Would my bankruptcy petition be accepted or rejected?

Sandwich

These are my circumstances:

-I owe around £800 in Council Tax.
-Around £15,000 in a Student Loan (from the SLC).
-Around £9000 in a Career Development Loan (from the Co-op).
-Around £7000 in an 'educational loan' from Sallie Mae, who no longer operate in the UK.
-I'm finishing off my PhD and looking for full-time, permanent work, but it's very difficult to find anything at the moment. I currently have a couple of part-time jobs but my total yearly income is only around £6000.
-I'm in receipt of Council Tax Benefit and Housing Benefit.
-I've just started paying my Council Tax liabilities back and the first payment on my CDL is due in around a month.

Faced with this situation I've came to the conclusion that my only option is to go bankrupt. I can't really afford the Council Tax repayments but when the CDL repayments start at £200 per month I will be in real trouble. Also, the payments on my 'educational loan' (which are also for £200) should have started months ago but because Sallie Mae went bust I don't know what's going on with those.

What I'd like to know is, is my application for bankruptcy likely to succeed in these circumstances? Do I need to be behind on my loan repayments before I can file for bankruptcy, or is knowing that I can't pay them enough?

Also, what will going bankrupt cost me considering my income and the fact that I receive some benefits?

Also, I know the SLC loan and the Council Tax liabilities don't go away just because of bankruptcy, but I take it all the rest will?

Thanks for your advice.

IF

Hi Sandwich did you contact a debt charity as advised here:-

https://forums.moneysavingexpert.com/discussion/comment/41129534#Comment_41129534


You won't be refused BR if you are Insolvent and the general rule is that you must have taken advice. That can be from the debt charities, an IP, an Accountant or a Solicitor. The Judge just wants to be sure that you can never come back and try and overturn the order on the basis that you were not aware of all the consequences.

Best wishes

If...x

dethbidonut

Hi, not sure about the other details, but I was paying my creditors via my redundancy money right up until BR. I sought some free independant advice and was advised BR was an option. I was never behind in my payments when i went BR.

I believe it costs around £700 pounds to go BR though...

Once declared BR the debts are not your responsibility any more and are effectively written off subject to the OR setting up any IPA etc.

Hope this helps and take care.x

NeverAgain_2

Sandwich,

I think you will be able to present your finances in such a way as to qualify for bankruptcy, but you are right when you say the student loan and council tax cannot be included.

Thus you will be going bankrupt for about £16,000.

It seems a rather drastic step for such a relatively small sum, given that you have earnings potential.

tigerfeet2006

The Council Tax can be included.

As If says you really do need to take advice from one of the debt charities. If they recommend BR then we will help and support you throught the process as much as we can.

Also if you are on a low income you may get a remission on the court fees amd/or find help paying the OR's fees,

From the LOOK HERE FIRST: Bankruptcy Help sticky
Court fee remission and forms.

• HMCS - Court fees do you have to pay them? (The form and guidance on completing the fee remission form included). (pdf)
• Example application for a fee remission based on gross annual income - EX160 (Thanks to NE Derbyshire CAB)
• Example application for a fee remission based on permitted benefits - EX160 (Thanks to NE Derbyshire CAB)
• Possible assistance with Bankruptcy costs / fees (Thanks to NE Derbyshire CAB)

Council Tax
http://www.bis.gov.uk/insolvency/personal-insolvency/bankruptcy-debts#council-tax-arrears

NeverAgain_2

...The Council Tax can be included...

Oops, that's one thing I've learned today, and it's only mid-afternoon, so perhaps there will be others.

tigerfeet2006

It can be a little complicatted and not every CT department knows their !!!! from their elbow so you have to make sure it is dealt with properly but it can be done.

Sandwich

NeverAgain wrote: »

Sandwich,

I think you will be able to present your finances in such a way as to qualify for bankruptcy, but you are right when you say the student loan and council tax cannot be included.

Thus you will be going bankrupt for about £16,000.

It seems a rather drastic step for such a relatively small sum, given that you have earnings potential.

Hmmm... interesting point. Two things though. I say that those loans are for £16,000, but I forgot to mention that that is what I received. The total amount repayable will probably be more like £30,000.

Secondly, even if I wanted to avoid going bankrupt for the sake of that amount of money, I don't see how I would have the option because in my current circumstances I just don't have the money to pay even £200 per month, let alone the £500+ that I might end up with soon.

Sandwich

Also, for the people here who have dealt with bankruptcy court before: is it the case that pretty much anyone in significant debt and without the means to keep up with repayments is likely to be successful in petitioning for bankruptcy?

I only ask because I'm worried that I'll spend £700 only for the court to reject my application.

philnicandamy

You wont be rejected...trust me

Everyone who is insolvent (unable to manage current debt level) can petition for bankruptcy themselves

the ONLY reason it could be refused is if your not currently insolvent or you've not taken advice from a debt charity helpline etc

debtinfo

just to add to what phil says, when we say insolvent the measure that is used in this circumstance is that "you are unable to pay debts as they fall due"