Bank Bankruptcy

lil_me

Advice needed for a friend

Short version of a long story. She has 2 kids, both with disabilities. Ex partner couldn't get credit, she ran up several debts now totalling over £20000 (well that's the ones she has shown me maybe more) then he left leaving her with everything to pay.

A company have sent her a letter threatening her with bankruptcy for the debt thats just under £8000. Via some Bishp Security, working for Moorcroft who work for HSBC IIRC.

She is a single Mum, on income support, rents a council property, has her own furniture and a car thats worth a few hundred pounds to get them about.

What can they take off her ? Someone told her they will empty her house and even take the childrens clothes and toys etc.

TBH she's had these debts over 5 years and just kept ignoring it.

Any ideas how the process works etc appreciated.

skylight

Someone has been telling her complete cr*p.

She can accept the banks offer of being made bankrupt, although I think this is just a threat. It costs them money to make her bankrupt, added to the debt that they will never have repaid. She could make herself bankrupt for about £350.

Once she is bankrupt, which she should get professional advice over (like CAB or CCCS or Payplan) BEFOREHAND, the debitors can do nothing else. The official reciever (OR) takes over.

The OR goes through her accounts, see what she has spent the money, check to see what realisable assests there are and sell off those items of value. If she has nothing of value they will take nothing. The OR's are currently clamping down on cars so she *may* lose this, but can argue its neccessary for her disabled kids, so its 50/50.

The OR's are there to make sure that you have not hidden away your assets to de-fraud people. They DO NOT take clothes or Toys - unless your friend has hidden money in bank accounts under the kids names.

She needs to deal with these debts. They will not just disappear on their own. And I think that perhaps it was a creditor who told her that they would take everything? Just scare tactics because they know there is nothing that they can do.

She has tens of thousands of pounds of debt. No-one cares it was for her ex - its in her name and she is solely responsible. She cannot pay it back (by the sounds of things) so she need professional advice - straight from the horses mouth (so to speak). Click some links at the top of this thread for people who can help.

Bankruptcy is not the easy option though - she will not be able to get credit again and a mortgage is out of the question. Car insurance and house insurance premiums are a little higher (not a lot though) and there will be some jobs she will not be allowed to do - MP or accoutnant for example.

Get her onto professional advice right now!

skylight

http://www.debtquestions.co.uk/debt_forum/

Try here for further advice. There is masses of good info here, from people in all stages of debt, and a specific bankruptcy board.

lil_me

Thankyou Charlotte.

Someone also told her ignore any contact for another 9 months (IIRC) and the debt would be wiped as it's 7 years since you payed anything and can say didn't hear from them, I told her I believe that is incorrect aswell.

From what some sites stay Bankrupt would mean she can't get credit for a few years, but at the minute she has so many defaults etc she can't get credit anyway. Only in her early 30s so feel for her but she was a mug to be bullied into debt and like you said, she signed the forums, but she pressumed he'd pay it (was in a well paid job)

wuckfit

in Bankruptcy I think you're entitled to keep a car up to the value of £1000. if the car is worth significantly more than this the OR can take the car and give you £1000 back to buy a run-around if it is necessary, which with two disabled children there's a greater chance of this.

as long as 6 years (or 5 in scotland) have elapsed since the last payment or acknowledgement of the debt then it is deemed 'statue-barred' and whilst still legally owed, cannot be enforced. (unless there's a CCJ) a DCA is entitled to ask for the money, but can be told that the debt is statue-barred.
if the debts are more than six years old, and have dropped off the bottom of the credit score, it would penalise someone's credit file to pay it off and have the default reappear even with the word 'satisfied'.

lil_me

Oh, wonder how this statue barred works, thanks for that wuckfit I'll have a search about on the forums as from what she said this morning most of these debts are at least 6 years without payment some closer to 7 years and none have CCJs just defaulted I believe.

Prudent

She amy be recieving mobilty allowance for her children and the car may have been purchased from this. She might be better putting the allowance into a mobilty car and then it can't be atken away becuase it is not her own.