Second opinion needed

iantoday

Hello,

I am planning to go bankrupt soon, probably initiating proceedings later this week. I have in total approximately £20,000 in debts (including the interest), £14,000 without interest. I am currently long-term unemployed earning £261 per month, although starting a franchise business (I've already paid the investment cost) so as to 'rise from the ashes'. Currently I'm on a debt management plan that will take up to 20 years to pay it all off!

There is a chance I could pay off my debts in three years through various (legal) ways of earning money but defaults would still be on my account another six years (so nine years in total of being unlikely to get credit). I have nothing to lose really, no savings, no shares, no property or anything of value that could be taken.

With this in mind, I think it makes sense to get over the stigma and go bankrupt and accept six years of no credit. I really see no reason at all why I would want credit; the only reason I have needed credit in the past few years has been for the investment that led to me being in debt. Even without bankruptcy, I am very unlikely to get credit anyway.

I have been told by Natwest that I can keep my Sole Trader business account and my personal account, and even my modest personal overdraft. I know sometimes I've found people in call centres who don't what they're talking about, so can anyone confirm what I've been told about the accounts? Is the same true for all banks?

Another thing is that I am planning to use a bankruptcy service to sort this out. They are asking for £250 (which is the lowest I've found), would you recommend using such a service, or do all the paperwork, arrangements and dealing with creditors yourself? I think it is best to let an expert deal with it so it is done right first time without further expense.

Thank you for any help and advice you can give.

Ian

JMV

Hi Ian

I am a sole trader and have just gone BR (I also used to bank with NATWEST so thought it might be useful for me to share my experiences...

iantoday wrote: »

I have been told by Natwest that I can keep my Sole Trader business account and my personal account, and even my modest personal overdraft. I know sometimes I've found people in call centres who don't what they're talking about, so can anyone confirm what I've been told about the accounts? Is the same true for all banks?

I would be stunned if they do....I opened a NW current account and Business account just over a year ago (I owed my previous bank money)...I have an exemplary record with them, no loans, overdrafts, credit cards and always at least £500 in the Buisness account...I emailed after my BR and proposed that they consider allowing me to continue banking - flat out NO...legal department have a policy that the account willbe closed and they do not allow BR to hold a Business Account...

I think you will get the same response from all banks when you go BR - you only option for banking appears to be a basic account (not easy to run a business from but not impossible....

iantoday wrote: »

Another thing is that I am planning to use a bankruptcy service to sort this out. They are asking for £250 (which is the lowest I've found), would you recommend using such a service, or do all the paperwork, arrangements and dealing with creditors yourself? I think it is best to let an expert deal with it so it is done right first time without further expense.

You seem like an intelligent and articulate fella...save your £250 (you might need it)...and do it yourself It's all pretty straightforward and you will get lots of free help and advice on the forums....

As always, I would advise you contact one of the free debt counselling services - CAB, CSSS etc

Good Luck

dojoman

Hi and welcome to the forum, whatever you do, do not pay anyone to help you go BR. The process is quite straight forward and is relatively easy to do. Natwest are very anti BR and you would be extremely lucky to keep your accounts with them. As for using a basic account for business, whilst I cannot speak for Barclays, I know it is against the T&C for the coop cashminder account. Please talk to one of the debt charities or an IP otherwise your BR could be refused by the judge.


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

iantoday

JMV and Dojoman, thank you for your help and quick replies. I did ask Natwest to put what they said in writing but they refused. I'll ask my Business Manager instead of someone in a call centre. I have only just opened the account and it is convenient for it to be at Natwest.

I'm hesitant to go bankrupt if I could lose the business account, although I would probably still be better off regardless. I think if I could lose my personal account too, then I definitely won't do it.

I believe bankruptcy results in all savings taken as well as valuable assets. So if I don't pay for a bankruptcy service, won't the money saved just go to the creditors anyway? I would rather give it to a company that deserves it if I have to lose it.

dojoman

iantoday wrote: »

JMV, thank you for your help and quick reply. I did ask Natwest to put what they said in writing but they refused. I'll ask my Business Manager instead of someone in a call centre. I have only just opened the account and it is convenient for it to be at Natwest.

I believe bankruptcy results in all savings taken as well as valuable assets. So if I don't pay for a bankruptcy service, won't the money saved just go to the creditors anyway? I would rather give it to a company that deserves it if I have to lose it.

Only assets that are worth over a £1000 at auction are usually taken, use the £250 for living expenses and nothing will be said.

iantoday

What about a car? I'm told vehicles needed for work will not be taken. I am about to buy one which costs £1400 which isn't excessive in my opinion.

I'm pretty sure something would be missed, forgotten, or left out if I do it myself. You say it is easy, but a bankruptcy application 32 pages long does not sound easy. I get very stressed with bureaucracy and wasteful forms.

Tupperware_Queen

iantoday wrote: »

I'm hesitant to go bankrupt if I could lose the business account, although I would probably still be better off regardless. I think if I could lose my personal account too, then I definitely won't do it.

forgive me, but whilst I don't think BR should be a last resort - if you have a realistic alternative, you should get some advice before making any big decisions. Either way, at least talking it through with someone will give you some perspective.

I believe bankruptcy results in all savings taken as well as valuable assets. So if I don't pay for a bankruptcy service, won't the money saved just go to the creditors anyway? I would rather give it to a company that deserves it if I have to lose it.

Why not get some free advice from the CAB or CCCS, and give the money to charity! None of these debt companies deserve your hard earned money - not when there are independant FREE alternatives.

But then if you can afford to lose £250, why are you condsidering BR? Sorry - don't mean to sound catty, just wondered!!

dojoman

iantoday wrote: »

What about a car? I'm told vehicles needed for work will not be taken. I am about to buy one which costs £1400 which isn't excessive in my opinion.

I'm pretty sure something would be missed, forgotten, or left out if I do it myself. You say it is easy, but a bankruptcy application 32 pages long does not sound easy. I get very stressed with bureaucracy and wasteful forms.

If you feel that you cannot do it alone then that has to be your decision, and it may be money well spent.

iantoday

Tupperware_Queen wrote: »

if you can afford to lose £250, why are you condsidering BR? Sorry - don't mean to sound catty, just wondered!!

I can't afford £250 every month, not even close, but I have enough in savings now, plus a little of my overdraft to cover these costs. Of course, I would like to save it but not as much as I want to avoid what I think is huge stress from having to do it myself and likely get something wrong resulting in more costs if I need to go to court a second time due to forgetting something. I'll visit my local CAB and see what they say.

Tupperware_Queen

iantoday wrote: »

I can't afford £250 every month, not even close, but I have enough in savings now, plus a little of my overdraft to cover these costs. Of course, I would like to save it but not as much as I want to avoid what I think is huge stress from having to do it myself and likely get something wrong resulting in more costs if I need to go to court a second time due to forgetting something. I'll visit my local CAB and see what they say.

ahh I see. Well good luck, I found the CAB absolutely marvelous, really helped me to get sorted out. Thats why I would always recommend them above any company (got stung by a debt management company in years gone by :mad:)

debtinfo

Hi IAn, can i ask how much you have paid for your franchise, and what does it entitle you to, ie a certain area. Also is there anything in the franchise agreement about bankruptcy, The reason i ask the first question is that technically the businees will be closed and all assets can be taken by the OR (wuth a couple of exceptions) one of which may be goodwill or custoer client bases or the rights to trade in an area etc