when to stop paying

molly1412

hi all,

we have finally decided that we are going to go bankrupt (after months of heartache and discussions - and reading this fantastic forum)

we cannot do this until march as we have tenants in our property and i feel its only fair to not drag them in and to give them notice to vacate then we intend on sending the keys back to the lender for vol repo (we are already in rented accommodation)

i wondered when do we stop paying bills? i am worried that we have christmas coming up and would like to not stress for one month and although we intended on struggling to pay c/c etc up until early next year the reason being is we recently got PPI claim back £5000 but paid to my parents as they had loaned us £15,000 beginning of year towards debts on the proviso we paid with husband bonus (which he now no longer getting hence why we are in this positon) and i am really worried that they will do to us its stressing me more than anything. ahh sorry to go on but i am so worried that OR will give us in to so much trouble we have also went on holiday this year (again before we thought we would ever have to face bankruptcy) but i worry that they are going to think we have planned this all along which is really not the case we are mortified that we have to look at bankruptcy and it really is a last resort.

does anyone have any advice or recommendations with what/how we intend on doing things? and how long can we not pay creditors and use that money to live off (fuel & food etc) also whats the worst that can happen to us? thanks

Chuckie1998

Just be aware that if you have paid someone back money borrowed, even your family, this will be frowned upon by the OR. Basically you have favoured one creditor over another. Also if you have been spending money that you had on holidays etc, then planned to go BR afterwards, this won't help. The OR will see your bank accounts, and you have to justify all your spending. Spending a PPI claim then going BR could be a problem' evan if paid to a family member.

dancingfairy

what is the position with the tenants? can you exercise a break point to get them out any earlier? HOw much do you owe to your creditors and what is the situation with them? ie have you missed any payments yet, have they threatend or initiated court action yet? If you owe each creditor a small amount then they might not decide it's worth making you bankrupt.
The problem I can see is that you have recently paid 5000 to your parents - you need to tread carefully as it may look like you have favoured them over other creditors and the OR may demand that money back from them.
The holiday is probably a non -issue unless you went mad and spent a fortune but if you honestly did not expect to have to go bakrupt then it's probably o.k.
Christmas - well if you spend a reasonable amount that's onething - if you go way over the top and buy it all on credit knowing you can't afford it then that's a different thing altogether.
Have you explored all the other options available to you with a debt charity etc? The biggest problem I can see at the moment is the payment to your parents.
Best of Luck
df

molly1412

hi thanks for the responses

firstly the holiday and other "luxuries" as they may be called this year was before our curcumstances changed (husband lost job and illness in the family) this was unforeseen and at the time of going on holiday and using credit we had never missed a payment and had always intended on paying cc back at year end when OH was due large bonus £15,000 but due to losing his job this did not happen and things have spiralled out of control very quickly. we have alwasy used credit but have a history of paying this off. with the PPI surely if we are not going bankrupt until next year and still paying all the other creditors how can this be seen as favoring one and also what about people that do not research but find them selves unempolyed etc and have to look at bankruptcy its not always a plan as such. what is the punishment for these people becuase unless i came across this site i would never have known that was "favoring a creditor"

already stressing me out so much, we owe in total around £40,000 on loans and C/C but then will have shortfall of £30,000 on negative equity.

will they demand the money back of my parents even if there an audit trail that they used their money at the begining of the year to pay some debtors on the proviso it was paid back why should they be put in debt due to our circumstances would this be the same if we paid of loans etc which we have done in the past. what will OR do or say we really dont want to disclose this to our parents as this will make matters worse.

thanks again

wildheart83

The £5000 you got in PPI wasn't spread equally amongst your creditors, it was paid to one creditor hence why you could be in trouble for this. They can ask your parents for the money back, and it's almost certain that they'll write to your parents to ask for this money back so hiding it from your parents will be a no go.

However, if they don't have it then they don't have it. There's not a lot anyone can do about that, but they will ask for it.

System

Although I haven't yet gone through BR, we have a friend who works in the insolvency service (government) and we asked them about this. What they said was that unless you've shown real recklessness they're not going really do much. If you paid off a creditor knowing you were about to go BR then they wont be impressed but that doesn't sound like the case here. If you have reasons and explanations for "luxuries" and certain situations then just tell the truth. They wont shout at you. They're about finding the reasons behind the BR, not punishing you. That's not to say they wont question you in-depth about things, so just have all your info to hand.

No doubt someone will post back saying they got interrogated in dark room for 10 hours, but I'm just relaying what I've been told by someone who works with this every day.

Ineedaname

I think I posted in your previous thread that you could go BR sooner than March and your tenants should still be OK until the end of their contract. The reason being that it can take months for mortgage lenders to repossess a property, in the meantime, with you having gone BR, the rent would go to the OR.

I wouldn't worry too much about your tenants, they'll have plenty of notice to move out of the property whatever happens. Just focus on what you need to do to sort out your own finances.