Is Bankruptcy the way to go?

AnnaV

Could your wife not get an evening/weekend job waitressing or bar work?

silvercar

molly1412 wrote: »

hi your circumstances sound very similar to ours, except i have not finished work yet as not due baby until end of the year but i will be stopping work as we cant have childcare for 2 children so we will lose my wage and we are the exact same with our house, - in negative equity, on interest only mortgage struggle to pay now so will have no chance when i have to stop work so we are seriously considering bankruptcy as i see no other way. i think the same as you in that we wont be able to live off one wage let alone pay bills to and we are not going to be able to get money back on the house for a long time. we also have some loans too due to wedding and deposit for house etc

i was wondering how you are getting on and what you decided to do?

If the baby is not due until the end of the year, you are not yet pregnant! Maybe now isn't the time for a new baby.

If you do go bankrupt you are expected to live off the income you then have, you cannot petition for bankruptcy without having a balanced soa ie you will need to show that without your unsecured debts you can balance the books.

molly1412

the baby is due sep 30th so i am very much pregnant! albeit early days hence why i am trying to plan ahead.

i fully appreciate that we have to live off the income if we dont have our debt then we have enough money to live off to give you a brief summary at the moment

our wage combined = 3500
outgoings (mortgage & loans etc) 3400
own £192,000 on mortgage house worth £165,000
without my wage (which is the biggest issue) 2300 and outgoings would still be 3400 so we would be in a lot of trouble

iv not got to the point of SOA yet but i am fully aware that without my wage we do nothave enough money to pay bills never mind any living costs.
thanks

silvercar

How does your mortgage compare with local rents? If it is about the same you may be better off keeping your home.

If you earn more than your partner, surely you should go back to work not him?

molly1412

no sorry i mean my husband wage is £2300 mine is £1250. you can rent for cheaper than our mortgage - mortgage is currently Interest only at 770 and you can rent for 650-700 when rates go up which is soon then our mortgage will be higher again so it makes more sense to rent but need to save the money for bond, and few months rent if we can and the bankruptcy fees

watcher27

Just an update on this as the interest only ends in December!

I have had some phone calls with the CCCS and they have recommended us a DMP.

Our total gross income is a year is £31500, but we have £32000 worth of unsecured debt! (loan & 3 x credit cards)
The problem is though, is that our mortgage interest only term ends in December, and as i said on the first post, mortgage payments will go up to £1037!

At the moment after the cccs did our budget, we will have around £225 a month after mortgage & bills to pay into the DMP, BUT when the mortgage goes up, we will have -£37 a month!!! without paying any creditors!!!

What happens then? And is it even worth setting up the DMP for just 2 months?
The CCCS say then can only work with things as they are now and not in 2 months time (fair enough).

fatbelly

Probably not worth setting up a dmp for 2 months...

Bankruptcy is there for you as a fall-back position. It seems that if you prioritise your debts then you are soon going to be throwing everything at the mortgage, and nothing (well maybe £1 per month token offer) at the non-priority unsecured debts.

I'm not sure I'd rush into bankruptcy, particularly as there are 2 of you and so £1400 of fees. Also, I'm guessing there's a car or two that might get dragged in here.

I think keep posting. I'm a bit rusty on bankruptcy thinking since the people I help seem to all qualify for DROs (you don't). Other posters (not the trolls or the thread hijackers obviously) will hopefully chip in with positive suggestions.

watcher27

fatbelly wrote: »

Probably not worth setting up a dmp for 2 months...

Bankruptcy is there for you as a fall-back position. It seems that if you prioritise your debts then you are soon going to be throwing everything at the mortgage, and nothing (well maybe £1 per month token offer) at the non-priority unsecured debts.

I'm not sure I'd rush into bankruptcy, particularly as there are 2 of you and so £1400 of fees. Also, I'm guessing there's a car or two that might get dragged in here.

I think keep posting. I'm a bit rusty on bankruptcy thinking since the people I help seem to all qualify for DROs (you don't). Other posters (not the trolls or the thread hijackers obviously) will hopefully chip in with positive suggestions.

Thanks for your response

Yeah we have 2 cars, but they ARE both needed! I work 35 miles away from home and the cost of getting there on public transport far out ways the cost of running my 11 year old smart Cdi and then we have the family focus (2002 ,worth around £2K if that) which is needed for family stuff and my wife for work, playgroup etc.

watcher27

Update:
December is nearly here, and so the next mortgage payment will be for the full repayment at £1060 per month.
I phoned the CCCS back today with the new mortgage amount. According to the budget, this leaves us -£150 a month

The lady at the CCCS sounded a bit vague and unsure (unlike the first chap i spoke to), but suggested we write to the creditors offering them a token £1 a month payment. She said if it ended in going to court etc then the judge would see we werent over spending on anything in our budget etc and so nothing would happen. Our house, as i mentioned, is in negative equity so nothing would happen there.

However, my concern is for the future. I'm realisticly on the most im ever going to earn, same for my wife. The mortgage payment will only ever go one way, which is up! So how long will this £1 token payment thing last??

cavalady

Hi watcher27,

See my post on this board (Deep breath). We're about to offer £1 to all non-secured creditors on the advice of CAB; been paying them a few pounds more than that until now but they can't have what we haven't got. We've been fighting for many years, wanting to pay it all back ourselves, our fault we had the debt after all, but it's impossible.
Like you, our house is in negative equity, on interest only temporarily and begrudgingly (by them - Northern Rock). It's a matter of time for us. CAB were very helpful, please do get in contact with them. It's taken us about a year and a half to 2 years to get to this point - really discussing bankruptcy properly. We've been pushed into the decision making process, but in all honestly, it's a good thing. Our situation can't go on forever. At some point, you have to make an informed choice or someone will do it for you.
Very best of luck.