Bankruptcy only way forward.

January_Embers

Hi Mr January Embers here!

I'm self-employed and my wife has Rheumatoid Arthritis. She worked full-time while she could then part time and now can't work. Loss of her income has led us into the smelly stuff.

She gets DLA but half of that has to go on a motability car so that she can get our 4 year old to school etc.

We have agreed lower payments with all creditors except LLOyds TSB who are hounding us with a CCJ. They seem to think we have money hidden somewhere!

We also get regular calls from the other creditors due to "Computer errors". Our current rate of payment means it will take us 11 years to pay off our creditors! All this increases stress in the home and doesn't help my wife's health.


We are seriously considering Bankruptcy but have some questions for anyone out there that might be able to help.

1. If I go bankrupt how will that affect my wife? When filling out possessions forms can I ignore her stuff? If so will she need documents to prove it's hers.

2. I need a computer and car for my work what is the likelihood that some evil so-and-so will make me sell them?

3. After bankruptcy I won't be able to run my own business. Could my wife run one and employ me? (Doing the same job I am now?)

4. IPO now has me worried. What's the point of voluntary bankruptcy if I still have to pay off the debts?

5. We have a mortgage on a house with little/no equity in joint names. What's the likeliest outcome with that?

6. If I go bankrupt what happens about the CCJ against me?


I understand definitive answers are impossible but any advice will be gratefully received.

Mirtos

Hi January, You're in the right place here! I don't know enough about this to give sound advice, so I just thought I'd say a friendly hello until someone more knowledgable turns up! Wont be long now!

Mr._OCaz

1. If I go bankrupt how will that affect my wife? When filling out possessions forms can I ignore her stuff? If so will she need documents to prove it's hers.

If you have joint debts it may effect her credit rating as you are financially linked. Sort of assets they will be looking at will be things worth more than £1,000. If you or your wife have these, your wifes assets are exactly that.

2. I need a computer and car for my work what is the likelihood that some evil so-and-so will make me sell them?

Well it is what is deemed essential if it is handy but there is an alternative etc, if your car is worth more than £1,000 (varies on region but just to give you an idea) and it is essential then you may still lose and be given money to buy a cheaper car.

3. After bankruptcy I won't be able to run my own business. Could my wife run one and employ me? (Doing the same job I am now?)

If you are a sole trader you should have no problem and even if you had a business you can still trade but has to be the name you went bankrupt in, You just can't run a plc or be a director or be involved in the setting up of a business. If you need credit to trade and needed more than £500 this would cause you a problem

4. IPO now has me worried. What's the point of voluntary bankruptcy if I still have to pay off the debts?

This is if you have a surplus and can afford it to pay something back to your debts. They take a percentage and normally lasting 3 years. If you can afford it what is the problem? You are liable for the debts and the OR job is to try if possible to look if you can pay something back to your debts. Think about it - bankruptcy is not a walk in the park, an OR has to see if anyway possible they can pay something back to your debts.

5. We have a mortgage on a house with little/no equity in joint names. What's the likeliest outcome with that?

Your wife can buy you out for nominal amount to buy out your beneficial interest plus solicitor costs etc,

6. If I go bankrupt what happens about the CCJ against me?

it will be included[

Broken_hearted

I'm not sure but you might lose your home.

gallygirl

Hi and welcome, you've come to the right place. Firdt step is to read this:

http://forums.moneysavingexpert.com/showthread.html?t=107280,

this will give you some initial info. You need to post an SOA (statement of affairs) which we can give advice on, also the link gives you some uesful contact numbers.

If bankruptcy will mean you can't run your own business this should be your last option - let's explore all other options first.

Sorry about your wife's illness, and that stress makes it worse. If you need someone to share your wories with we are always here. x

January_Embers

Broken_hearted wrote:

I'm not sure but you might lose your home.

We have only had our motrgage 12 months so theres probably no equity. But we realise that there is a chance we might lose our home, of course if this can be avoided it would be better.

Addicted2Chocolate

1. If I go bankrupt how will that affect my wife? When filling out possessions forms can I ignore her stuff? If so will she need documents to prove it's hers.

If you have any joint accounts laons then you wil ahve a financial association so her credit rating will be effected. any joint bank accounts may be closed, and if overdrawn the bank will pursue her for repayment as she is jointly and severally liable

2. I need a computer and car for my work what is the likelihood that some evil so-and-so will make me sell them?
If you can proove they are essential for your emplyment (eg why cant use public transport) then you can claim as exempt, max value for exempt vehicle varies but in south is £2000-£2500. if the car is worth much more than that it wil be taken sold, and you wil be given funds to get a replacement.

3. After bankruptcy I won't be able to run my own business. Could my wife run one and employ me? (Doing the same job I am now?)
yes you can still be self employed after bankruptcy. You have to trade under your own name or disclose your true name to veryone you do business with. you will still be repsonsible for submitting tax returns to the IR for period up to bankruptcy, so they can calculate any debt in the bankruptcy. If you have been self employed you may be required to deliver up all your trading books and records for last 2 years to the OR. If your books are inadequate this may be investigated further. You cannot be a director of ltd company without courts permission, and the courts rarely grant permission. You cannot act in management in the background ( eg wife appointed as director bankrupt manages the co) if creditors complain about this you may be prosecuted.

4. IPO now has me worried. What's the point of voluntary bankruptcy if I still have to pay off the debts?

Because part of the OR's job is to maximise the money that gets paid back to creditors. So think carefully about household income and expenses and figures put down for these in the stetement of affairs. Or does not include things like social, miscelleaneous, cigarettes and alcohol, sky tv etc. Just essential outgoings are allowable. If there is a surplus disposable income you will have to pay part of it (50% to 70%) for 3 years. If you are self emplyed you may have to provide accounts to OR six months after the bankruptcy.

5. We have a mortgage on a house with little/no equity in joint names. What's the likeliest outcome with that?

if negative equity a 3rd party can pay nominal sum of £1, if equity half of equity and OR's legal costs to transfer property into their name. They may be required to pay for independent surveyors valuation (we all know you can ask estate agent to undervalue for quick sale!!) BUT to do this the purchaser must come to an agreement with the secured creditors, ie often have to take on the outstanding mortgage. Lenders may be reluctant to put mortgage in name of someone who is unemployed/has insufficient income to pay mortgage.

6. If I go bankrupt what happens about the CCJ against me?
It stays on your credit file for normal perios 6 years, but it is a bankruptcy debt and you dont have to repay it, just include on list of creditors.

earwig

if they are joint debts your name would be wipped but they may chase your wife for the whole of the debt as her name is on it thats what happend to me when my oh went bankrupt one of the loans was in a jiont name and now i am soley responable for it so i could ethier go bankrupt myself or pay it i am paying it on a dmp as it isnt a huge loan
as for whats the point of going bankrupt if you still have to pay if you have a surpluss amount each month then why shouldnt you pay for some of your debts it will only be for up to three years and thats is better than what you are doing now
the car will go if its worth more than three grand that what our or told us but they will give you money to buy a cheeper one if you need it for work hope this helps

January_Embers

Before anyone else has a go!

We are trying to pay our way now but it's doing us no good. Emotionally, physically or mentally.

We didn't realise about IPOs before today and we didn't realise that they only lasted three years. I didn't see the point of going bankrupt if we still had to keep up the payments but now realise that it would be much better than the eleven years it will take us at the present rate.

Broken_hearted

I wasn't trying to upset you, when the free help line told us we should go bankrupt as we couldn't pay our debts. They said we would most likely lose the house as well. At that point I gave up on them and fought like hell to sort things out myself.

earwig

hi i wasnt having a go all i am saying is that if you have a surpluss income left each month then why shouldnt you pay towards some of your debt its no different from them taking your car to pay towards your debt so i dont understand why that would upset any one
trust me bankrupctcy is not easy but its not as scarry as people make out etheir and there is no shame in it if thats what you have to do our judge even said to my oh somtimes you have just got to throw in the towle and start again and if you are getting hassled by creditor and its makeing your wife ill then you should consider it the relef that my oh got when he had his bankrupcty order was huge as the creditor could not do anything to scare him anymore
but i should also point out that he feels guilty about it all even now 8 months on and still worries about money and the fact that we have to live life with out credit and thats hard when things go wrong and there no spare money to put it right but i can say that each month what gose past is better than the last one i hope it all works out for you