Help with Bankruptcy please....

missangel_2

Hi,

I have used this forum before and received so much help regarding a debt management plan so wanted to get the forum's advice on bankruptsy.

I have been on a debt management plan with Payplan since 2009. My debt total's £34,000.00 and at the moment I am paying £220 per month to 5 creditors. I have no assets, ie no house/mortgage, car etc. I have always rented and have a full time job. I have been advised by a financial friend to go bankrupt which I am seriously considering. I have been looking at the forum for pros and cons but am finding it very difficult to gage what is best.

This debt has been hanging over me for many years and being 42 years old it will be a very long time before it is paid off. Plus I'm not sure how long I can keep up these monthly payments of £220 especially if there are any changes in my job situation.

I guess what I'm asking is how does bankruptsy work and how long does it take to be debt free? Will it affect me renting a flat in the future? how much will it cost to make happen etc?

Any help would be greatly appreciated.

Thanks

IF

Hi missangel, Contact one of the following debt charities. Please try these they don't charge and are impartial. They will go through all your options with you and if they suggest bankruptcy then come back to this board and we will help you all we can. Also if your not ‘clicking’ with one of the Debt charities do try another. We advise you to try at least two for your own piece of mind.

Please don’t do anything rash take your time and weigh up your options and read everything you can x

For ‘essential’ BR info this is Fermi’s sticky - Click here

Main recommended sources of help:

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

Others:

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

And do remember we’ve all been through this and anything you don’t understand don’t be afraid to ask.

Best wishes
If...x

SouthCoast

I have been looking at the forum for pros and cons but am finding it very difficult to gage what is best.

Some pros and cons can be found here:

http://www.adviceguide.org.uk/index/your_money/money_management_index_ew/help_with_debt_index_ew/bankruptcy.htm

sundays

In short always get advce , ind to the forum.

but my advice is this:

1. Renting could be problematic as you will be a BR so may face refusual for a long time because of your failed credit history but IMo being in a DMP does not make it any better.

2. If you work , you could lose assets such as cars and wont be able as the norm to get further credit ie finance towards a car.

3. You could end up with a IPA which is what you pay back for three years if you have surplus income. The OR will determine acceptable costs ie rent , bills etc then any surplus can be taken and paid back to your creditors.

4. BR lasts 12 months.

andrew2011

Missangel, I was in a very similar situation. Similar debt, age, no assets, always rented etc.

From my experience-

First thing to check - will your job be affected by Bankruptcy. It's unlikely, but find out best you can anyway (do you work in finance in any way?)

Second thing to take into account - your landlord might be informed about your BR, and is within his rights to kick you out, after which you might find it difficult to rent again. If you do decide to go bankrupt you can either discuss it upfront with your landlord, or say nothing and hope for the best. Either way make sure you have a "Plan B" so you're not homeless! (friends, family, whatever).

Apart from that, I would definitely advise you to take the plunge. You are paying a heck of a lot there, it sounds like a struggle.

Your entire debt is written off on the day in court, as soon as the judge signs the papers.

If you are in a DMP your credit score is shot anyway, so that's not really a problem.

It currently costs £700 to go BR (though there are discounts if you are eligible, see the stickies on here).

Bear in mind I'm not a debt counsellor, and only speaking from raw experience!! I was with Payplan once - they were great to me, and they do have a BR advice team - speak to them.

Ineedaname

andrew2011 wrote: »

Second thing to take into account - your landlord might be informed about your BR, and is within his rights to kick you out, after which you might find it difficult to rent again. If you do decide to go bankrupt you can either discuss it upfront with your landlord, or say nothing and hope for the best. Either way make sure you have a "Plan B" so you're not homeless! (friends, family, whatever).

Not necesarily so as it depends on several factors. If there is no BR clause in the tenancy agreement then there would be no breach of contract. As long as the landlord is assured by the BR that rental payments will not be affected they would then have no reason to kick the tenant out.

It tends to be letting agents that avoid BR tenants and the tenancy agreements they draw up that include a BR clause, in part I believe due to agency insurance terms.

Most landlords just want to know the rent will be paid and the property looked after. Long term tenants are the best as that avoids costs of advertising and re-renting the property and potential voids where the property is empty.

Even if you rent via an agent, you are entitled by law to have access to your landlord's details. You can then advise the landlord of the BR (to forewarn them of potential OR contact) rather than the agent. You can also give the OR the landlord's direct details instead of the agent. If the agent then finds out about the BR and suggests to the landlord the tenant should be booted out, hopefully the landlord would be on the tenant's side - wanting continuity of rental income and also having experienced a responsible and honest tenant.

andrew2011

Thanks for adding more detail to that INAN.

I totally agree with your last paragraph about being up-front with the landlord (directly, not through the agent!) if you think it might work. But if your BR is straightforward, there is every chance the landlord won't even find out about the BR. It's something to weigh up according to your situation and gut feeling.

But either way, there is a chance of losing your home. Almost all tenancy agreements have a BR / Debt clause, even the off-the-shelf ones from the Post Office that people use for sub-letting.

And it can be very difficult to find a new rental property if you are bankrupt. Hardly any agents will touch you, even with guarantors.

There's every chance of keeping your home. But best to have a plan B in case the worst happens.

Ineedaname

Andrew, I see your point but a lot of landlords who use the off the shelf agreements do so to avoid having to prepare their own and to know they are protected with a standard agreement. They're generally not worried about some of the clauses.

My tenancy agreement is an off the shelf and has the standard 'no subletting' clause. My landlord is happy for me to sublet if it means he gets to keep a good tenant and has written me a letter to confirm his permission. EDIT: I've just checked it and there's no BR clause - although it is nearly 4 years old.

My BR was straight forward but the OR still wanted to contact my landlord, as with a lot of things this varies across the OR offices, some contact, some don't.

But I do agree with you, renting with BR on your records is difficult, however, being proactive can often avoid the need to move. As said above, landlords want long term tenants, whereas agents make their money from changing activity.

Sundays - It is the tenant's legal right to have landlord's details and contact them direct if they need to. It is the landlord who has the final say in who lives in their property, not the agent.

I am aware of Section 21 - but an agent is more likely to issue that for BR than a landlord. As above, agents make money from changing tenants, landlords just want continuity of rent with no voids!

dojoman

andrew2011 wrote: »

Thanks for adding more detail to that INAN.

I totally agree with your last paragraph about being up-front with the landlord (directly, not through the agent!) if you think it might work. But if your BR is straightforward, there is every chance the landlord won't even find out about the BR. It's something to weigh up according to your situation and gut feeling.

But either way, there is a chance of losing your home. Almost all tenancy agreements have a BR / Debt clause, even the off-the-shelf ones from the Post Office that people use for sub-letting.

And it can be very difficult to find a new rental property if you are bankrupt. Hardly any agents will touch you, even with guarantors.

There's every chance of keeping your home. But best to have a plan B in case the worst happens.

No they don`t none of mine have had any clause about BR in them.

debtinfo

I think I would define it as more difficult rather than very difficult, after all many of the people who post on here have rentals

alastairq

Some of the difficulty of renting once BR comes from the way an agency guarantees the 6 month's rent to a LL via an AST lease.

The result often being, a demand for up to 6 months rent in advance.....or, a hefty guarantee...

Regarding contacting a LL direct?

This may be a wise move....agency fees will be paid regardless of how the tenant is chosen...sometimes, if there is competition for a lease, negotiating directly with a LL for, as an example, a 12 month guarantee lease rather than 6 months could be a clincher.

[12 months of guaranteed income being better than 6?]

My lease has no mention of BR....and it really only becomes an issue if rent is owed.

Hence, I do advise, if BR is seen as an option looming, then along with other preparations, establishing a rented home beforehand can result in less ..or zero, hassle.

Always remember,as a tenant, one is actually paying for a service...no harm in trying to negotiate a better deal?