Bankruptcy Qs

HOLIDAYMAD_2

srichar3 wrote: »

Hi, im considering bankruptcy, me and my wife have struggeld with debts for years, every year getting more and more in debt as we juggle our finnance and its now led to the break up of our marriage due to the stress, Im now in a situation where my basic living expenses and debts come to £100 more than my saliery every month before I even start of fuel, food and cloths.

Upto now i have not missed any payments on any of my accounts as I dont want to screw up my credit file unless I decide there is no other option.

Can I file for bankruptcy without missing any payments? or must i have defaulted on my debts first?

Also what will happen to my saliery untill im discharged? does the OR take this off me and leave me with just my basic living costs?

What about my employer? will the OR inform my employer about me going bankrupt?

Thanks in advance Steve

Secure debts are not part of BR only if you have left the property and have therefore been turned into a unsecure loan. ie when people get repossessd etc.

Employment contract will say if you can work as a bankrupt.

Rental lease i dont think is needed by the judge, what the judge does is looks in details at the following from the statement of affairs.

Assets
Secure Debts
Unseure Creditors
Income
Reason for BR,

they may then question why you are going BR ie high assets or high surplus income , they then decide to agree the BR or not.
The judge looked at my SOA in a lot of detail.

Also when you go BR , you repay the tax from your salary back to the OR in the undischarged time frame that is left , that is from when the OR informs you to do so , you are then given a Tax number for a BR to give to your payroll team, so yes the payroll team may realise your have gone BR
.
Many for this reason go BR in the last quarter of a financial year as it takes several months for the OR to tell you to do this , and only last in that financial year so if like me you go BR in March its not taken over the next financial year but only applies for the current financial year.
So hense my payroll team would not know as its to late to put in place, but if i had gone BR in say April, without doubt would be put in place.

Ineedaname

HOLIDAYMAD wrote: »

Rental lease i dont think is needed by the judge, what the judge does is looks in details at the following from the statement of affairs.

Printed on the 6.28 SOA form available to download from the IS website:

"

You must take or send to the Official Receiver a copy of your lease or rent agreement.

[FONT=&quot]A rent demand or rent book will help if you do not have a copy agreement."

[/FONT][FONT=&quot]My Court [/FONT][FONT=&quot]asked for a copy of the rental agreement to be brought with my papers on the day. I think they then forward it to the OR. It's the only 'up front' request for paperwork, everything else the OR will ask for post Court date.

So I stand corrected in that it's not actually required by the Judge. [/FONT][FONT=&quot]
[/FONT]

freddy911

So what about my secured debts? if we have left the house and dont oppose repossession will these be included in the BR? or can I still b chased for the shortfall after discharge? which I would image would be 30k+

Thanks

Ineedaname

I hope an experienced member will come along shortly to explain this properly, but didn't want to read and run.

So, if the house is repossesed then the mortgage becomes an unsecured debt and is included in the BR. Just don't sign anything from the mortgage company accepting responsibility for the shortfall.

HOLIDAYMAD_2

Re the tenancy agreement the Court may ask for that , but i cant see why as they only fax the main paperwork to the OR,
The OR is not part of the County Court , so they will prob ask for that seperately.

i suspect its been asked to confirm residency, esp if you have recently moved, because you can not declare bankruptcy in a area you havent lived in for less than 6 months, you have to go back to the previous area, so if you changed addresses the court will prob want to see it to be satisfied you are at that address.

This would have been something people would have done to avoid being named in the paper previously if they didnt want people locally to know. Ie set up a fake address in a different district for BR purposes.

The court never really asked for anything off me, the judge however did look at length and questioned some points on my SOA, not in a bad way but for reclarification - i just kept to the facts , they are not intrested in hearing the background.

Re the OP question on charging orders and secure debts, a CO has been given and turned into a secure debt for a breach of a CCJ on a unsecure debt ,they go for the property because they could in fact force the sale and get money back if there was any equity.

My understanding and i think property, (im also a home owner ) is confusing if you remain , is you can only go BR on what you owe at the time you petition , and can only be unsecured , that is why many have left the property at point of BR, or the the lender has agreed to the abandonment and accepts that person no longer has any legal intrest in the property or the BR has been through the repossession process but may be waiting for a baliff warrant . It can take forever for a warrant to be issued and the person has the right to remain until one is issued.

When that has happened as there is no longer any legal intrest in the proeperty , the BR turns that secure debt into a unsecure one as as do all unsecure charges when the asset has gone legally , BUT if you stay AND possession has not been agreed any future debt cannot be added into that BR, and hense why this is why a lender doesnt like to agree voluntary repossession or accept no liaibility on a future shortfall.

I think its very much down to the lender whether they then would write off that new debt if they repossed but they CAN continue to chase you AND go for RECOVERY action for that amount . Hense why some people are forced into being made BR a 2nd time.

Hope that helps

Ive had several discussion with many people and lenders all act differently, but the principal of my post is correct.

This is why i dont encourage home owners to go for BR until possession has been sought. But many want to abandon and go into rental because they think , it gives them more security with a agent as not a declared BR but in fact it can create a heap of mess. So i say save the money for a years tenure , stay until you are repossed and the legal intrest has been removed then go BR.

dojoman

My OR never asked for the rental agreement just the address of the LL.

fermi

srichar3 wrote: »

So what about my secured debts? if we have left the house and dont oppose repossession will these be included in the BR? or can I still b chased for the shortfall after discharge? which I would image would be 30k+

Thanks

Yes. The shortfall will be covered by the bankruptcy EVEN IF the repossession and sale does not take place until after your bankruptcy date.

The only thing that might prevent that would be if after your bankruptcy date you sign a deed of acknowledgement for the shortfall making you liable again.

Obviously, many lenders will want you to sign their voluntary repossession forms if you are giving the house back post BR, and they will sneak in the deed of acknowledgement in the hope that you won't realise what you are signing.

So most people giving a house back after BR find it better to either write their own letter voluntarily surrendering the property, or alternatively just leave the lender to do it through the courts.

Tupperware_Queen

srichar3 wrote: »

Hi thanks for your responce can i ask, did you employer find out from the OR or any other sorce that you had been made bankrupt?

Thanks

I told them myself, couldn't see the point in keeping it secret

HOLIDAYMAD_2

i dont think that is quite right, i think legally the lender can pursue, but i think they often dont.

Just to add i think it will also depend if a suspeneded possession order in in place, becasue possession has been granted albeit it is suspended.

Think of it from a lenders point how can they be sure you have left as you you still have the legal right to the property. Only in the last couple of days someone was being pursued for CTAX after they had left and had moved into a rental property, fact was the costs were adding on and the person said may as will just move back, becasue at that point he had abandoned and not been formally repossessed. Therefore had legal intrest in it and rightly could return.

But there is nothing in law to say that a future mortage debt ie non payment or secure charges must be treated post BR and part of the BR.

But as ive said it can be confusing, lenders do what they want if possession has not been granted and are allowed to make that decision..

fermi

HOLIDAYMAD wrote: »

i dont think that is quite right, i think legally the lender can pursue, but i think they often dont. Because how can they be sure you havent taken up reoccupation as you you still have the legal right to the property.

there is nothing in law to say that a future mortage debt ie non payment or secure charges must be treated post BR and part of the BR.

Wrong I'm afriad.

A bankruptcy debt is legally defined as:

(a) any debt or liability to which he is subject at the commencement of the bankruptcy,

(b) any debt or liability to which he may become subject after the commencement of the bankruptcy (including after his discharge from bankruptcy) by reason of any obligation incurred before the commencement of the bankruptcy,

As such, a mortgage shortfall becomes a bankruptcy debt, even if that shortfall isn't realised until after your bankruptcy date or discharge.