you've paid more than half then they have no claim to reposess the car. I forget the exact law which stipulates this, one of the more experience members may be able to advise, but as long as you've cleared atleast half the HP they can't reposess.

And in any case, the car is an essential asset to your family, due to your children, and is therefore protected in an IVA (again, would imagine the same is true for a trust deed).

Seems to be looking good so far

totallydepressed

Maybe it is! better not lol =p

I'm sure it was taken out over 4 years, and I bought it in Oct 07 (when times were good!) so it should be about halfway. I can't find the agreement anywhere, but it seems right.

When googling I seem to keep seeing the the trust deed peeps will sell anything, but not your car if you need it for work. So I will keep banging that drum.

I feel better now, the world might not end after all! My only worry now is if the creditors take action before the trust deed gets set up =|