I need Help Understanding Bankruptcy

lazy_B_2

Hi There...

Thank you for your time. I have recently been to court with 1st plus who are seeking possession of my property, I have been in arrears with them for the last 2years..I have been making payments but not the full payment, I am currently unemployed (redundant), single mom with 2 children 3yrs and 8yrs.. The court has suspended case for 3months which after date I will be expected to make the full payment plus £25 extra..which I cannot afford due to other high outstanding debts..
I am considering bankruptcy, I have the all the information, but I am struggling to understanding the information and the jargon.. I have spoken to the CAB and I was told I could only book an appointment if I decide to go ahead and want help with completing the forms.. Can anyone recommend where I can go to speak to someone before I make that decision to bankrupt..It most likely I'm going to have to take that route because things are very stressful for me and the kids right now..
I know its probably something straight forward and I should understand it..I think beacuse I 'm a bit stressed finding hard to take it all in properly.. If someone can answer this one question for me please, will my home (which is mortgaged), car and everthing in my home, will it all be sold.

Thank you for your time everyone !

silvercar

If someone can answer this one question for me please, will my home (which is mortgaged), car and everthing in my home, will it all be sold.

You need to decide if you could afford to stay in your home, if your unsecured debts were written off in bankruptcy.

So, with no unsecured debts, could you afford the mortgage and £25 to the arrears? If you can then staying in your home is an option. If you can't then the mortgage lender is within their rights to repossess as mortgages are excluded from bankruptcy.

If your car is necessary for work you may be allowed to keep it if it is cheap, or be allowed an allowance to buy a cheap car if yours is too expensive.

silvercar

The court has suspended case for 3months which after date I will be expected to make the full payment plus £25 extra..

What repayments are they expecting for the next 3 months - full / part/ none??

sonic55_2

Some points to note:

1. Do you own your house and if so is there any equity in the property. If you go bankrupt and there is equity in the property you will likely have to either buy the equity from the trustee or allow the trustee in bankruptcy to sell the property in order to pay the creditors.

2. To go bankrupt yourself you have to do a "debtors petition". This is not cheap and will cost you over £1000, which covers the court fee and official receivers deposit. Why not just wait until a creditor (ie the bank, credit card company etc) makes you bankrupt.

3. As to your other assets: car, clothers, furniture, tv, etc the Trustee In Bankruptcy is not allowed to sell these items. The kind of items he wants are high value items that are not essential to your daily life and "tools of the trade". If your car is very expensive and equity in it then he may want this selling. If it is old with no equity he will not require you to sell it.

4. You will get your automatic discharge from bankruptcy within 12 months, probably sooner if the official receiver is happy that nothing else needs investigating.

5. Rather than the CAB, you need to see an insolvency practitioner. But beware, some of them are dodgy. A good insolvency lawyer will give you a free meeting for an hour or so and give you some guidance.

dojoman

sonic55 wrote: »

Some points to note:

1. Do you own your house and if so is there any equity in the property. If you go bankrupt and there is equity in the property you will likely have to either buy the equity from the trustee or allow the trustee in bankruptcy to sell the property in order to pay the creditors.

2. To go bankrupt yourself you have to do a "debtors petition". This is not cheap and will cost you over £1000, which covers the court fee and official receivers deposit. Why not just wait until a creditor (ie the bank, credit card company etc) makes you bankrupt. Wrong the cost of going BR in England and Wales is £700

3. As to your other assets: car, clothers, furniture, tv, etc the Trustee In Bankruptcy is not allowed to sell these items. The kind of items he wants are high value items that are not essential to your daily life and "tools of the trade". If your car is very expensive and equity in it then he may want this selling. If it is old with no equity he will not require you to sell it.

4. You will get your automatic discharge from bankruptcy within 12 months, probably sooner if the official receiver is happy that nothing else needs investigating. Not guaranteed and fewer and fewer people are receiving an early discharge.

5. Rather than the CAB, you need to see an insolvency practitioner. But beware, some of them are dodgy. A good insolvency lawyer will give you a free meeting for an hour or so and give you some guidance. THIS IS DEFINITELY WRONG, THERE IS PLENTY OF FREE ADVICE SEE MY LINKS BELOW.[/QUOTE]



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

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



Below is a link you may found helpful about going BR?

https://forums.moneysavingexpert.com/discussion/1056083

Also this link to the Insolvency Service is useful!

http://www.insolvency.gov.uk/

kepar

3. As to your other assets: car, clothers, furniture, tv, etc the Trustee In Bankruptcy is not allowed to sell these items.

Surely the term should be chooses not to, rather than not allowed due to the low return s if any.

NeverAgain_2

Lazy,

The free advice charities linked by Dojoman above really are the way to go.

Apart from anything else, most judges will want your reassurance that you've spoken to one of them before making you bankrupt.

If you want more informal advice/opinions from us, post a few details of how much owe, your income and your mortgage situation.

The best advice for now is don't do anything hasty.

Even though a lender has taken you to court, you still have weeks if not months.

sonic55_2

I have a number of comments in response:

dojoman wrote: »

sonic55 wrote: »

Some points to note:

1. Do you own your house and if so is there any equity in the property. If you go bankrupt and there is equity in the property you will likely have to either buy the equity from the trustee or allow the trustee in bankruptcy to sell the property in order to pay the creditors.

2. To go bankrupt yourself you have to do a "debtors petition". This is not cheap and will cost you over £1000, which covers the court fee and official receivers deposit. Why not just wait until a creditor (ie the bank, credit card company etc) makes you bankrupt. Wrong the cost of going BR in England and Wales is £700I acknowledge an error here. When I said £1000, I was thinking of all ancilliary costs in addition to the OR deposit and court fee.

3. As to your other assets: car, clothers, furniture, tv, etc the Trustee In Bankruptcy is not allowed to sell these items. The kind of items he wants are high value items that are not essential to your daily life and "tools of the trade". If your car is very expensive and equity in it then he may want this selling. If it is old with no equity he will not require you to sell it. Here is the law:

a) Section 283(1) of the Insolvency Act set out what is in the bankruptcy estate: "all property belonging to or vested in the bankrupt at the commencement of the bankrupty..."

b) Section 283(3) of the Insolvency Act has some exemptions: "Subsection (1) does not apply to such tools, books, vehicles and other items of equipment as are necessary to the bankrupt for use personally...in his employment, business or vocation; such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his family.

So, to answer a later poster in this thread, the Trustee cannot sell personal items that are necessary to satisfy domestic needs.

4. You will get your automatic discharge from bankruptcy within 12 months, probably sooner if the official receiver is happy that nothing else needs investigating. Not guaranteed and fewer and fewer people are receiving an early discharge. Let me quote the law:

a) Section 279 (1) of the Insolvency Act 1986: "A bankrupt is discharged from bankruptcy at the end of a period of one year beginning with the date on which the bankruptcy commences"

b) Section 279 (2) of the Insolvency Act 1986: "If before the end of that period the official receiver files with the court a notice stating that investigation of the conduct and affairs of the bankrupt under section 289 is unnecessary or concluded, the bankrupt is discharged when the notice is filed.

Each bankruptcy is specific to its facts. As I said, subject to there being nothing further to investigate, the discharge will probably go through sooner than 12 months.

5. Rather than the CAB, you need to see an insolvency practitioner. But beware, some of them are dodgy. A good insolvency lawyer will give you a free meeting for an hour or so and give you some guidance. THIS IS DEFINITELY WRONG, THERE IS PLENTY OF FREE ADVICE SEE MY LINKS BELOW. Why is this wrong? Are you an insolvency lawyer or an insolvency practitioner? If not, you are not able to comment adversely. The free services you mention in the links are of course extremely helpful, but why discount having free advice from professionals working in this area? My comment was not wrong! What my commend did was present one solution to the question. The fact that there are other alternative solutions and resources does not make my comment wrong.[/QUOTE]

dojoman

sonic55 wrote: »

I have a number of comments in response:

dojoman wrote: »

sonic55 wrote: »

Some points to note:

1. Do you own your house and if so is there any equity in the property. If you go bankrupt and there is equity in the property you will likely have to either buy the equity from the trustee or allow the trustee in bankruptcy to sell the property in order to pay the creditors.

2. To go bankrupt yourself you have to do a "debtors petition". This is not cheap and will cost you over £1000, which covers the court fee and official receivers deposit. Why not just wait until a creditor (ie the bank, credit card company etc) makes you bankrupt. Wrong the cost of going BR in England and Wales is £700I acknowledge an error here. When I said £1000, I was thinking of all ancilliary costs in addition to the OR deposit and court fee.And please tell me what these costs are? because when I went BR the only fees I paid were the BR cost.

3. As to your other assets: car, clothers, furniture, tv, etc the Trustee In Bankruptcy is not allowed to sell these items. The kind of items he wants are high value items that are not essential to your daily life and "tools of the trade". If your car is very expensive and equity in it then he may want this selling. If it is old with no equity he will not require you to sell it. Here is the law:

a) Section 283(1) of the Insolvency Act set out what is in the bankruptcy estate: "all property belonging to or vested in the bankrupt at the commencement of the bankrupty..."

b) Section 283(3) of the Insolvency Act has some exemptions: "Subsection (1) does not apply to such tools, books, vehicles and other items of equipment as are necessary to the bankrupt for use personally...in his employment, business or vocation; such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his family.

So, to answer a later poster in this thread, the Trustee cannot sell personal items that are necessary to satisfy domestic needs.

4. You will get your automatic discharge from bankruptcy within 12 months, probably sooner if the official receiver is happy that nothing else needs investigating. Not guaranteed and fewer and fewer people are receiving an early discharge. Let me quote the law:

a) Section 279 (1) of the Insolvency Act 1986: "A bankrupt is discharged from bankruptcy at the end of a period of one year beginning with the date on which the bankruptcy commences"

b) Section 279 (2) of the Insolvency Act 1986: "If before the end of that period the official receiver files with the court a notice stating that investigation of the conduct and affairs of the bankrupt under section 289 is unnecessary or concluded, the bankrupt is discharged when the notice is filed.

Each bankruptcy is specific to its facts. As I said, subject to there being nothing further to investigate, the discharge will probably go through sooner than 12 months. I am not arguing the fact that ED is a possibility, but the fact is you stated that they would probably get ED. With the reduction in IS staff, we have seen fewer people being put forward for ED.

5. Rather than the CAB, you need to see an insolvency practitioner. But beware, some of them are dodgy. A good insolvency lawyer will give you a free meeting for an hour or so and give you some guidance. THIS IS DEFINITELY WRONG, THERE IS PLENTY OF FREE ADVICE SEE MY LINKS BELOW. Why is this wrong? Are you an insolvency lawyer or an insolvency practitioner? If not, you are not able to comment adversely. The free services you mention in the links are of course extremely helpful, but why discount having free advice from professionals working in this area? My comment was not wrong! What my commend did was present one solution to the question. The fact that there are other alternative solutions and resources does not make my comment wrong.[/QUOTE]I am sorry but you are definitely advising someone not to use CAB, why is this? and I stand by what I said when I think you are wrong for doing this.

alastairq

3. As to your other assets: car, clothers, furniture, tv, etc the Trustee In Bankruptcy is not allowed to sell these items. The kind of items he wants are high value items that are not essential to your daily life and "tools of the trade". If your car is very expensive and equity in it then he may want this selling. If it is old with no equity he will not require you to sell it.

Regarding a car?

Retaining ownership [interest] in one's car will depend on [1] whether the BR can argue successfully for the car to be exempt as an asset...or
[2] whether, if no exemption applied, the BR can purchase the OR's interest in the car?

Exemption reasons are covered in the stickies above....and will likely be subject to production of evidence.

If an exemption for retaining a car is applied, but the BR's car is of a value in excess of that which the OR deems appropriate, then the OR can sell the car, returning to the BR an amount to purchase a suitable car..of lower value.

If an exemption is acquired, then appropriate running costs can be included within the SOA.

If no exemption allowed, then ...if a car is retained, the running costs will have to be found from diversion of funds from elsewhere on the SOA.

If no exemption granted for a car...then ORs can and do order vehicles to be taken and funds realised....OR's having motor trade contacts who will even take cars for their scrap value....

So the vehicle's value has little to do with whether an OR will take the car or not.

What does affect the above is...whether an exemption is granted..or whether the BR can stump up the agreed purchase of interest.

Once BR is petitioned, it is not for the BR individual to have to sell assets.

This is the responsibility of the OR.


[However, the BR may well be given the opportunity to purchase the OR's interest, as above, for example]

alastairq

Regarding 'advising someone to see an 'Insolvency Practitioner?'


An IP is in business..therefore has an underlying vested interest...[perhaps why the sum of £1000 for petitioning BR was quoted? To allow for 'administrative' costs?]

It is roundly agreed this forum advocates seeking advice from the FREE debt charities....and ably assists with the completion of the relevant BR forms.

To point individuals in the direction of free, rounded advice...free, that is, from axes to grind.