Is Bankruptcy the best option

noemis74

My wife and i have accumilated approx £26,000 in personal debts and my wife has been threatened with court action by HSBC as she cannot afford a 'Pro rata' repayment for them.

We also started our own bussiness which has been running at a loss for the last twelve months, and are three payments behind with our business loan.
We are in arrears with our rent buy approx £800 and have been served notice on our house and are seeking coucil accomodation ( we have eight weeks to find somewhere).

We survive at present on housing benefit and working families tax credit ( we have two children) but as we subsidise the business with this money we have just enough to cover bills let alone any other expenses.

Would bankruptcy free us of all our personal and business debts?,
Would we have to claim bankruptcy for ourselves and then the business or is it all done at the same time?
I have a van on H.P which we are not in arrears with its worth about £6,000 - £7,000 if i find work where the van is required can i keep the van as its our only transport?.
Finally how do i get the wheels in motion if we decide bankruptcy is the best route for us.

Thankyou

Noemis74

fatbelly

Hi and welcome to Debt-free wannabee

The answer to your title question - it's too soon to tell.

I think the first issue you need to grapple with is your housing. If you can afford the top-up to your housing benefit plus something towards the arrears, then will the landlord let you stay?

If you are paying money to non-priority creditors (credit cards, unsecured loans, overdrafts, catalogues, doorstep lenders) then stop, direct your money to your priority debts (rent, council tax) and get advice from a fee-free debt help organisation.

HSBC are just issuing a routine threat at this stage.

Then you need to ask some hard questions about your business. Frankly it sounds like part of the problem, not part of the solution. How about regular employment?

No harm in doing some background reading on bankruptcy. Info here

CLAPTON

you need to post full details ...income, spending , and debts (amount, min payments and APRs )

seek urgent advice from CAB/shelter about housing

why dont you both get paying jobs?

noemis74

We are going to see CAB on thursday morning, And we have filled in all the paperwork for housing and are waitng to be allocated points so that housing associations will consider us.

We put a repayment scheme together to pay our rent arrears but the landlord has issued our notice before the first payment, we got into arrears while going from jobseekers to working family tax credit back in Jan/Feb and the estate agent we go through failed to notify us of the arrears until it reached nearly £750.00 !. We have also been told that the landlord intends to put up the rent again so we defiantly wont be able to afford to live here.

If i go back to full time employment we will be worse off as the wages in this area are low so our outgoings will still be more than our income. My wife is unable to work as she has a bad hip and is unable to stand or walk any distance without pain.

The business is defiantly draining us but we are tied to a franchise and it will cost us at least £4,000 to buy ourselves out and ontop of that we took out a £10,000 Business loan.

Thanks
Noemis74

fatbelly

Noemis - I hope you make some progress tomorrow. The CAB are well placed to help you at present as they can advise on housing, benefits and debt. They will also have local knowledge.

And they should be able to do a 'better off' calculation for you, i.e. how much would you take home on benefits only, how much on a small employed income, how much with present business. Most people are better off working rather than on benefits, contrary to popular myth.

I'm still thinking that you sound like you might be better off without the franchise. I remember the old 'Troubleshooter' guy on television saying 'When in a hole, stop digging'. So you add a 4k and a 10k debt. So what? You already have 26k debt and are contemplating bankruptcy.

Let us know how you get on tomorrow.

Best wishes

fb