is bankruptcy the best option should this happen?

rabb

Hi, to understand this post I've copied and pasted my previous question from the IVA section that I posted last week. Ive put this at the bottom of this post but it is probably best reading this previous post first for any of it to make sense. Anyhow, I'll ask my bankruptcy questions first. I've got around 6 weeks, or so I very much hope, work at one school at approx 2 and a half days a weeks (5 half days). This should give me roughly 200 a week after tax. I'm currently around 200 overdrawn and so can easily put my main bank account back into credit. After this six weeks I will be effectively unemployed with the schools shut down for summer and previous experience telling me zero supply work usually manifests until the end of sept/start of oct. So a bare minimum of 10 weeks without access to employment through this means. As stated in my previous post last week I am now largely confined to a life outside teaching and so will be seeking employment thoughout the summer. However, come the middle of July I will be attempting to claim Job Seekers Allowance, (I say attempting as last year they wouldn't grant it me for reasons unbeknown to me as I supplied wage slips in double figures all showing regular payment of tax including July 09 and apart from training as a teacher 07/08 academic year I've been working fultime since leaving uni in 2004.) So by July 20th I'll be unemployed and with debts of around 24k. QUESTIONS I HAVE: 1) If I can ensure my current bank acc with lloyds is not overdrawn can I keep this account if I decide to go bankrupt? Currently I have a mobile phonce contact (converting to pay as you go when contract expires mid July), 30 gym direct debit and a 38 travel pass direct debit coming out of it. 2) When bankrupt do you have to sell your assets? Well frankly I have none apart from a 6 year old tv and a 12 month old laptop, but would these be taken. I'M STARTING TO THINK BANKRUPTCY MIGHT BE THE BEST WAY FORWARD, ADVICE PLEASE? I know this thread is a bit long so thanks to anybody who has bothered to read it. I will add however, that it won't make a lot of sense unless you read what is below FIRST. As said, I've looked into an IVA but with my future employment so terribly uncertain I'm thinking bankruptcy is my best option. Thank you.

xxxxxxIVA POSTXXXXXXXXXXXXXXX
Hi, I currently owe around 24K, I've been on a DMP since Feb paying 290 a month but it really is crap. I pay argos 13 quid a month and 12 quid interest goes on each month, I pay my overdrafT, 25 quid, but it's over the agreed limit of 1000, I spent 1200 before I got on the DMP, so each month I've probably paid nothing off as they keep hitting me with interest and arrangement fees¬:mad: Plus I've got a big 14k loan, will rise to 18k, over the original 4 years with their interest cut and I pay them 194 instead of 380. Or something like that. Plus I pointlessly chip away with 20 quid on a couple of 1700 credit card bills.

I'm think I could still carve out a half decent existence for myself if I payed around 320 a month back and a IVA would give me some security knowing EXACTLY when it will be sorted and avoid interest/charges undermining what I'm doing. I'm quite sad to be in this mess and it has happened really quickly over 2 years. Prior to thius I had a manageable loan of 220 a month with 30 months to run, now I have all this extra crap on top. I qualified as a primary school teacher and did everything to get a full time job but to no avail. I've been doing supply teaching since but the work is sporadic and with 14 weeks hols a years there's time when I have no income. Over the last 2 years I developed a pretty serious gambling addiction, primarily sports betting, probably through money worries as I never knew what I'd be earning each week and also depression due to not having a permanent job, which I'd had all my life. Anyway, I'm applying for teaching job still but I'm also looking at other job opportunities, a 15K salary would be more than enough to raise my spirits right now.

So what do you feel are my chances of getting an IVA, if I'm willing to pay something like 20K, over 5 years should it be pretty much plain sailing? Thanks. If I could get my debts reduced I'd be delighted but I'd 110% pay the lot of if I could do it over 6 years at not too harsh a monthly outtake.

Advice on any aspect of this post is most welcome, thanks and best wishes to everybody else

Charco's reply: The type of IVA your describing would have every chance of being accepted by your creditors. You're clearly insolvent and your DMP is as useful as throwing a glass of water in the ocean. You also reckon you would be comfortable (when you get full time employment) to contribute a healthy return and a high dividend to your creditors. However, it's the bit in brackets that is going to cause you bother. Until you can guarantee a regular income you won't know how much you can actually afford or even if you'll be able to afford it for the long haul. Circumstances can change obviously, many people enter IVAs with regular incomes affordable I&Es and later find their job is not so secure, or that the new Govt intend to cut some benefits.

I'm not saying you can't look at an IVA but mire importantly you need to look for a regular steady income

confused76

rabb wrote: »

Hi, to understand this post I've copied and pasted my previous question from the IVA section that I posted last week. Ive put this at the bottom of this post but it is probably best reading this previous post first for any of it to make sense. Anyhow, I'll ask my bankruptcy questions first. I've got around 6 weeks, or so I very much hope, work at one school at approx 2 and a half days a weeks (5 half days). This should give me roughly 200 a week after tax. I'm currently around 200 overdrawn and so can easily put my main bank account back into credit. After this six weeks I will be effectively unemployed with the schools shut down for summer and previous experience telling me zero supply work usually manifests until the end of sept/start of oct. So a bare minimum of 10 weeks without access to employment through this means. As stated in my previous post last week I am now largely confined to a life outside teaching and so will be seeking employment thoughout the summer. However, come the middle of July I will be attempting to claim Job Seekers Allowance, (I say attempting as last year they wouldn't grant it me for reasons unbeknown to me as I supplied wage slips in double figures all showing regular payment of tax including July 09 and apart from training as a teacher 07/08 academic year I've been working fultime since leaving uni in 2004.) So by July 20th I'll be unemployed and with debts of around 24k. QUESTIONS I HAVE: 1) If I can ensure my current bank acc with lloyds is not overdrawn can I keep this account if I decide to go bankrupt? no, this won't ensure this account remains open. the only 2 known br friendly accounts are a basic one with barclays or a coop cashminder account. 99% of the time other accounts are closed, so expect to lose this accountCurrently I have a mobile phonce contact (converting to pay as you go when contract expires mid July), 30 gym direct debit and a 38 travel pass direct debit coming out of it. 2) When bankrupt do you have to sell your assets? Well frankly I have none apart from a 6 year old tv and a 12 month old laptop, but would these be taken.the items you have listed will not be sold. the assets they are looking for are items that will make more than £1000 at auction I'M STARTING TO THINK BANKRUPTCY MIGHT BE THE BEST WAY FORWARD, ADVICE PLEASE? I know this thread is a bit long so thanks to anybody who has bothered to read it. I will add however, that it won't make a lot of sense unless you read what is below FIRST. As said, I've looked into an IVA but with my future employment so terribly uncertain I'm thinking bankruptcy is my best option. Thank you.

xxxxxxIVA POSTXXXXXXXXXXXXXXX
Hi, I currently owe around 24K, I've been on a DMP since Feb paying 290 a month but it really is crap. I pay argos 13 quid a month and 12 quid interest goes on each month, I pay my overdrafT, 25 quid, but it's over the agreed limit of 1000, I spent 1200 before I got on the DMP, so each month I've probably paid nothing off as they keep hitting me with interest and arrangement fees¬:mad: Plus I've got a big 14k loan, will rise to 18k, over the original 4 years with their interest cut and I pay them 194 instead of 380. Or something like that. Plus I pointlessly chip away with 20 quid on a couple of 1700 credit card bills.

I'm think I could still carve out a half decent existence for myself if I payed around 320 a month back and a IVA would give me some security knowing EXACTLY when it will be sorted and avoid interest/charges undermining what I'm doing. I'm quite sad to be in this mess and it has happened really quickly over 2 years. Prior to thius I had a manageable loan of 220 a month with 30 months to run, now I have all this extra crap on top. I qualified as a primary school teacher and did everything to get a full time job but to no avail. I've been doing supply teaching since but the work is sporadic and with 14 weeks hols a years there's time when I have no income. Over the last 2 years I developed a pretty serious gambling addiction, primarily sports betting, probably through money worries as I never knew what I'd be earning each week and also depression due to not having a permanent job, which I'd had all my life. Anyway, I'm applying for teaching job still but I'm also looking at other job opportunities, a 15K salary would be more than enough to raise my spirits right now.

So what do you feel are my chances of getting an IVA, if I'm willing to pay something like 20K, over 5 years should it be pretty much plain sailing? Thanks. If I could get my debts reduced I'd be delighted but I'd 110% pay the lot of if I could do it over 6 years at not too harsh a monthly outtake.

Advice on any aspect of this post is most welcome, thanks and best wishes to everybody else

Charco's reply: The type of IVA your describing would have every chance of being accepted by your creditors. You're clearly insolvent and your DMP is as useful as throwing a glass of water in the ocean. You also reckon you would be comfortable (when you get full time employment) to contribute a healthy return and a high dividend to your creditors. However, it's the bit in brackets that is going to cause you bother. Until you can guarantee a regular income you won't know how much you can actually afford or even if you'll be able to afford it for the long haul. Circumstances can change obviously, many people enter IVAs with regular incomes affordable I&Es and later find their job is not so secure, or that the new Govt intend to cut some benefits.

I'm not saying you can't look at an IVA but mire importantly you need to look for a regular steady income

hi there and welcome
i have answered a couple of questions above in red

have you spoken to a debt charity? please give the national debtline, cccs or the cab a call. you need to have taken advice before you can go br, and the debt charity will be able to confirm if this is right for you

http://www.nationaldebtline.co.uk/
http://www.citizensadvice.org.uk/
http://www.cccs.co.uk/

this is a useful starting point:
http://forums.moneysavingexpert.com/showthread.php?t=1056083

please ask away if there is anything else x

rabb

thank you, well one of my debts is to barclay card for around 1800. Will this effect me being able to get a basic barclay card bank account? Ive just googled the coop cashminder and that seems quite ok tho. Am I right in thinking that I'll at least be able to set up some kind of bank account then?

I spoke to the CCCS in December and they put me on the DMP, I wish I hadn't have gone on it now as it is making absolutely no headway. I know some people have spoken of it being inevitably pro-creditor seeing as they are the ones who fund it, in this case is it conceivable to receive impartial advice off them? I'm really not so sure.

Here's my likely state of play come mid July: ZERO income or JSA (£260 every 4 weeks)

Outgoings: Loan 18K, credit card 800, credit card 1700, credit card 1800, argos card 620, overdraft 1200, Rent to parents, phone contract (soon to be cancelled), 30 gym direct debit (can be cancelled), Bus pass direct debit £38.

I was paying 380 out alone to my loan company but that was cut down to 195 thru my DMP but it is clearly barely treading water. I pay £13 to Argos but they charge £12 interest so by my own reckoning I'd have to pay them £6000 in order to clear by 620 bill at that rate. Credit cards are going to be 30 minimum each, slightly less on DMP, and will be decreasing in the pence rather than pounds so that's circa 100 a month to tread water. I've paid out around 1300 on the DMP thus far and by my reckoning I'd have been in a better position if I'd just paid 620 and cleared my argos card and paid 300 to HSBC to get back in my overdraft limits and another 300 to my high interest credit card. I certainly couldn't been in a worse position.

Unless I can find some tangible work this summer and begin an IVA I'm going to seek bankruptcy. What is the average duration for a bankruptcy situation to be concluded?

confused76

i'm not sure about barclays if you have a debt with them. i've got the coop cashminder and it's fine. i've got direct debts/SO's set up and internet banking. i went into the branch to set it up, but you can do it over the phone. don't see why you won't be able to get one

i feel the same way about the cccs. i spoke to the national debtline who were great. can take a while to get through, but they were very helpful and gave me my options. i really would give them a call, you'll feel better knowing where you stand

average duration? well i rang my local court and the wait for an appointment was a month, some are quicker, some are longer. ring your local court and see if it is appointment or drop in. i had a telephone interview 2 weeks after my court date, again this can be a few weeks later, depends how busy they are. you are br for a year, might get early discharge but no guarantee. will stay on your credit file for 6 years

hope this helps

good luck

rabb

confused76 wrote: »

i'm not sure about barclays if you have a debt with them. i've got the coop cashminder and it's fine. i've got direct debts/SO's set up and internet banking. i went into the branch to set it up, but you can do it over the phone. don't see why you won't be able to get one

i feel the same way about the cccs. i spoke to the national debtline who were great. can take a while to get through, but they were very helpful and gave me my options. i really would give them a call, you'll feel better knowing where you stand

average duration? well i rang my local court and the wait for an appointment was a month, some are quicker, some are longer. ring your local court and see if it is appointment or drop in. i had a telephone interview 2 weeks after my court date, again this can be a few weeks later, depends how busy they are. you are br for a year, might get early discharge but no guarantee. will stay on your credit file for 6 years

hope this helps

good luck

Yes it is of great help thank you. Were you subject to an income payments order whre you still have to contribute paymnets for a max of 3 years? I read that on piggybankrupt co uk. Also, it listed some conditions where it said the court can't grant bankruptcy:

The court will not be able to make the bankruptcy order where:

• Your debts are below the small bankruptcies level (currently £40,000), MY DEBTS AREN'T 40K, DOES THIS EXCLUDE ME? THIS SEEMS CONTRADICTORY IN COMPARISON TO "CAN BE BANKRUPT IF OWE MORE THAN £750". I ASK BECAUSE I REALLY CAN'T RISK PAYING COURT FEES MERELY FOR IT TO NOT PROCEED.
• the value your estate would be greater than or equal to a specified minimum amount (currently £4,000),
• in the previous 5 years you have neither been adjudged bankrupt nor made a composition with your creditors in satisfaction of your debts or a scheme of arrangement of your affairs, and
• that it would be appropriate to appoint an insolvency practitioner to prepare a report presenting the feasibility of an individual voluntary arrangement to the court.

mummytotwo_3

rabb wrote: »

Yes it is of great help thank you. Were you subject to an income payments order whre you still have to contribute paymnets for a max of 3 years? I read that on piggybankrupt co uk. Also, it listed some conditions where it said the court can't grant bankruptcy:

The court will not be able to make the bankruptcy order where:

• Your debts are below the small bankruptcies level (currently £40,000), MY DEBTS AREN'T 40K, DOES THIS EXCLUDE ME? THIS SEEMS CONTRADICTORY IN COMPARISON TO "CAN BE BANKRUPT IF OWE MORE THAN £750". I ASK BECAUSE I REALLY CAN'T RISK PAYING COURT FEES MERELY FOR IT TO NOT PROCEED.
• the value your estate would be greater than or equal to a specified minimum amount (currently £4,000),
• in the previous 5 years you have neither been adjudged bankrupt nor made a composition with your creditors in satisfaction of your debts or a scheme of arrangement of your affairs, and
• that it would be appropriate to appoint an insolvency practitioner to prepare a report presenting the feasibility of an individual voluntary arrangement to the court.

Dont worry, my debts were totalling £45k and my husbands 23K and we both still went br in March, we entered into a dmp last October with CCCS and soon became apparent that it was not going to be affordable to us as hubby was unemployed, and we stopped paying this, it was not a problem.

With regards to an Income Payments Arrangement/order it will depend on your monthly surplus income, anything above £99 and they will look for an IPA, we dont have one at the minute.

As long as you are insolvent then you wont be turned away.

confused76

thankfully i didn't get an IPA (well, haven't so far)

i think the minimum you can go br for is £750

as long as you are insolvent (eg can't pay your debts as they are due) then you won't be turned down. oh, and they will ask if you have taken advice, they can turn you down if you haven't

beentheredonethatstilhere

rabb wrote: »

Yes it is of great help thank you. Were you subject to an income payments order whre you still have to contribute paymnets for a max of 3 years? I read that on piggybankrupt co uk. Also, it listed some conditions where it said the court can't grant bankruptcy:

The court will not be able to make the bankruptcy order where:

• Your debts are below the small bankruptcies level (currently £40,000), MY DEBTS AREN'T 40K, DOES THIS EXCLUDE ME? THIS SEEMS CONTRADICTORY IN COMPARISON TO "CAN BE BANKRUPT IF OWE MORE THAN £750". I ASK BECAUSE I REALLY CAN'T RISK PAYING COURT FEES MERELY FOR IT TO NOT PROCEED.
• the value your estate would be greater than or equal to a specified minimum amount (currently £4,000),
• in the previous 5 years you have neither been adjudged bankrupt nor made a composition with your creditors in satisfaction of your debts or a scheme of arrangement of your affairs, and
• that it would be appropriate to appoint an insolvency practitioner to prepare a report presenting the feasibility of an individual voluntary arrangement to the court.

Piggybank is talking a load of c**p and are not a reliable source of info on bankruptcy.

As Confused says give National Debtline a ring tomorrow and have a chat with them. Read the threads on here, also the Bankruptcy Help sticky and the Insolvency Service website. Ask any questions you need to.

evenstar2009

In a good way i'm glad i'm not alone in this situation - my IVA was turned down on Thurs so have no alternative but to go BR now which seems a bit stupid on behalf of the creditors because they'll actually end up getting less than what the IVA was offering. My property is in negative equity which for once is a good thing because it means its not classed as an asset.
Sounds like you've tried to sort things out so they should take that into account. If you do go for the bankruptcy route at least you'll know there is an end to it and you're protected by the law. Its bad enough in the current climate to keep employment without having all the other financial problems hanging over your head.
By the way, Barclays were one of my creditors and they never stopped hounding me by phone or text even just before the creditors meeting so i think i'll be going to the Co-op for my Basic Bank Account lol
If you do go for the BR route, i've been advised to have the £600 fees you have to pay the court (in cash) and also make sure you have cash to live on for up to a month as they will freeze your bank account.

beentheredonethatstilhere

If you have a Co-op Cashminder up and running when you go BR then Co-op will not freeze it, they are extremely BR friendly.

mummytotwo_3

As long as you dont live in brighton, then you can open your co-op account pre br and get everything in place before hand. I opened mine beginning of January and didnt go br until mid march, and the co-op didnt even freeze our account. It has worked out well for us, as our mortgage is with a subsidary of co-op, we are just in the process of buying our bi back as we too are in negative equity.

good luck xx