Considering bankrupty...

cherry_pie86

Hello, I'm 26 and have an 8month old little boy. My husband walked out just before Christmas when my son was 5months, leaving me with £150,000 mortgage, the last year of a 5 year, £5000 loan we used for the deposit, £300 store card bill for my OWN eternity ring and a £200 virgin bill that he hadn't paid and it snowballed. The house is now worth £70, 000. I struggled on by myself for a few months determined not to lose everything because of him, however I finally accepted that handing the keys back would be the best thing to do. The house needs a lot of work and my interest only mortgage was crippling me, leaving no money for repairs or even electric. I have moved home with parents and on the advice oof a financial advisor stopped paying the mortgage.

I have since moved back in with parents and stopped paynig the mortgage. The financial advisor said to leave it for the three months grace period as santander are obliged to give me that and then she will ring and say I can't pay it. I was hoping not to go bankrupt and to negotiate a fee I would repay when the shortfall has been established after the hosue is auctioned but now I;m thinking whats the point?? After looking into bankruptcy, it doesn't actualyl seem so bad. Now I am considering it, I am wondering if I should stop paying the other things I owe like the loan, which costs me £110 a month? I have been on maternity leave until this week so now I am getting a wage again I plan to save hard, at home not in a bank to have some cash put away.

I was looking into IPA's and was wondering the chances of having to pay stuff back. If I find a use for all the money will I be able to keep it? Can the touch monies like child and working tax credits? And I am considering reducing my hours nayway to part time so this would reduce my income obviously. I am wondering what they would class as reasonable living expenses, will I be allowed to pay things like car insurance, and have enough money to do grovery shopping where I want or will they be really restrictive and only let me have the bare minimum to live on? I'm guessing I would be better renting somewhere instead of living for next to nothign at my parents?

Any advice would be geratly appreciated before I bite the bullet so I can be as prepared as possible. It has been difficult for me to come to this decision, I went to university, got a good job and bought a house, all the things I planned and now it has come to this...however I know in the long run me and my son will have a better quality of life without the noose of debt around my neck, and we can make a fresh start. I am just worried my 'fresh start' will leave me penniless for the first three years of his life paying an IPA instead of the mortgage....

Anyway, thanks in advance, I aprpeciate everyone taking the time to read and reply.

IF

Hi cherry_pie86 and Welcome to the Bankruptcy (BR) Board. First step is to make a list of all your creditors, debts and assets. Secondly and most important is 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. Your BR could be refused if you have not sought advice

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• National Debtline - Website: National Debtline Telephone: 0808 808 4000
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Others:

• Business Debtline
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• Christians Against Poverty
• PayPlan
• TaxAid - Help with tax debts.

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If...x

NeverAgain_2

You have a projected shortfall of £80K+.

All but impossible to repay for most people, so bankruptcy looks a good option because it will wipe the slate clean.

As regards paying something for three years, I don't think you can complain about that, given the amount of debt you are getting rid of.

People who have had IPAs describe the budget as tight, but manageable.

Assuming you have a joint mortgage, the lender will chase your husband for the full sum after you are declared bankrupt.

What the lender does is no direct concern of yours.

Your husband may not be too chuffed about it, although he shouldn't be surprised.

alastairq

I was looking into IPA's and was wondering the chances of having to pay stuff back. If I find a use for all the money will I be able to keep it? Can the touch monies like child and working tax credits? And I am considering reducing my hours nayway to part time so this would reduce my income obviously. I am wondering what they would class as reasonable living expenses, will I be allowed to pay things like car insurance, and have enough money to do grovery shopping where I want or will they be really restrictive and only let me have the bare minimum to live on? I'm guessing I would be better renting somewhere instead of living for next to nothign at my parents?

Hi..An IPA/IPO is based upon surplus income.

Your surplus [if any] will depend upon your SOA.

Whilst the 'reasonable living expenses' are maybe not excessive, they are more realistic [generous?] than those allowed for if on benefits of some sort.

However, whilst the OR will not specify where, [and how much] can be spent on various living expenses, it will be up to the individual BR to work within those allowances.....which may exclude Fortnum & Mason.....unless they have some unmissable bargain offers on?

If you have a car...[and it is exempted as an asset...see linkies]...then you can allow for insurance, tax, MoT, servicing and repairs, fuel, etc, within your SOA. [See exemption advice?]


You may find the idea of renting a home a better option........not from the viewpoint of acquiring an IPA, but from the view that to rent somewhere you could be happy with [for a few years, anyway]...will be easier before a BR than after, considering that letting agents rely heavily on credit references. I would recommend trying to find a good landlord who is in the business...''for the long term''...rather than some flighty B2L individual who could easily get bored, or get into financial trouble themselves, which makes renting altogether an insecure pastime.


Follow the links......but also do consider what your long-term plans may be, especially with regards to mortgages in the future?