Bancruptcy - Serious advice needed!

PaulRobertson

Hi,

I have read a few posts on here and there is some real good advice given so I really hope someone can help with the terrible situation I have found myself in.

Firstly, I have made some major silly mistakes over the last two - three years, I'm finally aware of the problems I have caused and living with it every second of the day. Please canthe replies be limitied to helpful comments and not insults as I really don't need any more ( I have had more than enough from everyone I know).

I'm currently in an IVA - which I started on the 10th August 2009. My monthly repayments are £349.00p per month - I currently owe around £42,000 to various banks for loans , credit cards etc.
However initially I owed about £65000 + I have lost track.
I started to get myslef in debt back in 2005, however the majority of the debt was arranged during 2007/8. I was going thorugh a terrible time in my marrige and was diagnosed as having severe depression. I was working full time - the mental illness was primarily caused by my work and relatiionship problems.

During early 2008 - after I realised I could get no more credit and could not balance the payments each month, I commenced a debt management plan with Payplan, my monthly repayments were around £420 per month.
I soon realised that I could not afford the payments and applied for an IVA. During all of this, I was moved sideways at work because I could not cope with the preassures of my job any more, likewise my marrige hit rock bottom and my wife applied to divorce me.

My divorce came through in November 2008 - I received a lump sum of £56 000. Out of that payment I paid off nearly £30000 of debts, paid the solicitors fees, paid back lots of money I owed to friends and cleard my outstanding utility bills Which amounted to a couple of grand.
I also bought a caravan to live in for £2500 as I could not afford to get a house or even pay the silly amounts of rent that you have to pay where I live. I had to sign a form at the solictors also stating I would not go bankcrupt? as part of the divorce requirements. ( I think this only stands for 6 months after the divorce?)

During all of this, I had applied for an IVA, which was initially turned down by the creditors, I then applied again and started the whole process over.

During this time, I have still had to balance the bills each month finding myself more and more in debt. My health has continued to suffer and my workplace became intorrible for me to continue working at.

In Agust 2008, I was offered redundancy from work which and I felt that this was the only option for me so I accepted it. 4 days after accepting redundancy, my IVA was agreed. Now I was not concerned as work were continuing to pay me for 2 months (up unitl the 15th September) so I could afford to pay the IVA whilst I found another job. Likewise my redundancy payment was enough to reclear my bills and keep me going for about 12 weeks - which I thought was more than enough time to get another job. I WAS WRONG even though I have good qualifications and have applied for over 312 jobs in the last 8 weeks.

I now have just about enough cash to pay the bills this month (including the IVA payment) and then thats it - I have nothing left and still no job.
I have no assessts at all apart from household furniture and a car worth about £1200.00p.

I now see no other option than applying for bankcruptcy, but I don't know if I can? What the effect will be on my new partner who I now live with, and I have just had to confess all the debts I have to her as she had no idea?

Please can anyone offer me some advice?

Yours

PR

dojoman

PR, welcome to the site, ask all the questions you like, and usually someone will be able to help you. I have asked quite a few already and up to now have not received anything other than help. Hopefully someone more knowledgable than me will be along to help you shortly.

PaulRobertson

Hi,

Thanks for those words. I do hope so. Its a horrible place to be in and I just do not know how I can continue. Bankcruptcy seems the only option but I'm terrified that apart from running up all of this debt that I will end up in prison because of it. I have not done anything illegal and have kept trying to pay my way by juggling, but I just can carry on.
I need to do something now, this week otherwise I just don't know what is going to be left for me to carry on with.

dollparts

PR, you won't go to prison because It is not a criminal offence to file for BR.

I can certainly see why you are worried. You must consider your state of health first and foremost because without that, precious little else matters.

I would suggest you contact one of the debt charities that can offer you some professional advice. (see sticky at top of board for names and numbers)

I have never heard of a clause in a divorce whereby you commit to avoiding bankruptcy. That's not to say such conditions do not exist but a debt counsellor will be better qualified to answer your question to give you peace of mind. One thing that does spring to mind though is whether you have obtained a consent (clean break) order since your divorce was declared? This may be a factor in any conditions that formed your settlement arrangments.

In any case you will need to have sought such advice prior to filing for BR since you will be refused otherwise.

Please keep posting, there are many here that will help in any way they can.

Hope this helps a little at least.

nervousmother

bankruptcy is not a criminal offence and you will not go to prison because of it. From what you have said you acted fairly.. and tried to clear your debts yourself.
If you go bankrupt the official receiver will want to know exactley where the money went from the divorce nearly down to the penny. We had a similar thing as we sold our rental house, it was for market value and we could proove where every penny went (mainly to pay bills inc inland revenue, but i also purchased a small car in order for me to get a job)
You must take proffessional advice from the likes of CAB or CCCS.

PaulRobertson

Thanks - I know with my divorce - there was a declaration that neither patry would have any claim over any future earnings, property etc.
I can account for every thing I have spent - although you would think I would have a lot of assessts after being this much in debt - but pretty much all I bought was sold at silly prices trying to pay the next bill.
I bought a car - new which I have downsized 7 times on trying to free up cash to live, run up around 9 thousand in credit cards once again trying to live, cover bills etc and then again taken out loans to pay the credit cards off with - its all been my own fault but all I can say was that my mental health issues were very prevelent at the time - no bank or loan company should have given me a loan - I know its not in their interest or job to take this into account and I did not inform them that I was out naked in the back garden, barking at the moon night after night, but I really think that people should have to get some from of consent signed by their GP before a loan is authorised.

Jessica23_2

Hi Paul, I would recommend you talk to the cccs, thats who I used. I like you had gotten myself in a right old state both financially and mentally, and BR was the best thing I ever did to stop it all. Dont get me wrong its not an easy option, there are down sides like the bank accounts, car insurance blah blah blah, but it will stop you having to worry and allow you to make a fresh start. cccs are really nice, they dont judge you, and to be honest there are so many people in the same boat as you at the moment its nothing new to them. Give them a call sooner rather than later then you know exactly what your options are and where you stand, at least then you know if BR is an option or not. When you know I would suggest you try and make a decision asap, the reason being there are actually waiting lists for court dates to go BR! so like I said you are not the only one going through it! Ive found the help, support and advice on here great, I only wish id found it sooner. Good luck, and I promise you will feel so much better when you know where you stand and have made your decision. Regarding your partner, it wont affect her unless you get a joint account. I was with my partner throughout my BR and he has been a god send, as it didnt affect his credit he set up a basic account with a debit card which I use as my account so im not affected by the bank account issue that some are affected by. Anyway my point is that it hasnt affected him at all. best of luck.

PaulRobertson

Thanks - I have just emails CCCS - hopefully they will come back to me in the week.

philnicandamy

Paul....you'd be better ringing them and speaking to someone in person then that way they can ask any further questions needed (and the email sometimes can be a very long delay before a reply)

or contact national debtline...

PaulRobertson

Thanks to you all.
just have to see if I can raise the money to pay all of the fees. Not sure if its the norm but it costs over £500 in my local area. Is that right?

Also - can anyone give me a brief idea of what will happen to me after I file the papers? How does the bankcruptcy work?

nervousmother

hi paul,
yes those fees are the norm, ironic really.

after you file the papers you get a court date, on the day of court you may not have to see a judge ours was dealt with by two nice women who seemed to be from the WI lol.. not everyone sees a judge. Straight after the BR getting granted we spoke briefly to the OR over the telephone, he wanted to know if anything urgent needed dealing with like charging orders, also wanted to know what cash we had either at home or in the bank, i had £500 cash but explained i needed it to last the month until next pay day.. he was fine with this.

We then received a 'welcome pack' basically forms to fill in and requesting we sent them bank & credit card statements as well as all debit/credit cards (cut up of course)
Then next, we had a interview, mine was done over the phone the OH was done face to face (his was like this due to him being self employed) my phone interview lasted 40mins, they went through my SOA and enquired where the debts had arisen and when i realised we were in trouble, They are firm but fair and the interviews went well. we also discussed all assets, due to our assets a trustee was appointed. (over 10k worth of assets to deal with and oh business) but for many it finishes at the OR interview. They go through your income and outgoings and decide wether you are to get a IPA or not (if you can afford one.. your surplus must be more than £99 after all essential expenditure) They discuss your assets such as family home and car, dont bother to mention furniture and household goods as they really not interested unless antiques.

Our BR was last janurary, we were both granted early discharge exactley 6 months later, although ED is not a guarantee its nice when it happens.

If your in work, you will probably be given a NT tax code, under this system you pay no tax on your wages, the tax you would have paid you pay over to a company called moonbeever instead. This lasts until the end of the financil tax year or new employment.