Guide to wiriting reasons for bankruptcy

Bethankim

I thought id write this to help anyone trying to fill out their bankruptcy forms and not sure what to write as reasons.

There are two schools of thought keep it brief or write an essay. it is up to you but the basics need to be the same. If yours is a complicated story its best to put a bit more info in that a more simpler one.

I have put in examples of what to include and suggestions for how to present the information, i have not used real examples. I am not saying i have all the answers i dont but i want to help and i have sucessfully helped other memebers tweak thiers.

Chronological order

The Official reciever will be trying to get a picture of how you ended up filing for bankruptcy it is easier to break down your paragraphs into chunks - new paragraph for each bit of new information such as a loan, or when a problem arose.It makes it easier to read and is a clear way of presenting information.

What essentials need to go in?

Dates - try and include the year you took out credit for each debt you have
creditor - include who the original credit was with
what it was spent on - if you used it for living costs say so, if it was to consolidate say so, dont lie
date when difficulties arose - and what you did - e.g 2001 lost job, took a new credit card.
advice - when you took advice

example:
In 2001 I took out a £7000 loan with Egg, I used the loan for house improvements and purchasing a car for work. I met all my payments until 2002.

example:
In 2001 I took out a £7000 loan with Egg, I used the loan for house improvements and purchasing a car for work. I met all my payments until 2002.
My relationship broke down and i was forced to find a new place to live. This incurred extra costs.

I applied for and was accepted for a new credit card with Mint, i used y credit card to meet my essential living costs.

example:
My marriage ended in 2007, until that time i had always managed my finances well, however my husband/wife managed our household finances i was unaware they had taken out a large loan against our house. I did sign the loan agreement but did not question my ex husband/wife about this. I regret this now but am faced with £25000 of which i am jointly liable.

Things to avoid
Try and keep it as clear and concise as you can, using lots of waffle and emotional language can get in the way of the facts. The official receiver is only really interested to see when, what and how.
It can be a fine balance between giving lots of details and straying into berating yourself with little facts. It will mean the OR is likely to spend longer trying to get a clear picture and can add to your stress as you try and remember details.

example

I took out loans and credit cards a few years ago, i was really stupid and just spent it all, i feel so ashamed and really stupid but its done now and im hoping it will just get sorted. my life is a mess, my wife left with the dog and my children need things so i have been spending more than i should. I have lots of credit cards and not really sure how much i owe, i think its quite alot, my job doesnt pay very well and i always have more month than money so i borrow off my parents and im in a bit of a pckle really so im hopng bankruptcy will be a good start, i know i have stuck my head in the sand a bit sorry.

i hope that helps it is not really possible to write a template because everyone has individual circumstances.
Above all be honest, if you gambled then say so, its better to be upfront than be found out later.

If you reallt cant remember dates and amounts then be approximate. when i went through mine with my OR she worked out id been a year out on a date. but was fine. because i have been chronilogical ( started from the date i took out credit that lead to my problems, not the first time i took out credit)

example from mine (opening part mine did go on longer)
It is with regret I find myself in the position of petitioning for bankruptcy. I have £30,000 worth of debt with no ability to pay my creditors as I am now in receipt of benefits due to my ill health. Up until my debts became unmanageable, I had always been able to make payments on time and had an excellent credit rating.

Over the last three and half years my personal debt has become a major problem. My marriage ended in April 2006, despite our best efforts to remain together. My ex-husband left the marital home in July 2006 and I found the experience very difficult: I agreed to pay the majority of the mortgage as I was remaining there with my son. I also agreed to take out an 8000 loan to repay my ex-husband’s parents the money they had lent us to buy our house.

Until I took this loan, I did not have excess personal debt beyond a modest overdraft and mortgage. I did not seek legal advice which, with hindsight, was a mistake.


I hope that helps, i am happy to help anyone with thier statement, Im not much good on all the technical stuff but words is my thing :D

larzie30

Wow, thanks Beth, that is really kind of you and very helpful, i have been wondering where i would start when completing that part, and yes I have been known to waffle (currently trying to get a college assigment down from 3000 to 2500 words lol)

Thanks again

Lara

antarctica

Excellent and very helpful for people. Thank you
A
x

Bethankim

your welcome, now if only i could spell i would be a happy woman, but m dyslexic brain doesnt see them. :D so it is always a case of read and accept the typo's lol

antarctica

Bethankim wrote: »

your welcome, now if only i could spell i would be a happy woman, but m dyslexic brain doesnt see them. :D so it is always a case of read and accept the typo's lol

It's perfectly readable so I wouldn't worry about it.:j

fatou256

i am dyslexic too bethankim and i must say you put it a lot better than i did on my form.

Feelingfoolish_3

Hi Bethankim
Thank you for this, it's really useful.
If I could ask a question which is bothering me about admitting what I do for a living on my form. I have been a debt adviser for many years and now find myself looking at bankruptcy (40K of debt). Do you think in your opinion I should say that I am in the industry on my form? I could elaborate on my job title which wouldnt necessarily need to include the fact that Im a debt adviser. (its sometimes very difficult advising yourself) hence the opinions and advice on here is fab. As yet I havent defaulted but thats cos I live on credit.....

Thanks in advance (to anyone also)

So_Sad_Angel

Hi Feelingfoolish

The `reasons ` for BR should be frank & honest. The OR will not judge you at all...thats not their job.

I understand exactly where you are coming from.After many years in the Financial markets I became so desensitized to the risk of `debt`...credit held no fear for me & I used it , I thought fairly responsibly, for the best part of 30 years.

What I did not expect to happen was that something would upset the applecart & mean that I could no longer meet my commitments ....& then I realised that it can overtake you very quickly & get out of control.

I wonder how many doctors get ill because they don`t `go` to the doctor or how many policeman drive too fast because they are used to it on a daily basis.

Beth - Honey....great thread !! You are most definately a star!!!:A:A

Angiexx

tigerfeet2006

Beth you angel :A This is absolutly superb and will be a great help.

Bethankim

thought id bump this one up, as it might help anyone today trying to fill forms in today

debtinfo

This is an excellent guide, I just wanted to add that as some OR's are now dealing with some cases without an interview and purely from the SOA it is ever more important to put as much detail (not waffle) in as posssible as it could save you an interview. It would be a shame to have to do an interview just because you missed out a date