Is bankrupcy right for me?

vicxzy

Hello,

I havent been in here before, Just looking for some help please.
I'm on a DMP done myself with advice from CCCS.
Basically Im separated, almost divorced after a lengthly separation.
I'm 8 months pregnant with my first child & live with my new partner in privately rented accomodation.
Due to pregnancy related ill health I have been unable to work for the past 7 months however I am still technically employed & hope to return to work after mat leave.
My only income now is stat maternity pay & OH is on minimum wage working full time, we are not eligible for any benefits as prev tax year I was working full time even though my income is very low now.
Im around 30k in debt (unsecured) & before doing DMP was minus £1470 per month on my inc/exp, I now pay £1 per month to my creditors although they refuse to stop adding interest & charges despite numerous appeals.
My Ex Husband lives in our ex marital home which doesnt have much equity in it nowadays & its just not selling either, its been on the market almost a year now & im only asking enough for it to clear off my mortgage & fees etc.
I'm devastated because I put lots of money into the house when we bought it 8years ago & have lost it all.
I was hoping to sell the house & make a couple of thousand to clear some debts then go on to an IVA when I'm back at work after maternity leave, this now looks very unlikely.
Our mortgage company are now also refusing to let us pay interest only until the house sells which means my ex Husband cannot afford to pay it.
Apart from my house my only asset is my car which my Dad thankfully bought for me to use a few years ago when I got made redundant from my prev job (I had a job car so lost my car with the job) it was only supposed to be a temporary loan but as my situation has worsened he has let me keep it longer & now I need it for the baby, The insurance etc is in his name but the car is registered in my name, would I sign this back to him before going bankrupt as technically it is his car & I would hate for him to lose it because of me, he is retired & has always banked on getting that money back one day.
Now I'm wondering if I should consider going bankrupt? Would I lose my rented house?
Im so confused any advice would be great thank you x

Ineedaname

Hi there and welcome to the forum.

Firstly, I understand tax credits can be based on the current year's expected income if it is considerably lower than the previous year. So might be worth contacting them again about that.

I'm not sure how the insurance can legally be in your dad's name if you are the main driver and the registered keeper of the vehicle. Usually road tax cannot be purchased unless insurance and V5 details match. Also, if your dad is down as the main driver but only you use the car then you might have problems if you need to claim and the insurance company finds out you are the main driver.

However, as regards legal ownership, it might be best to put something in writing to state the car was purchased by your dad and still belongs to him. Then you won't need to give it up if you go BR.

Check your rental contract to see if there's any BR clause in there. If not then it shouldn't affect your home if you go BR. All the OR needs to see is a copy of your rental agreement, some may wish to contact your landlord as well, but it's just to check what type of agreement you have (usually the standard AST) and whether you have any arrrears.

Can you manage with the DMP until you return to work and then enter the IVA anyway, even without paying a chunk off?

dojoman

Hi and welcome to the forum

Please contact one of the charities below, they will offer free and impartial advice.

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

vicxzy

Ineedaname wrote: »

Hi there and welcome to the forum.

Firstly, I understand tax credits can be based on the current year's expected income if it is considerably lower than the previous year. So might be worth contacting them again about that.

I'm not sure how the insurance can legally be in your dad's name if you are the main driver and the registered keeper of the vehicle. Usually road tax cannot be purchased unless insurance and V5 details match. Also, if your dad is down as the main driver but only you use the car then you might have problems if you need to claim and the insurance company finds out you are the main driver.

However, as regards legal ownership, it might be best to put something in writing to state the car was purchased by your dad and still belongs to him. Then you won't need to give it up if you go BR.

Check your rental contract to see if there's any BR clause in there. If not then it shouldn't affect your home if you go BR. All the OR needs to see is a copy of your rental agreement, some may wish to contact your landlord as well, but it's just to check what type of agreement you have (usually the standard AST) and whether you have any arrrears.

Can you manage with the DMP until you return to work and then enter the IVA anyway, even without paying a chunk off?

Thanks for your advice,

Sorry I dont think I explained the car situation very well, My Dad lives down the road from me & is the main user of the car but I'm a named driver on the insurance & use it maybe once or twice a week if that to go to antenatal appointments or do the weekly shop, it was insured in his name only originally as he was the only one driving it for the first few months until I left my old job & gave my car back then he put it into my name as I was going to buy it off him & transfer everything to my name but that never happened as my situation got worse so he just said to me I could borrow the car when I needed to then buy the car from him when I managed to get the money together but I never have been able to so maybe I should just sign it back to him as its unrealistic to think ill ever be able to afford to buy it from him now.
I will recheck about tax credits thank you, they were very off with me when I spoke to them & basically told me to get lost & made me feel like a criminal for asking for help from them.
Im not sure what AST means? Is OR official receiver?
I could do the IVA when I go back to work but am worried that without paying a chunk off the total my income wont be able to cover the minimum repayments on an IVA of 30k as I will only be able to go back to work part time.

Thanks you x

NeverAgain_2

...Im not sure what AST means? Is OR official receiver?...

OR is the official receiver - he's the civil servant who deals with your case after you have been declared bankrupt.

AST had me stumped for a minute, but it's assured shorthold tenancy - the rental agreement you have on your house.

Don't think you need to worry about that, apart from anything else your new partner will be on it and he's not going bankrupt.

It can be hard to rent a new place as a bankrupt, but you are already living there.

Don't worry about the car, either, your dad is letting you use it now and again, it's not something you need to mention in the bankruptcy paperwork.

alastairq

hi..when you mention 'signing the car back over to Dad'...does that mean you are the Registered Keeper?

If that is the case, you will simply have to demonstrate that your Dad, not you, is the actual owner.....original bill of sale, etc.

The downside of not being the 'owner ' of the car is , it will be difficult [but not impossible] to get an OR to agree to allowing running costs on your SOA ..[Statement of Affairs]

NeverAgain_2

...The downside of not being the 'owner ' of the car is , it will be difficult [but not impossible] to get an OR to agree to allowing running costs on your SOA ..[Statement of Affairs]...

Good point, and one I hadn't considered.

Common sense suggests the OP might be able to say something like: "I'm allowed to borrow my dad's car when I need it, but I have to pay for my own petrol and a share of the other running costs."

That statement has the added benefit of being true.

Ineedaname

I think the car should be 'signed' back to dad though or he could have difficulty buying road tax next time around. Otherwise Alistair and NeverAgain have covered this.