advice before bankruptcy - please

molly1412

i have been reading this forum for months and we have been putting off the inevitable - going bankrupt.

i have good days where i see it as a new start and a releif and then bad days lying awake thinking loads of questions and of the unknown (im hoping this is normal)

our plan is to go bankrupt in the new year only because we have tenants in our house (mortgaged) and we would need to give them notice and dont want them caught up in our mess.

i have a few questions and would be grateful for some much needed advice

1) we have had to live off credit for the past few months and will likely continue to do so for the remaining (although not a lot left on the card) i have been stressing that we will get in trouble for using this but we have had no other means of living we have mostly used it for food, petrol, clothes for the baby etc but whats the worst they can do for us using it up to bankruptcy?

2) what items can they take? we have no assets of real value - no house or car but we do have tv's (one of which was only purchased at xmas and we are still paying off - this was before our circumstances changed and we had to consider bankruptcy) i have an engagement ring but will they take that?

3) we rent at the moment and rent our property out do all OR tell the landlord? (ours is through an agency so i assume it would be them that they would contact)

4) lastly what is the best advice you can give someone before they go bankrupt and does anyone regret doing it

thanks again for the advice really helps at a stressful time

Ineedaname

molly1412 wrote: »

i have been reading this forum for months and we have been putting off the inevitable - going bankrupt.

i have good days where i see it as a new start and a releif and then bad days lying awake thinking loads of questions and of the unknown (im hoping this is normal) Oh, the to-ing and fro-ing in the mind is perfectly normal.

our plan is to go bankrupt in the new year only because we have tenants in our house (mortgaged) and we would need to give them notice and dont want them caught up in our mess. This is sensible as the OR would take any rental income, leaving you to not be able to pay the mortgage, so the house will probably end up being sold as a result of the BR. However, others will have more to say on this, if you wanted to move back into the house as a family home then the options for keeping it open up a bit.

i have a few questions and would be grateful for some much needed advice

1) we have had to live off credit for the past few months and will likely continue to do so for the remaining (although not a lot left on the card) i have been stressing that we will get in trouble for using this but we have had no other means of living we have mostly used it for food, petrol, clothes for the baby etc but whats the worst they can do for us using it up to bankruptcy? Is this because you have continued making minimum payments to your creditors? If you know you are going to go BR then stop paying everyone (except maybe a bit towards any utilities arrears as you need to keep them on side) and save for the BR. ORs understand that you have to be able to live, but there's no point racking up more debt by trying to keep up with repayments when you already know you're insolvent and need to go BR.

2) what items can they take? we have no assets of real value - no house or car but we do have tv's (one of which was only purchased at xmas and we are still paying off - this was before our circumstances changed and we had to consider bankruptcy) i have an engagement ring but will they take that? They will only look at high value items where they can realise a decent amount of money at auction, so if the TV is worth more than a grand then you could lose that. Good news though, you can get a FREE replacement from Freecycle! I would think it would be a very insensitive OR who would take your engagement ring off you, unless of course it is a high value asset...

3) we rent at the moment and rent our property out do all OR tell the landlord? (ours is through an agency so i assume it would be them that they would contact) By law you are entitled to have your landlord's contact details, at least a name and address. So you can put that on your BR forms instead of the agent if you like. Most landlords won't care if you've gone BR, they just want their rent! It's letting agents that set the BR clause and that's usually something to do with their insurance company's requirements. Check your contract for a BR clause and landlord details. Not all ORs contact landlords, they really just need to check what type of rental contract you have and that you are not in arrears. But it's always worth advising a landlord in advance so they hear it from you first and not the OR.

4) lastly what is the best advice you can give someone before they go bankrupt and does anyone regret doing it There's been a couple of threads recently asking just this question. I'll see if I can find them for you.

thanks again for the advice really helps at a stressful time

Recent threads to answer question 4:
Advice Before Bankrupty Please
Does Anyone Regret Going Bankrupt?

dojoman

molly1412 wrote: »

i have been reading this forum for months and we have been putting off the inevitable - going bankrupt.

i have good days where i see it as a new start and a releif and then bad days lying awake thinking loads of questions and of the unknown (im hoping this is normal)

our plan is to go bankrupt in the new year only because we have tenants in our house (mortgaged) and we would need to give them notice and dont want them caught up in our mess.

i have a few questions and would be grateful for some much needed advice

1) we have had to live off credit for the past few months and will likely continue to do so for the remaining (although not a lot left on the card) i have been stressing that we will get in trouble for using this but we have had no other means of living we have mostly used it for food, petrol, clothes for the baby etc but whats the worst they can do for us using it up to bankruptcy? As long as it is for everyday needs, you should not have a problem.

2) what items can they take? we have no assets of real value - no house or car but we do have tv's (one of which was only purchased at xmas and we are still paying off - this was before our circumstances changed and we had to consider bankruptcy) i have an engagement ring but will they take that? Don`t worry they will not take any household goods. Any items they will take are jewellery, antiques that sort of thing and even then they would have to be worth around a £1000 at an auction.

3) we rent at the moment and rent our property out do all OR tell the landlord? (ours is through an agency so i assume it would be them that they would contact) Some do and some don`t, you can always ask them no to, but it is up to he individual examiner.

4) lastly what is the best advice you can give someone before they go bankrupt and does anyone regret doing it Read, read and read again all the info you can especially on this board, forewarned is forearmed. And no I do not regret going BR as it was the last resort.

thanks again for the advice really helps at a stressful time

Hope this helps and have a look here:)

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

molly1412

ineedaname -thank you so much for your input.

with regards to using credit to live off the reason we are doing this is because we are paying the minimum off all loans and cards which amounts to over £1250 a month so we are left using the credit to live off (although they are nearly at the max) so are you saying stop paying the creditors and use that money to live off? but how long can you relaistically do that before going bankrupt as i said we dont want to do until we can give our tenant notice which means they vacate march.

tv is not worth more than £1000 but we only got in jan and still paying it so seems cheeky us keeping something that is not paid off (as i have said this was before we even contimplated anything like this)

ring is worth around £2500 but obviosuly more sentimental value but i thought that would be classed as an asset.

i think we would contact landlord before OR does - does the OR tell you if they are going to contact or not? or is there any way to avoid this - also longterm how does bankrupt go around renting lets say he does evict us how do we secure another rental propety

sheffield_soldier

They won't ask you any questions about TV's, or Rings. Unless they can see you have spent from account recently. If you have an house it will probably go, if you have a car worth of any value it will probably go but will allow you an amount for another if you relaly need one.

tigerfeet2006

molly1412 wrote: »

ineedaname -thank you so much for your input.

with regards to using credit to live off the reason we are doing this is because we are paying the minimum off all loans and cards which amounts to over £1250 a month so we are left using the credit to live off (although they are nearly at the max) so are you saying stop paying the creditors and use that money to live off? but how long can you relaistically do that before going bankrupt as i said we dont want to do until we can give our tenant notice which means they vacate march. Stop paying all that now as INAM has advised. Use it to pay for your normal household bills. Stop throwing good money after bad. You will get tons of letters and phone calls, ignore them or change your phone number. If you get a letter threatening a CCJ then ask on here and someone will explain how to deal with it. You can go years going like this.

tv is not worth more than £1000 but we only got in jan and still paying it so seems cheeky us keeping something that is not paid off (as i have said this was before we even contimplated anything like this) I very much doubt that the company will ask for this back as it won't be worth what you are paying for it. The loan will fall into your BR.

ring is worth around £2500 but obviosuly more sentimental value but i thought that would be classed as an asset. It will be classed as an asset and the OR will be interested in it. It is up to you whether you mention it if it was bought a long time ago and there is no papertrail. I will leave it to you and your conscionce (sp?)

i think we would contact landlord before OR does - does the OR tell you if they are going to contact or not? or is there any way to avoid this - also longterm how does bankrupt go around renting lets say he does evict us how do we secure another rental propety

No the OR won't generally tell you, it is just an automatic thing. The LL can't just evict you. They have to follow normal process if they want you out. So 2 months notice, which is normal anyway and can happen at any time BR or not. You will find as long as you are good tenents and pay on time and keep the property nicely then the LL won't want to get rid of you, he would be silly to do so. You are in a better position than ever as you have no debts.

Can I ask why you are renting out your house? How long have your tenents been in?

Also the court/judge will normally ask whether you have taken professional advice that bankruptcy is in your best interest. If they believe you have not taken proper or sufficient advice then your bankruptcy may be refused. There are many places and organisations that you can get advice from, but the ones that people on this board have found most useful are listed below:

Main recommended sources of help:

• Consumer Credit Counselling Service - Website: CCCS Telephone: 0800 138 1111
• National Debtline - Website: National Debtline Telephone: 0808 808 4000
• Citizens Advice Bureau - Website: Citizens Advice or visit your local CAB centre (find nearest)

Others:

• Business Debtline - Website: Business Debtline Telephone: 0800 197 6026
• Christians Against Poverty
• PayPlan
• TaxAid - Help with tax debts.

Ineedaname

If you stop paying all your debts then you can use your income to live off. Cut back on everything you can and save like crazy for the BR. You'll start receiving chasing letters and/or phonecalls but it can take months before any direct action (via Courts for instance) is taken. If you get worried then just ring up and tell them you are in the process of taking advice regarding your debts and will be in touch soon. That should put them off chasing for a while anyway.

Why can you not give your tenants notice now? Is it because they are still within a 12 month contract that ends in March?

If you don't give your tenants notice and go BR earlier then all that will happen is you'll not be able to afford the mortgage on the rented property and the OR will take the rent. Things will sort themselves out and the tenants should still be safe until notice can be given.

The TV is on HP I presume, which means if you stop paying you could lose the TV. I defer to Tigerfeet's comment above on this. When will you finish paying for it if you continue?

Section 3.1 of the Debtor's Petition asks about assets and No. 19 is "Any other property of any value, e.g. paintings, furniture or jewellery" so you should declare the engagement ring. I've not seen anyone on the board have to declare such assets yet so will defer to a more experienced member to advise what is likely to happen to your ring. Again, Tigerfeet's comment...

The OR won't always necessarily state they are going to contact a landlord, as I said above, best to prepare for it. Mine was going to and said it was just to confirm my tenancy type, when I pointed out they had a copy of my tenancy agreement submitted with my BR forms (as requested on the forms) they were happy with that and didn't contact my landlord in the end.

There's no 'way around' it as such, it just depends on the individual OR and why they want to contact the landlord. I told my landlord before I even went BR and his only concern was whether I would be able to continue paying the rent, which I reassured him I would.

NeverAgain_2

You mention 'we', so I assume there are two of you going bankrupt.

This will cost the best part of £1,500, in cash, so you need to concentrate on raising that money.