bankruptcy help very worried...

arghhh

Sorry i'm new to the forum and having read through some of the threads already on here i have a few questions.

We (me and my husband) are currently in an IVA we are struggling to meet the payments and having spoken to the IVA company they are able to reduce the payments but only if creditors agree and they dont think they will agree to the new payment we are able to afford.

We've been approached by a company called 'consumer action' theire website is www. consumeraction. org (apparantly in the first year of being in an IVA it is usual to be contacted by companies offering alternatives)

this got us thinking about the bankruptcy route.... we have been advise that because we are in negative equity and have no assets where one is worth more than £3,000 we wouldn't loose our house and we wouldn't have any of our personal items taken from us. Is this true?

we are a family of 5, having 3 small children i really cant do anything that will risk us loosing the house
I have read many websites but the information is now starting to get conflicting, i have no idea what company to 'go through' to help us get out of the IVA legally and go down the bankruptcy route, you hear of so many bogus companies out there.

if it is true that we wouldn't loose the house, we are in about £7,000 of negative equity at the moment, i believe your 'estate' is monitored for 3 years, what if in these 3 years the housing market rises and we are no longer in negative equity? one company has told me that within the 3 years if the house prices do rise they will make us release the equity whereas another has said that because we are in negative equity when we file for bankruptcy the house is dismissed and wont be looked at again. also do they come and do a valuation of your house?

Bank accounts, because non of our current debt is with the bank we both use i have been told that we wouldnt loose our bank accounts, but again another company has told me i would and i wouldnt be able to continue with the direct debits that we have set up to pay the bills or recieve child benefit, tax credits e.t.c so am not sure how i would get these payments if i couldnt have them paid into a bank account?

I am a little concerned that the whole Bankruptcy procedure has been rather sugar coated and maybe isn't as straight forward as the 'consumer action' company have made it out to be.

If anyone could offer advice i would be most grateful, i am so unsure about the advice 'you wont loose anything you'll be fine' it just seems too good to be true!

Thanks in advance for any advice given

confused76

hi there and welcome

ok, first of all, i would suggest taking advice from one of the free debt charities

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

i don't know who consumer action are but i bet they will charge for advice that you can get for free.

have a read of this sticky for more info on bankruptcy https://forums.moneysavingexpert.com/discussion/1056083

bankruptcy is really the last resort and has its disadvantages so yes they are probably sugar coating it. please speak to one of the above and see what your options are

good luck x

arghhh

Hi

Thankyou for replying, i have contacted all of the above people and because we are in an IVA non of them will speak with us as the IVA is a legally binding contract and therefor they are not allowed to advise on us breaching the terms of the IVA.

I have read the sticky thread too but tbh there is so much information my head doesn't know if its coming or going anymore, one thing says yes the other says no and i am soo confused

Since taking out the IVA a year ago more debt has accumulated, in the form of arrears on gas and electric payments (even tho i have been paying they still want more) the company we recently switched to already has an oustanding balance of £187 on the account even tho i have been paying £50 a month since jan

I dont work, i cant afford to work and pay for childcare my husband works 7am till 7pm so gets home usually around 7.30pm so even the option for me to do nights isnt doable at the moment as i'd need to be up at 5am the next morning to look after the youngest. His wage is about £1,000 over the allowance for us to get anything like income support or working tax credits so we are quite literally scraping by with some weeks only having £30 to spend on food for a family of 5

i really just cant see a way out of this anymore

confused76

i've got to nip out now but if when i come back you haven't had more replies i will try and expand a bit more x

edit - have you tried the cccs online debt remedy?

arghhh

thankyou confused76

I have just rung the bank and anonymously asked about 'what if' i went bankrupt and i had an account with them.

They have told me that i would still be able to keep my account but it would get put to a basic cash account, as i only have a basic cash account anyway this isn't a problem for me, so i wouldn't need to change any direct debits and could still recieve payments and everything would stay the same there...

Bit of a relief on the banking side really didn't want to have to change everything.

Just need clarification about the house and assets now as thats my main concern.....loosing my house!

dojoman

arghhh wrote: »

Sorry i'm new to the forum and having read through some of the threads already on here i have a few questions.

We (me and my husband) are currently in an IVA we are struggling to meet the payments and having spoken to the IVA company they are able to reduce the payments but only if creditors agree and they dont think they will agree to the new payment we are able to afford. Try this route first and see what happens.

We've been approached by a company called 'consumer action' theire website is www. consumeraction. org (apparantly in the first year of being in an IVA it is usual to be contacted by companies offering alternatives) Don`t pay anyone to help you, you will need the money for your BR fees if you go down that route.

this got us thinking about the bankruptcy route.... we have been advise that because we are in negative equity and have no assets where one is worth more than £3,000 we wouldn't loose our house and we wouldn't have any of our personal items taken from us. Is this true? It is very rare for personal items to be taken especially household items. Anything they did take would have to fetch at least £1000 at auction for it to be worth their while.

we are a family of 5, having 3 small children i really cant do anything that will risk us loosing the house
I have read many websites but the information is now starting to get conflicting, i have no idea what company to 'go through' to help us get out of the IVA legally and go down the bankruptcy route, you hear of so many bogus companies out there. If you do choose to go BR you will have to stop paying your IVA, your IVA will have to fail before you go BR, this usually requires 3 missed payments to qualify.

if it is true that we wouldn't loose the house, we are in about £7,000 of negative equity at the moment, i believe your 'estate' is monitored for 3 years, what if in these 3 years the housing market rises and we are no longer in negative equity? one company has told me that within the 3 years if the house prices do rise they will make us release the equity whereas another has said that because we are in negative equity when we file for bankruptcy the house is dismissed and wont be looked at again. also do they come and do a valuation of your house? If the house price did rise, in the time the OR has to determine whether they have an interest in it, then you could possibly lose the house, or you could be offered the chance to buy back their interest in it.

Bank accounts, because non of our current debt is with the bank we both use i have been told that we wouldnt loose our bank accounts, but again another company has told me i would and i wouldnt be able to continue with the direct debits that we have set up to pay the bills or recieve child benefit, tax credits e.t.c so am not sure how i would get these payments if i couldnt have them paid into a bank account? The ONLY 2 BR friendly accounts are the Coop Cashminder and Barclays Basic, all others are likely to be frozen/closed.

I am a little concerned that the whole Bankruptcy procedure has been rather sugar coated and maybe isn't as straight forward as the 'consumer action' company have made it out to be. BR SHOULD BE THE VERY LAST RESORT, IT IS NOT SOMETHING TO BE DONE LIGHTLY.

If anyone could offer advice i would be most grateful, i am so unsure about the advice 'you wont loose anything you'll be fine' it just seems too good to be true!

Thanks in advance for any advice given

Hope this helps?

confused76

hi arghhh (love the name) what bank are you with? most banks close accounts when you go br with the exception of the coop cashminder or a barclays basic account. natwest seem to be a bit hit and miss with the step account

i don't really know much about the house side of things so hopefully someone else will come along and clarify. i think if you are negative equity now the OR will look at the situation again 2 years 3 months from br date and see if there is any equity in the house at this time.

you're already in an IVA and are looking to reduce payments. if they accepted your reduced payments would you consider continuing with it?

tigerfeet2006

Hi and welcome :wave:

First thing is to take a breath and don't panic.

arghhh wrote: »

Sorry i'm new to the forum and having read through some of the threads already on here i have a few questions.

We (me and my husband) are currently in an IVA we are struggling to meet the payments and having spoken to the IVA company they are able to reduce the payments but only if creditors agree and they dont think they will agree to the new payment we are able to afford.

We've been approached by a company called 'consumer action' theire website is www. consumeraction. org (apparantly in the first year of being in an IVA it is usual to be contacted by companies offering alternatives) Do not touch them with a barge pole.

this got us thinking about the bankruptcy route.... we have been advise that because we are in negative equity and have no assets where one is worth more than £3,000 we wouldn't loose our house and we wouldn't have any of our personal items taken from us. Is this true? You need to talk to your IVA as you are doing and if you feel that you cannot carry on you need to ask them about defaulting and then declaring BR. You can default any time you wish, you don't need permission. Then talk to one of the charities. What is the asset worth £3k? Anything that is general household won't be taken. Usually only items that would reach £1kish at auction will spark the OR's interest and you would have to declare. If your house is in negative equity then the OR will have no interest at that time but at 2yrs 3 mths he will come back and look at the house again. If the house has risen in price and is in equity, you will have a chance to buy the equity from the OR.

we are a family of 5, having 3 small children i really cant do anything that will risk us loosing the house
I have read many websites but the information is now starting to get conflicting, i have no idea what company to 'go through' to help us get out of the IVA legally and go down the bankruptcy route, you hear of so many bogus companies out there. You don't need any company to declare yourself BR. Take advice from someone like National Debtline when you are able. They will help you with any questions you have about the process and forms. You can also ask on here as a lot of people have been through it and can help you with support and filling in the forms and SoA. So you do not need to pay anyone and just pay the BR fees.

if it is true that we wouldn't loose the house, we are in about £7,000 of negative equity at the moment, i believe your 'estate' is monitored for 3 years, what if in these 3 years the housing market rises and we are no longer in negative equity? one company has told me that within the 3 years if the house prices do rise they will make us release the equity whereas another has said that because we are in negative equity when we file for bankruptcy the house is dismissed and wont be looked at again. also do they come and do a valuation of your house? The OR will look at the house again in 2yrs 3mths. If' it is risen in equity then you can buy the OR's interest back at that point. If the equity is fairly low and you can't raise the money then the OR could put a charging order on the property so you can pay him when you decide to move and sell the house. Or he could sell the house and get the equity that way if you don't want to pay him. As you have time between BR and this procedure you can monitor house prices and start a saving to buy the equity if needs be. The OR will most likely ask you to get a couple of estate agents valuations and may also do a drive by valuation when the time comes.

Bank accounts, because non of our current debt is with the bank we both use i have been told that we wouldnt loose our bank accounts, but again another company has told me i would and i wouldnt be able to continue with the direct debits that we have set up to pay the bills or recieve child benefit, tax credits e.t.c so am not sure how i would get these payments if i couldnt have them paid into a bank account? There are only 2 BR friendly banks who definatly won't close your accounts, those are the Co-op Cashminder and the Barclays basic cash account. So if you decide to go BR change to one of those. You can continue with having all your benefits and DD's etc. paid from those accounts so who ever told you you couldn't is talking tosh.

I am a little concerned that the whole Bankruptcy procedure has been rather sugar coated and maybe isn't as straight forward as the 'consumer action' company have made it out to be. It is not easy and is a last resort but if it is the only resort then it is the best thing.

If anyone could offer advice i would be most grateful, i am so unsure about the advice 'you wont loose anything you'll be fine' it just seems too good to be true!

Thanks in advance for any advice given

Please do not talk to any of these firms again, they are taking you for a ride. Say to your IVA firm that you wat to think about BR and see where they go with it. Talk to us and keep reading the forum, things will slowly sink in and start to make sense. Don't rush into anything.

arghhh

Thanks for the replies

both myself and my husband bank with lloyds tsb, we have been told by them that our accounts would get reduced to a basic account, which i have with them anyway... we have no debt with lloyds themselves whether this is a reason they wouldn't close our account i don't know.

our IVA review meeting is scheduled for the end of May the payments were £338 per month and they are now proposing they are reduced to £140 ~ a big drop which is why they don't think they will accept, we are already on a 6 year iva with some conditions thrown in too all of which had to be agreed to before the IVA could be accepted.

We don't have any assets that would fetch £1000 at auction we don't have anything that we have even paid more than £1000 from new lol even our car is off the road at the moment as we cant afford the repairs which are coming in at £300, the car is only worth a max of £500, we have no savings apart from the childrens accounts which are all in the childrens names not ours. We have 2 dogs but again i cant see that they will affect anything.

as mentioned previously we are in negative equity, having looked at 'up my street .com' it seems we may be in more negative equity than we thought we were, does the OR actually come and value your house or do they take the valuation based on what prices houses sold for within the last year in your street using websites like upmystreet?

We have been considering bankruptcy now for about 2-3 months it isn't a decision we have just come to over night and the only thing stopping us perusing is the fear of loosing the house, but as we keep being told an IVA is for people who have assets to protect and as we have no assets then we should have been advised that bankruptcy is the better route to have taken.

Confused i chose the forum name arghhh purely because thats all i seem to have going through my head at the moment so it seemed fitting lol so confused about what to do

arghhh

thanks for that tigerfeet

We have spoken with our IVA company about going BR but as expected they are keen to keep us on the IVA ~ its more money for them if we stay on the IVA

The money we would be 'saving' from paying the IVA would be what primarily made up the court payment for the bankruptcy so we are talking about 3 months or so down the line before we could actually file for bankruptcy anyway but i believe you have to have defaulted 3 payments on the IVA before you can file for bankruptcy?

philnicandamy

arghhh wrote: »

Thanks for the replies

both myself and my husband bank with lloyds tsb, we have been told by them that our accounts would get reduced to a basic account, which i have with them anyway... we have no debt with lloyds themselves whether this is a reason they wouldn't close our account i don't know. they have still been known to close accounts even after telling people they could keep

our IVA review meeting is scheduled for the end of May the payments were £338 per month and they are now proposing they are reduced to £140 ~ a big drop which is why they don't think they will accept, we are already on a 6 year iva with some conditions thrown in too all of which had to be agreed to before the IVA could be accepted.

We don't have any assets that would fetch £1000 at auction we don't have anything that we have even paid more than £1000 from new lol even our car is off the road at the moment as we cant afford the repairs which are coming in at £300, the car is only worth a max of £500, we have no savings apart from the childrens accounts which are all in the childrens names not ours. We have 2 dogs but again i cant see that they will affect anything. shouldnt do..

as mentioned previously we are in negative equity, having looked at 'up my street .com' it seems we may be in more negative equity than we thought we were, does the OR actually come and value your house or do they take the valuation based on what prices houses sold for within the last year in your street using websites like upmystreet? they usually will ask for 3 seperate valuations, ring a few estate agents & ask for the quick sale price of your property (tell em your moving away or something!) the OR wont come & perform a valuation so dont panic

We have been considering bankruptcy now for about 2-3 months it isn't a decision we have just come to over night and the only thing stopping us perusing is the fear of loosing the house, but as we keep being told an IVA is for people who have assets to protect and as we have no assets then we should have been advised that bankruptcy is the better route to have taken.

Confused i chose the forum name arghhh purely because thats all i seem to have going through my head at the moment so it seemed fitting lol so confused about what to do

Just a few thoughts...