What happens with Bankruptcy

Spud312001

Hi I have gone to the citizens advice about my and my husbands debt and the lady there told us the best thing we can do is to declare ourselves bankrupt and has made an appointment with a solicitor for us. My husband has always worked but has crohns disease and it is now not responding to treatment and so he is very ill and stress is making this worse so she said as none of our debt is secured on anything this would be the quickest way to go ( our payment protection plans will not pay out due to his illness even though they told us they would when we took them out!!).

I suppose my question is what happens when you become bankrupt and will they take our car away as I need it to take him to hospital (we live in N.Ireland incase that makes a difference). How long do you remain bankrupt what way will it effect us? Any advice would be great thanks

alidadas

If you were originally told the PPI would pay out and now it wont, then you have technically been mis-sold the policy and you should be able to get it cancelled and any money you've paid towards it refunded.

If this was to happen would this improve your situation enough to avoid bankruptcy?

It may be different in NI, but you dont have to see a solicitor - are you having to pay for this? Obviously if you want to see one go ahead but it isn't necessary! I didn't see one! But again, I dont know if policy is different in NI.

Do you own your own home? If you go bankrupt there is a very high possibility that you will lose it (not always definate but pretty likely I believe)

How much is your car worth? It depends on the value - if its worth a lot they will take it but I believe they sell it then give you some to buy a new car with - would only be about £500 though I think! But it depends on how much the car is worth!

You are normally discharged from bankruptcy after a year.

It could affect you in many ways - you could lose your home, if you try and get credit after being discharged you will more than likely be charged a high interest rate or just refused credit at all. A notice will go in your local paper so family and friends may read about it!

You really need to look at whether the positives outweigh the negatives! For me bankruptcy was definately the best option for me as I basically was never going to get my debt paid off. I went bankrupt in December last year.

Look into the PPI thing as this may change your situation.

Hope this helps.

Spud312001

Thanks for that no we dont own our house and the car is worth about £2500 we will have to pay for the bankrupsy around £300 each. I did look into our pp being mis sold but was told we only had our word against theirs that they said they would cover him and so could not do much.

I am not so worried about getting credit in the future my husband has been medically retired by his doctor and I am his carer we are just going to have to make do with what we have but if this will get rid of the debt we are now never going to be able to pay and relieve some stress it would be money well spent. Thanks for you advice I feel a little more confident about it now.

tight_jock

Spud312001 wrote:

Thanks for that no we dont own our house and the car is worth about £2500 we will have to pay for the bankrupsy around £300 each. I did look into our pp being mis sold but was told we only had our word against theirs that they said they would cover him and so could not do much.

I am not so worried about getting credit in the future my husband has been medically retired by his doctor and I am his carer we are just going to have to make do with what we have but if this will get rid of the debt we are now never going to be able to pay and relieve some stress it would be money well spent. Thanks for you advice I feel a little more confident about it now.

#

Good information and advice from ali.

If your car is not a really expensive one and you need it to carry out your caring then you should not lose it. The only difficulty will be over the value of it. When a valuation is made , it should be at auction prices and should also have an agents fee of around £100 taken off

I think law in NI is the same as English law so you should be able to get free advice and support from one of the agencies - CAB CCCS Payplan etc.
We used the CAB but we were dealt with by the specialist money advisors. These advisors are employed by cab and are not the volunteers you will generally see. You must remember this is a specialist advice area.

For further advice and support , I suggest you post on the Bankruptcy and Supporters Club thread.

TJ

Sooty0404

Hi Spud
I don't know, but I suspect that you may be able to keep your car if you can prove that you need it for medical reasons. If the car is on finance they can't take it at all as it belongs to the HP company. Is it necessary for both of you to go bankrupt? If the majority of debts are in one name or another it may be better for one of you to be declared bankrupt. If the debts are equal or joint then it will probably be better for both of you to go.
Before you do anything call the CCCS (Consumer Credit Councelling Service) 0800 138 1111 or visit https://www.cccs.co.uk
This is a FREE service who may be able to help you with a debt management plan. They will calculate your income v expenditure and make an offer to your creditors on your behalf. In most cases of unsecured debt your creditors will accept the offer no matter how low it is. If you have credit card debt you will find that ALL will agree to abide by the CCCS offer.
The important thig is that that once you speak to the CCCS and are given a reference number. Quoting this number to your creditors will stop them from persuing you until they receive the CCCS offer. Once your debt management plan is in place you pay one payment each month to the CCCS who then distribute it to your creditors. You do NOTHING.
As mentioned I don't know if they cover Northern Ireland but if not I am certain they can put you in touch with the equivalent service for you region.
Whatever your course of action is - Good Luck!

br69

I declared myself bankrupt in 1998, with over £30,000 of debt. It was the best thing I ever did. We were at the stage of making a minimum repayment to one card, then withdrawing the cash to pay off another etc etc.

After my interview in Croydon they set my monthly payment towards my bankruptcy at £65, which I thought was quite reasonable. However, a solicitor friend wrote a letter on my behalf and we got that payment reduced to £30 per month!

They didn't take the car, or anything else for that matter. We lived in rented accommodation provided by my employer at the time, and had no real assets to speak of.

For somebody who doesn't own a home, and lets face it, if you don't already own a home now, with property prices at these levels you're never likely to, it really was a fantastic decision to make.

The only credit card company that tried to cause a problem was American Express, who kept passing the debt on to collection agencies who claimed that I now owed the money to them. Again, a letter from my solicitor soon stopped that.

Now, 9 years later, I have a good reputation with my local HSBC branch, several credit cards (only one of which has outstanding debt, but at 0% until next year) and several thousand pounds saved in my ISA.

I cannot reccomend bankruptcy enough.

Good luck!

jimmy_2-2

Hi Spud, as long as your car is not worth too much you will be able to keep your car for various reason. £2500 is not an expensive car, as anything too much less can be considered to be a problem car which will need money spent on it to keep it going while you are still bankrupt (i.e. when you are supposed to have no money)

You can mention in your bankruptcy that you require the car so that you can continue to work effectively (i.e shopping for and ferrying around your unwell husband). They will not have a problem with this.

Talking very broadly, whilst bankrupt you can expect to be able to live a fair lifestyle, you are not expected to live a poor life, just one that does not have too many luxuries. One thing that is always worth mentioning. Always, always put on your court documentation that you provide funding for an older family member (they dont even have to be that close, i used my girlfreinds mum), roughly £150 a month. Thsi is due to them noty being able to look after themselves fully and not having enough money to cope.

It gets rid of 150 quid that could otherwise be viewed as your creditors money.

plumduff-2

The OR should not take a car of worth less than £2500, this is in their guidleines... on top of this, you need it due to your husbands illness, so ensure the OR knows about this on the BR forms... section 13...

Did you say your in rented property..? If so, check the T&C's first to ensure no action will be taken against you by filing for BR... However, if you do not have rent arrears, the landlord should not be told anyway...

Re the costs - if you are on qualifying benefits the cost is £325, otherwise it is £475... the reduction is automatic if on JSA, income support or both tax credits... if on low income then you can apply for the reduction on court form EX160... but have to take proof of income and outgoings as it is at the courts discretion...

Rainmaker123

Spud

Given that your O/H is disabled could he get a motability car. That would not be affected by bankruptcy (if leased). a new car every 3 years and all insurance, road tax, maintenance etc. All you have to do is put fuel in it.

As for £2500 - they took the o/h's car which was worth £2000 when she declared herself bankrupt. I suspect that was down to the IP rather than any hard and fast rule. That said she was able to get a motability car so all was not lost - but just be aware it can happen.

berkybean

You can apply to the OR to keep your car.

At the time I had a G reg peugot that was nearly clapped out and had a value of a few hundred quid. I explained that although I wasn't working, my previous job was a 20 miles away and I would need a car if I was to get a similar job, as those kind of jobs (call centre work) tended to be on the outskirts of town, away from public transport.

They let me keep it, which was handy.

If you could drive something cheaper / use public transport, they might well take the car off you.

wonawin

Hi
Going bankrupt scares me as I understand that it is published in local newspaers and on a register. I would hate my family to know that I have gone bankrupt. I have been paying minimum payments on my credit cards for years paying one to pay another it has esculated to 59k have entered a DMP and I am paying 400 per month into that. I can only do this as my husband is keeping me and I have only incapacity benefit. He is not aware that I have entered into a DMP. The debts esculated after I finsihed work through ill health 10 years ago, I feel I have already done a life sentence as the debt is really all interest charged by the credit card companies.

I understand the IP visits you at your house for discusions and I wondered what sort of things they ask etc. I am in rented property and have no assets. Is bankruptsy published in local newspapers??? Please advise thanks