Only Dull Girls Write Diaries...Myth Broken!

hypno06

I don't envy you having to make that sort of decision.......

.....but if it any consolation, it told me that I should be BR too......

The main thing is that you are looking at all the options. Chat with the BR guys - especially Rog2 if he is about. HMRC made him BR if I recall correctly and he still managed to keep his house. PM him if need be, and I am sure you will get some good advice.

rog2

Rainy wrote: »

Hi all, just a quick update!

I have done the CCCS remedy online and they have recommended bankruptcy, not really to my surprise. I am on the tail of all the BR forum threads now too!

I would rather volunteer for bankruptcy than have a petition against me so I feel a sleepness night of decision making coming my way :huh:

Hi Rainy - Hypno asked me to 'look in' on the thread as I had equity in my house when I was declared bankrupt by HMRC and she felt that my experience may be of some help to you.

Firstly, I am pleased that you have sought advice from CCCS, and I would advise you to start a thread on the 'Bankruptcy and Living With It' board - http://forums.moneysavingexpert.com/forumdisplay.html?f=136
I was declared bankrupt in 2006 and I had considerable equity in my house - at least £70k - and had to deal with the situation.
Now, let me reassure you on a couple of things:

• Bankruptcy is NOT the end of the world. It is a legally acceptale way of dealing with otherwise insolvale debt problems, and, properly handled, it is designed to give you a 'fresh start'.
• There is little 'stigma' attached to bankruptcy these days
• Bankruptcy deals with ALL of your debts - the only exceptions being 'Student Debts' and some 'Council Tax' debts - the moment you are declared bankrupt, those 'debts' are no longer your problem

• In most cases the 'Bankruptcy Period' lasts for just 12 months, and many bankrupts are 'discharged from the obligations of bankruptcy after just a few months
• Only if you have disposable income, after taking into account your necessary expenses, will you have to make a contribution to your creditors through the imposition of an IPA (Income Payment Agreement) - An IPA will last for no more than three years

That said, if you have equity in your house, then the Official Receiver has a duty to 'realise' that equity for distribution to your creditors. Basically your 'Beneficial Interest' would be the difference between the 'sales value' of the house and your outstanding mortgage. If the house is jointly owned, your BI will be half of the difference, and the OR will 'vest' his interest in that.
This does not mean that you would be immediately forced out of your house - the OR will, normally, offer you, your partner or a close relative/family friend, the opportunity to 'buy back' your BI and, normally, you would be given up to a year to find a mortgage/finance and conclude the purchase of your BI.
Only as a last resort would the OR 'force' a sale through the courts and, if this were to happen, then the OR would 'account' to your partner by giving him half of the proceeds of the house.
I realise that this all sounds a little daunting, but, in reality, it really isn't that bad - the I would be calculated using the latest sales figures for houses in your area and, if you are unhappy with the BI quoted, you can get independent evaluations and choose to use the lowest estimate.
In my case, the BI was estimated at just under £70k, by my trustee, and we were not unhappy with his estimation. We were able to negotiate, with the trustee, and ended up buying back my BI for approximately 80% of the trustee's initial valuation. Our offer was accepted 'in full and final settlement' and my wife was able to secure a mortgage through her Bank. I appreciate that, after 15 'mortgage free' years I am now saddled with a mortgage, but we did get to keep the house.
Just avoid those 'companies' who will offer 'special' mortgages to bankrupts - this usually means higher and front loaded interest, with heavy 'get out' penalties - if you look you will be able to get main stream mortgaging.

Now, that said, and with the advantage of 'hindsight' it may have been possible, because of the amount of equity in my house, for me to have avoided bankruptcy altogether and, instead, have gone for a 'Full and Final IVA' by realising the equity in my house. This 'option' was not explained to me at the time, so, as I stated, this is said 'with the benefit of hindsight' but you might like to go back to CCCS and ask them if this could be an 'option' for you - it may, or may not be.

If it is not an option, then I would, again based on my own experience, opt for a self-petitioned (Debtor Petitioned) bankruptcy, rather than allow one of your creditors to petition for your bankruptcy. Whilst the end result will be the same, it is my opinion that if you petition for your own bankruptcy then you would be more in control of the situation. As a Creditor Petitioned Bankrupt it was my largest 'creditor' (HMRC) who was given the option to nominate my trustee - although the trustee must work within the Law and should not favour the creditors unfairly, I can not help but feel that there was a 'certain degree of bias' in the way that my trustee handled my case. Perhaps that's just me, but others have said much the same.

Anyway, I hope that the above is useful for you - I will be only too pleased to answer any other questions that you may have - so Good Luck, and I look forward to seeing you on the Bankruptcy Forum.

Rog2

hypno06

Thanks Rog :T

Rainy_2

Thank you so much Rog2 :beer:

And to you hypno :beer:

I spent most of yesterday afternoon reading your threads rog2 and the scariness and panic of BR that I had held on to has melted a little. Thank you. I am so glad that it worked out for you and your family.

I am the sole owner of the house and the equity in it is 60-65k so it does make sense that BR is the better option. I think it's the emotional attachment to the equity in it really as it is the inheritence left to me from my dad. But I realise it is money and not a person!

I doubt very much that my other half would be able to get a mortgage on his salary (minimum wage as an apprentice) nor want the responsibility of one!! I struggled to get a 50K mortgage on an okay salary and perfect credit score plus hefty deposit/part cash payment in 2006 when the market was considerably better.

But now knowing that there is a 12 month period for the possibility of buying back the BI is hopeful. I will be in further contact with CCCS tomorrow (when no one else is in the office!) and hopefully get further advice.

Thanks again for your input and words of support :T

Rainy_2

Feeling very drained from thinking about this all the time! _pale_

The usual flurry of collection letters through the door today. Mostly from those who are being far from cooperative - namely Barclaycard and The AA Personal Finance. I will keep on keeping on at them though.

On the up side, M&S CC has accepted my £1 monthly payment short term, adding to the list currently at Alliance and Leicester loans and Halifax CC. Short list against all my creditors but still happy to have seen it grow by one!

Demands today ranged the extremes of £7,899 (AA Loan) to... £75 (old 3 mobile broadband contract dongle thingymebob), and I picked up a new debt recovery company to add to the mix(the thingymebob again), plus the delightful threat of having a debt collector pop round to my house for a cup of tea (although worded slightly more alarming than that, as you can probably imagine) from the luvvies and The AA and their debt collection company.

Also on the mat was another job rejection letter...boo. :mad:

I have sat down and tried to work out my stat demand and my options til my head hurt.

All in all, an eventful day which called for more tea and a (free!!) danish pastry. Yum

rog2

Rainy wrote: »

Also on the mat was another job rejection letter...boo. :mad:

I can sympathise with you, there, rainy - have been looking for work for two years and could, probably, publish a book on 'rejection letters'

But things will get better - the threat of bankruptcy does not help.

Just one point - once you receive a Statutory Demand, you have 18 days in which you can try and 'negociate' with the creditor - it might not seem the best option, given your current situation, but you may be in a stronger position than you first think.
Many creditors who serve a Stat Demand on a debtor, do so as a way of 'frightening' that debtor into finding the money to pay them before the SD period expires. Not all creditors will carry the threat of bankruptcy through to its final stage as they, the creditor, will then have to pay the Court fees and Solicitor costs on petitioning for your bankruptcy.
These costs can amount to more than £2000 and, although they will be added to your debts in bankruptcy, there is no guarantee that that creditor will actually see any of his money back. In fact, he will be treated in exactly the same way as all of your creditors and will not receive any preferential treatment or status from the OR.
The serving of an SD only gives that creditor the option of petitioning for your bankruptcy - it does not oblige him to do so.
Out of interest, what, roughly, is the amount of 'debt' to that particular supplier?
On the SD, you should find the name, address and contact number of the creditor's solicitor - it may be possible to negotiate with them.

hypno06

Rainy wrote: »

Feeling very drained from thinking about this all the time! _pale_

Whichever way you deal with this debt it WILL be draining - you will feel exhausted just thinking about it....along with the "what ifs" that pop into you head left right and centre.....yet when you are shattered, you still can't sleep!

But interspersed with the weight of it all, will be flurries of energy - sieze them as they arrive, whether to deal with the debt, or to deal with other stuff in life, and you will manage to get a whole lot done in a very short space of time.

When you reach a conclusion, whether that is an arrangement with your creditors on a DMP, or the decision to go BR, whether yours or your creditors' decision, you will find that the weight is lifted somewhat and you can start to get on with life again.

In the meantime, keep going, rest when you can, use the energy when it is available, and know that you are not alone - you have support here, so use it, whether to laugh, or cry!!

Rainy_2

Thanks to you both for your kind words and support

The debt is one of the more significant ones - £6280. I have decided to try and negotiate an arrangement with them, on the stance that they would actually get more out of me in the long run that way than going forward with the BR petition, due to the number of creditors and priority creditors. I can but try, if they are not happy with that then I will weigh up the BR options again, as I am almost certain I will have to go BR eventually.

Funnily enough, I knew I was heading towards closing down my business and made an offer of a payment plan to these people before anyone else. They rejected my offer of £250 per month as it would take too long to pay back (!) however they are now faced with the true evaluation of my pro-rata payments available of.....£1 per month. I bet they are wishing they hadn't been so hasty now...! :rolleyes:

rog2

Rainy wrote: »

The debt is one of the more significant ones - £6280. I have decided to try and negotiate an arrangement with them, on the stance that they would actually get more out of me in the long run that way than going forward with the BR petition, due to the number of creditors and priority creditors. I can but try, if they are not happy with that then I will weigh up the BR options again, as I am almost certain I will have to go BR eventually.

That's more like it, Rainy. :T :T

Why not have a word with Business Debtline on 0800 197 6026 - https://www.bdl.org.uk - they might be able to help you try to negotiate.

Good luck.

Fire_Fox

If you aren't sure what you want to do, why don't you go onto a DMP for a few months and then reassess the bankruptcy option? You may find a job, your partner may get promoted, you may decide you feel ready to sell up and move ... Also is it possible to let a room in your home? Up to a few thousand this is tax-free income.