Bancruptcy Advice Please

Kemosabi1976

Hi All

I have been considering BR for nearly a year now but always viewed it as such a last resort that I have struggled through 12 months juggling debts in the view that it was somehow better than the alternative.

As it stands I guess I now owe more than i did with late charges etc accumulating on the debts so I have finally decided to tackle this head on and not waste another year of my life.

My real worries are twofold

1) I am a partner in a business and as a result of the ecomonic downturn we have had to downscale largely just to ensure the business continues to trade, this has led to my salary being cut in half. As a result I can no longer afford all of my outgoings and have begun to fall into arrears. I have cut out any unecessary spending but just cannot survive on my income and pay the bills.
I am worried that as this is a voluntary salary cut (although I have no choice) could this cause me any problems with the BR process.

2) Biggest worry is the house - I know that there are no guarantees but I want a general idea of whether we would lose it. £315k joint mortgage with my wife, the house is worth at best £275k we live there with three kids and am terrified of being kicked out on the streets.

Now I have made the decision to do this I will contact one of the debt charities but any advice at all would be really welcome.

Many thanks

Kemosabi1976

Sorry - got a thousand questions in my head at the minute, if anyone is kind enough to post a reply perhaps some light could also be shed on this ???

The mortgage is joint but all the other debts and bills are in my name as my wife has been full time mum for last three years. She is now back at work with a small income and WFTC, will me going BR affect her financially in any way??

Also I have a car which is leased (needed for work and drop kids off at school) is it likely this will have to go? and finally my wife owns her own car would this be classed as an asset in my BR or as its hers is it kept seperate.

Thanks again

tigerfeet2006

Kemosabi1976 wrote: »

Hi All

I have been considering BR for nearly a year now but always viewed it as such a last resort that I have struggled through 12 months juggling debts in the view that it was somehow better than the alternative. Well done on realising it is a last resort and well done on knowing when to seek help.

As it stands I guess I now owe more than i did with late charges etc accumulating on the debts so I have finally decided to tackle this head on and not waste another year of my life.

My real worries are twofold

1) I am a partner in a business and as a result of the ecomonic downturn we have had to downscale largely just to ensure the business continues to trade, this has led to my salary being cut in half. As a result I can no longer afford all of my outgoings and have begun to fall into arrears. I have cut out any unecessary spending but just cannot survive on my income and pay the bills.
I am worried that as this is a voluntary salary cut (although I have no choice) could this cause me any problems with the BR process. It won't cause you problems at all, the OR understands that you did what you did to keep the business running. Not a 100% but I have a feeling if you go BR then the partnership will have to be disolved.

2) Biggest worry is the house - I know that there are no guarantees but I want a
general idea of whether we would lose it. £315k joint mortgage with my wife, the house is worth at best £275k we live there with three kids and am terrified of being kicked out on the streets. You won't be kicked out on hte streets. The OR is interested in any equity you have and you have none so he has no interest. You will get a chance to buy his future interest for £1 plus £211 nominal fees. Can you afford the mortgage if you don't have any other debts to cover?

Now I have made the decision to do this I will contact one of the debt charities but any advice at all would be really welcome.

Many thanks

Give Business Debtline a call and have a chat with them, link and number in my sig.

Also read the first post in the Bankruptcy Help sticky, there is lots of goood info there. Ask any questions you need to.

Oh! and welcome to the board.

thegoodlife

I am no expert ,and just wanted to bump this up for you, regarding your biggest worry your house, that was mine too, I always thought that bankruptcy means they come and leave you with nothing! It isnt the case , I have no equity in my house ,three children and we are able to keep paying the mortgage and secured loan on our property. My OR said that they are only interested in it if there is equity or likely to be equity in the next three years, it is classed as a family home . So we are not losing our house, hope this helps !and Hopefully some of the more knowledgable posters will be able to help you more.

Kemosabi1976

Thank you both for your very quick and kind replies I am very grateful.

There is no equity in the house as you can see but even though I have been struggling for the last 12 months I have always maintained the mortgage and council tax payments bang up to date.

Without monthly payments on unsecured debts I will certainly not be well off but at least everything will be covered!!

tigerfeet2006

Kemosabi1976 wrote: »

Sorry - got a thousand questions in my head at the minute, if anyone is kind enough to post a reply perhaps some light could also be shed on this ??? Keep asking, knowledge is power.

The mortgage is joint but all the other debts and bills are in my name as my wife has been full time mum for last three years. She is now back at work with a small income and WFTC, will me going BR affect her financially in any way?? No, it won't. You will just have to show she pays a contribution to the household bills on your SoA. If you have any joint accounts with no O/D then remove your name, if they have an O/D then the bank will come to her to repay it.

Also I have a car which is leased (needed for work and drop kids off at school) is it likely this will have to go? and finally my wife owns her own car would this be classed as an asset in my BR or as its hers is it kept seperate. If the car is leased it is not an asset so can't be taken. Ther OR will look to see if the outgoings for the lease is fair and not excesive. If he doesn't allow it on your SoA then put travel down and pay for the rest out of any surplus you have. Your wife's car is her asset and nothing to do with you ar the OR.

Thanks again

Hope that helps