just a bit of help needed

louiser123

hi ti everyone!!

i just need a bit of clarification on bankruptcy process.

long story short, i have previously been bankrupt 10 years ago, creditors perition from failed IVA. so im not 100% sure on the process of debtors petition hence here i am!!

firstly, its not for me but for my daughter, she lives alone with her son and has just admitted that she is in big debt. we have done a draft SOA, and basically she is 500 short a month to pay debt. in a nutshell she has 200 pound left after all expenses, but debt payment are in excess of 700. so she is definatly insolvent. i advised that bankruptcy would be the best route but have also given her the cccs, and nat debtline nukbers to call as i am aware she needs advice prior to BR, i also think she could benefit from hearing it from someone else.

she rents her house from private landlord and has rent arrears, although she has one hell of a good landlord who is very understanding. i have told her she must speak to him before she does anything and makes sure she is ok to go BR route. these are the things im unsure of so need help/advice/clarification so a big thank you in advance!

1, can she go ahead with bankruptcy but NOT include rent arrears. as she has an arrangement to pay this back and is just awaiting housing benefit which as she works didnt realise she was entitled to until now.

2, once she has spoken to one of the charitys and got advice, is it just a case of getting the fees together ringing the court and setting the date ect.

3, two of her creditors are finance for household items (fridge freezer/sofa) are these classed as secured debt and will they be collected by the creditors. ( she has paid about half of each debt off, so technically they only own half!! lol)

i think thats all for now so big thanks to anyone who can help:o

fiveyearplan

louiser123 wrote: »

hi ti everyone!!

i just need a bit of clarification on bankruptcy process.

long story short, i have previously been bankrupt 10 years ago, creditors perition from failed IVA. so im not 100% sure on the process of debtors petition hence here i am!!

firstly, its not for me but for my daughter, she lives alone with her son and has just admitted that she is in big debt. we have done a draft SOA, and basically she is 500 short a month to pay debt. in a nutshell she has 200 pound left after all expenses, but debt payment are in excess of 700. so she is definatly insolvent. i advised that bankruptcy would be the best route but have also given her the cccs, and nat debtline nukbers to call as i am aware she needs advice prior to BR, i also think she could benefit from hearing it from someone else.

she rents her house from private landlord and has rent arrears, although she has one hell of a good landlord who is very understanding. i have told her she must speak to him before she does anything and makes sure she is ok to go BR route. these are the things im unsure of so need help/advice/clarification so a big thank you in advance!

1, can she go ahead with bankruptcy but NOT include rent arrears. as she has an arrangement to pay this back and is just awaiting housing benefit which as she works didnt realise she was entitled to until now. Not really sure on this one

2, once she has spoken to one of the charitys and got advice, is it just a case of getting the fees together ringing the court and setting the date ect. Yes thats all she needs to do.

3, two of her creditors are finance for household items (fridge freezer/sofa) are these classed as secured debt and will they be collected by the creditors. ( she has paid about half of each debt off, so technically they only own half!! lol) depends on the agreements but doubtful they would repossess.

i think thats all for now so big thanks to anyone who can help:o

A few comments above.

louiser123

thanks fiveyearplan. i thought the same as you with the sofa ect but as i have not had any finance like this i was really clueless.

louiser123

forgot another question!! where do i find the templete for the SOA people use on here as i could pass this to her as its more detailed than trying to think what goes on it, if you see what i mean

Louisa76_2

louiser123 wrote: »

1, can she go ahead with bankruptcy but NOT include rent arrears. as she has an arrangement to pay this back and is just awaiting housing benefit which as she works didnt realise she was entitled to until now.

2, once she has spoken to one of the charitys and got advice, is it just a case of getting the fees together ringing the court and setting the date ect.

3, two of her creditors are finance for household items (fridge freezer/sofa) are these classed as secured debt and will they be collected by the creditors. ( she has paid about half of each debt off, so technically they only own half!! lol)

i think thats all for now so big thanks to anyone who can help:o

1. She should include the rent arrears, as no creditor should take priority in BR! However as this is private rental and as you say she has a very understanding landlord, she could try to include the monthly amount in some other area of her expenses, say food or fuel. You are allowed to allocate money each month for holidays, gifts, dental care, hair cuts, so she should be able to squeeze it in there somewhere.

2. Yes

3. I didn't think they can repossess items that are required for every day living, such as sofas or refrigerators! I had my motorbike repossessed but only because I had a car as well, so could not have 2 vehicles.


It is hard to admit that there is a serious debt issue and BR should only be considered when all other avenues have been looked into. Has she looked into a DMP or IVA?

philnicandamy

louiser123 wrote: »

forgot another question!! where do i find the templete for the SOA people use on here as i could pass this to her as its more detailed than trying to think what goes on it, if you see what i mean

http://makesenseofcards.com/soacalc.html

Louisa76_2

louiser123 wrote: »

forgot another question!! where do i find the templete for the SOA people use on here as i could pass this to her as its more detailed than trying to think what goes on it, if you see what i mean

The form required is number 6.28 and can be found on the insolvency.gov.uk/forms website

debtinfo

2. I presume she knows that she must fill in a Statement of affairs (25 pages) and a petition (2 pages), and takes these with her to the court

3.It depends on the the agreement, ie whether it is a fixedsum loan agreement or a HP, or a rent or lease system

nervousmother

Basically you put the rent arrears down on your SOA, but you will still be able to pay the rent arrears, this means that you would pay less via a IPA. you put it down on your soa the amount of monthly extra rent arrears they are paying. They do not need to increase other amounts to try get the money.




30.77 Rent arrears generally
On the making of a bankruptcy order rent arrears are a bankruptcy debt insofar as the money owed is a debt to which the bankrupt is subject at the commencement of the bankruptcy URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch25-36/Chapter30/Part%204/Part4%20notes.htm#25#$36948#25"]note 25[/URL, see paragraph 40.118. The landlord is a creditor in the proceedings with a provable debt for the amount owing up until the date of the bankruptcy order. Furthermore, the landlord has no remedy against the property or person in respect of that debt except with leave of the court URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch25-36/Chapter30/Part%204/Part4%20notes.htm#26#$36948#26"]note 26[/URL.
As the tenancy agreements listed in paragraph 30.70 do not form part of the estate, the bankruptcy does not affect the running of the tenancy, and the bankrupt has an ongoing obligation to pay future rents under the agreement. The arrears of rent that exist at the date of the bankruptcy order are a provable debt and so are not payable by the bankrupt (however, see paragraph 30.78 below for why a bankrupt may wish to pay rent arrears).

30.78 Rent arrears – landlord’s right to possession
Even though the rent arrears are a provable debt in bankruptcy there are instances when a bankrupt may wish to pay these arrears to avoid eviction from the property by the landlord. It is not possible for a landlord to gain possession of a property against the tenants will without an order of the court. The courts have decided that a landlord still has the right to apply for an order of possession against a tenant with rent arrears, and such an order can be sought before or after the making of a bankruptcy order URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch25-36/Chapter30/Part%204/Part4%20notes.htm#27#$36948#27"]note 27[/URL. The judge found that seeking a possession order was not seeking to enforce a remedy against the property of the bankrupt, but operated so as to determine the tenant’s interest in the property. The landlord’s ability to seek a possession order is not affected by, or connected to, the bankrupt’s discharge.

30.79 Rent arrears – suspended possession orders
Should a bankrupt wish to avoid enforcement of a possession order, he/she must fulfil the conditions of the suspended order and pay the instalments ordered by the court. If a bankrupt wishes to make such payments to avoid losing his/her home, the official receiver should not object. When assessing the bankrupt’s income for IPA/IPO purposes, the official receiver or trustee should allow a sum ordered by court towards the repayment of arrears as a reasonable expense. See paragraph 40.118A & 40.118B.

30.80 Rent arrears – voluntary payments prior to possession order
Where a bankrupt has reached a voluntary agreement with the landlord to pay rent arrears following the landlord threatening to take possession proceedings, then the official receiver, as trustee, should not intervene in those payments. If the official receiver considers the payments to be excessive, and if they are likely to compromise the bankrupt’s ability to make a payment under an IPA/IPO, the official receiver should ask the bankrupt to vary the agreement with the landlord.

louiser123

thanks so much nervousmother and pkilnickandamy !:D

louiser123

sorry the above poat should have read thanks to everyone!!

she hasnt looked at DMP/IVA, as to be honest i only found out today as i think she was so worried but at least its the first step. thats why i said she needed help form one of the debt charitys as they have far more knowledge than i do. i looked on here at DRO, but that didnt seem appropriate, im not sure DMP would be either as looking at the SOA sheet there are things we forgot to add as expenses which make it about 100 left after everything which i dont feel will cover repayments to even begin to make a dint in them! but i could be wrong. i didnt look at iva as my experience with one was very bad hence bankruptcy finally but i hope she can get advice from one of the charitys.

thank you to all who have helped i really do appreciate it.