Considering Bankrupcy, advice please, thank you

kitty_and_gucci_2008

Hello,
I am in need of some advice.
I am in £31k unsecured debt, have a job that pays £21k per year, wife that earns £8k part time and a 14 month old daughter. We rent our current property. We have a car that I purchased using a bank loan of £15k that I got in July 2010 car cost £9k, and on the market is now worth approx £5k, as the car that we had previously we had paid 50% therefore handed the car back. The rest of the loan (£6k) was used to pay off my debt.
Each month we are just about managing to get by, by that I mean we have about £5 left per month, sometime I have to borrow off family or use credit cards that I have paid the min off each month to get by, it’s a terrible situation to be in, now we are going to be paying out more than our combined income
The £31k debt is in my name, and our household income and expenditure is below:
My Wage in after tax/NI £1376
Wife Wage in after tax/NI £617
Child Benefit/Tax Credits £464
Total in including CB&CTC = £2457
Total debt per month £695
Other outgoing, such as living expenses, rent, childcare, owe family = £1778
Left with minus£13 per month.
With this I am seriously considering going bankrupt myself, however I am not sure if they will make my wife bankrupt as well because we put our money together to pay the debt, bills etc. If going off my wage only, there is no way I could afford to pay all the debt, bills etc. My wife was bankrupt about 4 years ago.
I have 2 questions, the first is, will my wife go bankrupt as a result of the debt being in my name?
Second question is, what will happen with the car, as we use the car to get to work which is 13 miles away, and the nursery is on the way to work, approx 10mins away from work.
Any advice would be greatly appreciated, thank you.

bottleofred

Hi kitty and gucci,

I think you should consider a dmp rather than bankruptcy, but the final decision will obviously be up to you. I also think you should do a full statement of affairs http://www.makesenseofcards.com/soacalc.html and then you'll get tips and advice on how you can save cash, which can then go towards your debts. If you did go bankrupt, it wouldn't affect your wife as long as the debt is solely in your name. Regarding the car, I'm not actually sure, as it isn't actually hire purchase on the vehicle. Hopefully someone with more knowledge than me will be along soon to provide more advice.

Good luck whatever you decide to do

Red

FuzzyCub

Firstly you should contact one of the debt charities they will help you work out the best way to deal with your debts. If BR is the right solution in your circumstances the answer to you questions:

If all debts are in your sole name i.e. not joint loans then your wife would not be held accountable for them should you become BR. If she is a joint account holder she would become responsible for the entire debt not just her "half" should she not declare BR.

I believe you would be unlikely to keep at car valued at 5k. If you can prove a need for a car, such as transport to/from work you would be allowed a car valued upto 2k max.

The CCCS / CAB are great places to start!

beanielou

As far as I know your wife would be unable to go bankrupt again if she was bankrupt 4 years ago as you have to have a gap of at least five years.

JCS1

beanielou wrote: »

As far as I know your wife would be unable to go bankrupt again if she was bankrupt 4 years ago as you have to have a gap of at least five years.

This is not true, you can go bankrupt again within 5 years but the OR may decide to go through your case with finer detail.

BAILEYS6904

I would recommend doing a more detailed SOA, there may be some cutbacks that we can see, or help with. Also, alarm bells are ringing a tad, as if you're wife went bankrupt 4 years ago, and you're both in the same boat again, is there an underlying thing there?

HTH xx

beanielou

JCS1 wrote: »

This is not true, you can go bankrupt again within 5 years but the OR may decide to go through your case with finer detail.

Thanks for that,thought it was 5 years.:o

Trollfever

JCS1 wrote: »

This is not true, you can go bankrupt again within 5 years but the OR may decide to go through your case with finer detail.

Agreed and possibly impose a Bankruptcy Restriction Order/Undertaking.

kitty_and_gucci_2008

I am considering selling the car before I go BR, and buy a car for £2k, and pay off some debt and use £60 for the BR fees.

RAS

kitty_and_gucci_2008 wrote: »

I am considering selling the car before I go BR, and buy a car for £2k, and pay off some debt and use £60 for the BR fees.

Hi

Please be very careful about this. You are not allowed to favour individual creditors.

If you are seen by the OR to have paid off some creditors and not paid others, he could demand the money back fro those you paid and give you more than just rapped knuckles.

If you have got say £3000 to pay £30000 debt, everyone gets 10 pence in the pound.

With respect to a car for work, the OR will let you have money to fund a car if this is essential for your work or if it is impossible to get to and from work otherwise.

Do go over to BR forum and speak to them.

And take proper advice, as you may not actually meet the criteria for BR if you are close to being solvent.

RAS

A couple of other things.

1. if the debt is in your name then your wife is not involved in the bankruptcy in any way, except that her income is taken into account in assessing your portion of the household costs. The problem arises if you have any joint accounts, which become her problem.

2. You really need some detailed advice on your expenditure as this will affect your IPA. At present I recking you could be paying up to £600 per month under the new rules. Please note that debt to family is not a special category and if you try to keep that out of the BR and pay that when not paying other creditors is a no-no.

Put a full SOA up on the BR forum and they can help you.