Life after bankruptcy?

Catalyst

Having failed to pay our IVA for 4 months, it is likely that bankruptcy is the best solution. In the last 3 months we have been unable to pay the garage bill, pay for our car (now repossessed), have had a house repossessed (rental investment and expecting huge shortfall bill), pay bills, nor buy food - the point where we realised it had got out of hand.

We are both self-employed and therefore cash flow is always the issue. As soon as the money is in - it all goes out and there is nothing left at all. We spent 2 weeks with £0.71 in our account. Very worrying. My question is whether there is life after bankruptcy. We have 3 children, the potential to earn well, but not now. Currently, the nursery bills are huge approx (£1200 pcm) and we have a lovely house that we may lose. However we are over 40, and it feels like a tremendous waste - and it would be great to hear that we can survive and possibly, grow from this.

Questions:

If we are to go bankrupt we could show that we currently have less income than outgoings, but being self employed our income goes up and down.

Would we still need to pay regular amounts for the next 3 years as per our IVA? Our nursery bills will reduce from Sept to around £800pcm so we may well have surplus income, but this is unknown as we are self-employed. Last year and last quarter earnings show that we can't afford to cover our debt + living costs.

Our IVA was £500pcm and up until Dec we were paying this although we were defaulting on other bills.

We really could do with a short sharp bankruptcy as completely tired, worn out and want to live again.

If we go bankrupt before the repossessed property is sold, can the shortfall be claimed after bankruptcy?

Our IVA company have not said what they are going to do next - other than send a letter saying we are in breach of our contract. Should we persue bankruptcy ourselves or wait for them to do it - if they do at all? I am mindful that the company is still making money out of our payments, and from the outset we were encouraged to 'up' our projected income targets, but sadly we have not been able to reach them.

Our IVA company have said that they cannot offer us advice around whether or not to persue bankruptcy, so where should we go for some good 1-2-1 advice?

Anybody come out the other end of bankruptcy that can offer support?

Any help gratefully received.

tigerfeet2006

Catalyst wrote: »

Having failed to pay our IVA for 4 months, it is likely that bankruptcy is the best solution. In the last 3 months we have been unable to pay the garage bill, pay for our car (now repossessed), have had a house repossessed (rental investment and expecting huge shortfall bill), pay bills, nor buy food - the point where we realised it had got out of hand.

We are both self-employed and therefore cash flow is always the issue. As soon as the money is in - it all goes out and there is nothing left at all. We spent 2 weeks with £0.71 in our account. Very worrying. My question is whether there is life after bankruptcy. We have 3 children, the potential to earn well, but not now. Currently, the nursery bills are huge approx (£1200 pcm) and we have a lovely house that we may lose. However we are over 40, and it feels like a tremendous waste - and it would be great to hear that we can survive and possibly, grow from this.

Questions:

If we are to go bankrupt we could show that we currently have less income than outgoings, but being self employed our income goes up and down.

Would we still need to pay regular amounts for the next 3 years as per our IVA? Our nursery bills will reduce from Sept to around £800pcm so we may well have surplus income, but this is unknown as we are self-employed. Last year and last quarter earnings show that we can't afford to cover our debt + living costs. If you have any money left after essential living costs have been agreed then you will have to pay it to the OR. Though this is flexible and can be adjusted up, down or suspended if your circumstances change, the suspendended months count towards the 36 months.

Our IVA was £500pcm and up until Dec we were paying this although we were defaulting on other bills. That alone shows you that it is unsustsinable and you should not of been advised to go for an IVA.

We really could do with a short sharp bankruptcy as completely tired, worn out and want to live again.

If we go bankrupt before the repossessed property is sold, can the shortfall be claimed after bankruptcy? No, the shortfall will fall into the BR when it is sold, even if it is after your discharge.

Our IVA company have not said what they are going to do next - other than send a letter saying we are in breach of our contract. Should we persue bankruptcy ourselves or wait for them to do it - if they do at all? I am mindful that the company is still making money out of our payments, and from the outset we were encouraged to 'up' our projected income targets, but sadly we have not been able to reach them. You may need to get a certificate to say the IVA has failed as some courts require this.

Our IVA company have said that they cannot offer us advice around whether or not to persue bankruptcy, so where should we go for some good 1-2-1 advice? Business Debtline are the chaps to talk to http://www.bdl.org.uk/
Anybody come out the other end of bankruptcy that can offer support?

Any help gratefully received.

Talk to BDL and have a read of the boards. Make sure you read the sticky marked LOOK HERE FIRST-Bankruptcy Help... Ask any questions you need and keep reading.

capeverde

just thought Id give my thoughts, Im 44 and due to be released from bankruptcy next week. Obviously there is a stigma, but it can be as good or as bad as you make it. Firstly theres no point keep denying your situation, youre there for whatever reason and you need a plan to get out of it. If theres no way to balance your books and bring your revenue above your outgoings theres only one way it will end up. You can either prolongue this or deal with it head on. I advise the latter. Theres no pint in an IVA or any other scheme if you dont have a property you wish to keep. Whatever you choose your credit file is destroyed for the same period, its just that with BR you dont have to keep making payments and can have a fresh start (in most cases). You can always have businesses in a family members name and with the advent of chip and pin cards, it makes the day to day things like refuelling no problem. You will have to deal with the fact you will be treated like a leper by financial institutions for a period of time, but you just have to play the game and not get upset when some spotty oink in a hoody waves his gold card when you cant even get an account. There are ways and means and I can honestly say my BR hasnt affected me in a negative way in any shape of form. Its been a weight off my shoulders. Yes banks could behave differently and seperate for example somebody who deliberately spent past their means and then just threw the towel in, from say somebody who was forced into this situation from a seperate company going bust and owing them money for example which has a knock on effect. I personally dont think people in this situation should be penalised, but our views dont count. Just play the game and if you are fortunate enough to be in a situation where youre income is linked proportionately to the amount of effort you put in, lifes great. Wishing you all the best and dont let things get you down, just take it that today is the first day of the rest of your life.

unquiet-mind

I'm self-employed too, and just discharged after BR last June. Best thing I ever did! It's hard to describe the relief and the weight off my shoulders. I'm now free and clear and debt free.
I based my SOA on my previous year's income. The OR understood that as I was self-employed my income varied a lot, so said not to worry about updating them whenever my income changed - just to send details after six months, As it was, I was offered early discharge before the six months were up (though it took a lot longer before that went through).

Catalyst

Many thanks for the advice, and it does feel like a relief to be starting to talk about BR. Had a conversation with business debtline, and thanks again for the steer.

Advice was to consider a DMP which is interesting considering that I am on an IVA already. So now more to consider. I have also recognised that I am interested more in ensuring that I have a future, and have time to invest in my children. Spent the first day of their holidays in a horrible mood, couldn't concentrate, wondering what I had in the fridge (not much) and things going round and round.

Can I ask for your advice: Our house is valued at £355 and mortgage is £315. We bought for £355. Presumably this is more than enough for the OR to sell the house immediately rather than after 2yrs and 3months?

JCS1

As it's a family home, then they will do nothing for the first year. Back in a min with a link

http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/home.pdf

Are you sure on the current valuation? With £40k equity then it is likely the OR will want to appoint an IP as your Trustee if you do go BR.

fiveyearplan

I got 3 estate agents to do a valuation for quick sale and pointed out all the things that were wrong with the house. That should give you a good idea what the real worth of your house is. It may be that you have less equity than you thought.

Catalyst

Many thanks for this and the link, will have a good read. I don't understand what an IP is? And how long would it run for?

JCS1

Catalyst wrote: »

Many thanks for this and the link, will have a good read. I don't understand what an IP is? And how long would it run for?

Would run for the same length of time. OR tends to deal with assets under £10K, for anthing above that they would look to apoint and Indepedent Practitioner as Trustee and they would deal with the assets (their fees also get paid from the BR estate)