Bankruptcy... is it possible to exclude debts?

arcon5

This may seem like a strange question...

but if somebody declares bankruptcy, can they declare themselves bankrupt from only certain debts and not for others which they want to keep paying off.?

Flyright

In a word, no. Although some debts are excluded from bankruptcy such as student loans. Other than similarly specific exceptions, all debts are required to be included in bankruptcy as people cannot use the process to pick and choose which debts to include.

alastairq

Hi...........I'm pretty sure there isn't a 'choice' in the matter...all [unsecured] debts fall into the bankruptcy.

what you suggest [if actually involving unsecured debt?] falls into the realms of 'preferential treatment' of a creditor.

Since, once BR is petitioned, the OR assumes responsibility for 'realising' any assets, for the benefit of creditors, then if preferential payments to one creditor are discovered, the OR has the power to obtain payment from that creditor, of all amounts paid by the BR person.

Such a situation also 'suggests' the BR individual has enough of a surplus of income to continue paying such an individual debt......surplus which should be placed into the BR estate for the benefit of other creditors?

arcon5

Ok thanks for clarifying that

arcon5

alastairq wrote: »

Hi...........I'm pretty sure there isn't a 'choice' in the matter...all [unsecured] debts fall into the bankruptcy.

what you suggest [if actually involving unsecured debt?] falls into the realms of 'preferential treatment' of a creditor.

Since, once BR is petitioned, the OR assumes responsibility for 'realising' any assets, for the benefit of creditors, then if preferential payments to one creditor are discovered, the OR has the power to obtain payment from that creditor, of all amounts paid by the BR person.

Such a situation also 'suggests' the BR individual has enough of a surplus of income to continue paying such an individual debt......surplus which should be placed into the BR estate for the benefit of other creditors?

That isn't actually the situation, its just it is a single contract/liability/debt which is making the whole debt situation unmanageable. It's also a large debt growing each month until September 2013 when the contract will come to an end. Although I see and accept the points made about preferential treatment

DVardysShadow

arcon5 wrote: »

That isn't actually the situation, its just it is a single contract/liability/debt which is making the whole debt situation unmanageable. It's also a large debt growing each month until September 2013 when the contract will come to an end. Although I see and accept the points made about preferential treatment

If everything else is manageable, with some left over, it looks like more of a cashflow issue than a bankruptcy. Perhaps a little more detail? Is it feasible to default or partially default on this debt?

arcon5

DVardysShadow wrote: »

If everything else is manageable, with some left over, it looks like more of a cashflow issue than a bankruptcy. Perhaps a little more detail? Is it feasible to default or partially default on this debt?

It's a commercial lease signed by me personally for which the business went under and im struggling to find a new tenant.

Already defaulted and the deposit utilised to cover past rent periods.

I've sought legal advise and the solicitor advised I'm going to find it impossible to get out of it. The LL isn't interested in negotiating a settlement figure and payment plan. I stand to owe this single creditor circa £17,000 + whatever other costs and interest is added so could easily break past the £20k mark if solicitors get involved.

DVardysShadow

Could you clear the lease in your own time?

I suggest to get a new tenant in at any price to mitigate your losses. If you have other debt, so much the better at this point. If the LL indicates that he may seek bankruptcy, you could offer to assign the lease as you have it - if he rejects this, he might get less by taking you down. Or if he does not threaten to take you down, you could threaten to take yourself down.

Never mind whether the LL is interested in a payment plan, just make regular payments of some amount, hopefully enough that they can see that it is better to leave you alone.

Alternatively, an IVA might be more appropriate to your situation if you feel that over time, you will be able to clear this. Not that I am an expert.