Bankruptcy advice please

bankrupt81

I apologise to begin with for what will probable be a long post and I thank you for reading it and any help you may be able to give.

I have been loking into bankruptcy for quite some time and wanted to write down my story and ask for any advice people may have with regards to it.

I owe about 8k through a debt management plan which i have been paying into for nearly 4 years plus a further 8k on credit cards which arent in the dmp. I earn £1580 a month and pay £450 towards the dmp and all the rest besides about £50 goes towards bills, rent, food, credit cards, car, petrol, saving for car repairs etc.

My husband owes around 27k all going through a dmp and is on a lower wage than me - £1250 a month and most of his creditors havent frozen the interest. he has also been paying into this for nearly 4 years. He only pays £270 towards th dmp every month and anything left over besides around £50 (we call our pocket money) goes towards rent, bills etc and helping towards payign back t he credit cards in my name (it is money we have both spent but the cards are in my name).

Well thats the background.....

We have recently got amrried and want to start a family but coming from a childhood of parents being quite poor and not having any money and dad going through bankruptcy twice I dont want that for my children. We are 31 and 33 now so dont want to leave it any longer to strat a family but feel we cant carry on with all of this debt.

I have worked out that i can pay back my debt and the credit cards in the next year and a half if we continue to struggle through as much as we are now but the worrying debt is my husbands of 27k which we dont want hanging over our heads for the next 10+ years.

We have looked into doing an iva however everytime we have enquired and researched it they always take both of our wages down and our combined outgoings (rent, bills, food) and they always come up with a left over figure of around £900 which they expect him to pay into the iva as they are obviously counting my money as well and not factoring in any of my debt.

Due to this we are now really considering bankruptcy as it is the quickest way for us to get rid of this debt and try to live our lives normally and start a family. From what I have researched, when doing a IPO through bankruptcy they tend to be more lenient than when doing an IVA an di have also found out that they only need to know my wages and my input into joint bills to ensure my husband isnt paying more than me which is fair enough. I also understand that they wont consider nay of my money as his and it wont be included in his bankruptcy.

Anyway, we have tried to talk to payplan, CAB about going bankrupt and they are both really awkward and dont really want to ehlp, they always just want us to complete these income and expenditure forms and dont want to hear about our personal reasons for wanting to go bankrupt so i we are finding it really difficult to get questiosn answered and prove that we have sought professional advice about him going bankrupt.

I just wondered what peoples thoughts are on this situation and any advice you can give as we dont want to waste any more money paying into the DMP when we could just stop those payments as of this month and proceed with going bankrupt now.

I worked out that realistically he would have a surplus income of £400 a month which they could make him pay for 3 years which is more than he is paying towards the DMP but surely £400a month for 3 years is so much better than £270 for the next 10 years probably more.

I dont erally know what i want people to say but just wanted soem support in the decision we have made and wodnered if anyone else had gone bankrupt for similar reasons and how it had gone for them?

Does bancruptcy sound like it is the best option for us given our personal circumstnaces with being desperate to start a family now without this horrid debt looming over us?

sundays

Reading your post it appears you have around 2800 nett income as a couple.
I would put up a I & E (IPA) calc that is on the sticky BR page, this will tell you roughly what the OR will allow and what you can expect in terms of a IPA for the 3 years.

The OR will assume you contribute 50 percent unless you can prove more or less, then the remainder of his income after essentials will be taken as a IPA and unless you have a massive rent from what you have said i would expect a very high IPA.

BR does work if you have little assets ie a car etc, but it can be a heart wrencher to be linked into a massive IPA.

Im not a lover of DMP because they often do fail because of the length of time you need to be committed .

kepar

but it can be a heart wrencher to be linked into a massive IPA.

Why is that?

My wife had an IPA of about £400, we managed , okay we were under the old system but we accepted and got on with it. If you want to go br you have to accept these things. My wife could have dropped her hours to cut the IPa out but she didn't and in the long run she earned promotion and a better paid job. If you have the spare why should you not pay it back. If no-one was paying an IPA the service would not run, or they may reduce allowances and even make those only receiving benefits contribute.

It is surprising that once you start paying an IPA the time moves quickly and at the end you seem to get a massive rise. You have been surviving on less then suddenly you get all this extra money. It is a great feeling.

bankrupt81

right i have done an i and e based on husbands wages and my contributions - see attached is this right the way i have filled it in - i have based everything on what we both spend and then indicated his half in the relevant column.

INCOME PAYMENTS CALCULATOR Where you see a red triangle move the cursor over the triangle for extra information/guidance, which has been updated in line with the guidance issued in December 2010 under T54-10, the Technical manual chpater 31 as updated in December 2010, the Hes which was updated January 2011. CASE NAME: COURT REFERENCE : TOTAL NUMBER OF DEPENDANTS (INC BKPT) ASSESSMENT TYPE:9. Two adults with no children BANKRUPT'S MONTHLY INCOME SOURCES£ 1 1,245 2 3 4 Total1,245 MONTHLY INCOME SOURCES FROM OTHER CONTRIBUTING HOUSEHOLD MEMBERS £ 1 835 2 3 4 Total 835 TOTAL INCOME2,080 Bankrupt's %age of Total Income60 IS THE PARTNER CONTRIBUTING AT LEAST 50% TOWARDS THE HOUSEHOLD EXPENDITURE? (Y/N)y Other sources %age of Total Income40 £Is this a shared cost?Bankrupt's Share £GuidanceReasons for allowing more Mortgage or rent600yes300Variable Council Tax110yes55Variable Gas30yes15See comment against column heading Electricity30yes15100 (see comment against heading) Other heating charges 0See comment against column heading Water24yes12£39.00 Telephone40yes2049 (landline only) Housekeeping340yes170£363.00 Travelling160yes80£210.00 Clothing80yes40£98.00 Maintenance payments 0Variable Fines 0Variable Other possible outgoings to be considered £0.00 TV licence 14yes7£12.00 All insurance26yes13Variable Dry Cleaning 0Proof Req School Meals 0N/A After School Clubs/trips 0N/A Childcare (to cover care whilst working) 0N/A Dentist10yes5Variable Prescriptions 15yes818 (approx cost of pre-pay cert) Opticians10yes5Variable Vet Bills (evidence to be provided) 0Proof Req Pet food 20yes10Proof Req Professional body membership 0Variable Hairdressers 30yes15£30.00 Holidays (UK only)60yes30£40.00 car tax mot and repairs and breakdown cover60yes30 broadband10yes5 gym/football membership30no30 Standard emergency allowance0 0£10 Per Dependent Total Outgoings1,699 865 Bankrupt's disposable income381 Percentage to be collected 100% Assessed monthly payment rate381 Assessed by: On:16-Apr-12

bankrupt81

well that didnt work - how do i upload the spreadsheet?

sundays

Kepar perhaps my choice of words were poor.

But the way i see it is the poster doesnt want to contribute to the DMP any longer and thinks BR will shift the debt easier and with that the worst that may happen is a IPA for 3 years albeit higher but a lot less in terms of the DMP.

kepar we both know the biggest question re BR is always about IPA's and sadly folk dont want to pay into them, so it will be a heart wrencher for them if they get a big one. They appear to have a high disposable income as a couple in rented accom without any children it would appear to me they will get a massive one. As we both know the OR will allow the BR very little to live on. So sadly the non BR has to be prepared to hike up more funds into the household.

I have a lot of respect for those that have paid into a IPA.

bankrupt81

Mortgage or rent600
Council Tax110
Gas30
Electricity30
Other heating charges
Water24
Telephone40
Housekeeping340
Travelling160
Clothing80
Maintenance paymentsFines
Other possible outgoings to be consideredTV licence 14
All insurance26
Dentist10
Prescriptions 15
Opticians10
Vet Bills (evidence to be provided)
Pet food 20
Professional body membership
Hairdressers 30
Holidays (UK only)60
car tax mot and repairs and breakdown cover60
broadband10
gym/football membership30
Standard emergency allowance0

so that is all of our outgoings - i pay exactly half towards all of it besides football (which i gather he wont be allowed anyway) so the household income is:
Husbands wages: £1245
My contributions to household: £835

Total - £2080

Total outgoings: £1669
Husbands share: £865

Bankrupts disposable income: £381

Have I done this right?

sundays

bankrupt81 wrote: »

well that didnt work - how do i upload the spreadsheet?

i had the same difficulty, but until someone says, it should give you a indication of what is allowed and what is not. and that should then tell you the IPA that is taken. it percentages out his share on everything etc.
It acurate as well as what you can have or not , dont assume a massive rent will be allowed if you can live cheaper.

bankrupt81

sundays wrote: »

Kepar perhaps my choice of words were poor.

But the way i see it is the poster doesnt want to contribute to the DMP any longer and thinks BR will shift the debt easier and with that the worst that may happen is a IPA for 3 years albeit higher but a lot less in terms of the DMP.

kepar we both know the biggest question re BR is always about IPA's and sadly folk dont want to pay into them, so it will be a heart wrencher for them if they get a big one. They appear to have a high disposable income as a couple in rented accom without any children it would appear to me they will get a massive one. As we both know the OR will allow the BR very little to live on. So sadly the non BR has to be prepared to hike up more funds into the household.

I have a lot of respect for those that have paid into a IPA.

In response - yes it would just be husband doing the bankruptcy, i would continue to do the DMP i have and pay off the other credit cards in my name which totals all of my wages spent on joint houselhold bills and my own debts. From what I understand - the only reason they need to look at my wages and my contributions is to ensure that i am paying equally into the joint household things which i am and my husband isnt paying all the bills while i dont pay anything. From the research i have done i understood that my wages would not be considered for his bankruptcy apart from for this reason- is this correct?

NeverAgain_2

bankrupt81 wrote: »

In response - yes it would just be husband doing the bankruptcy, i would continue to do the DMP i have and pay off the other credit cards in my name which totals all of my wages spent on joint houselhold bills and my own debts. From what I understand - the only reason they need to look at my wages and my contributions is to ensure that i am paying equally into the joint household things which i am and my husband isnt paying all the bills while i dont pay anything. From the research i have done i understood that my wages would not be considered for his bankruptcy apart from for this reason- is this correct?

I think that's about right, assuming none of your husband's debts are joint or linked to you in any way.

His creditors will want to get their hands on your juicy salary if they can, so it might be a bumpy ride.

You also owe a fair bit.

Have you considered bankruptcy as well?

If you both went bankrupt it would simplify things and give you both some certainty as to where you stand for the next year or three.

sundays

Why are you in a DMP and then repaying for additional credit cards, i thought all should be lumped into one, are you paying your DMP via a fee paying one or the recommended debt charities. Not putting all credit into the DMP i understood to be a breach of a DMP.

IPA's can be complex but the way i see it is , the person going BR must declare all the household income/expenses inc your wages, if he doesnt the OR will assume you contribute 50 percent to the household costs and will use that 50 percent contribution against him.

EG he tells them he earns 1250 but wont say what your earnings are.
He tells them the household costs are 1000 pcm, the OR will assume you pay 500 , that would leave him 750 surplus. and all but 20 pound is now taken by the OR in terms of surplus.
You are not under examination by the OR and there are many couples that actually do not share there financial details with each other, but the OR will assume unless other wise proven that you are more or less equal, the difference would be and more helpful to him is if he was the bigger earner and higher contributor but he isnt , your the higher earner so the percentages will be higher for you , the end answer is he will be allowed the permitted amounts only and the rest will go to the OR. If you chose to pay more for stuff that will have to come out of your earnings.

So the IPA calculator allows you to put both your details in combined , it will percentage your share to the household.

you then put in the amounts paid ie rent, ctax, gas ,elec water etc and whether they are joint costs or not. the ipa calc tells you what the OR allows for, i could see that you were above holidays, clothing, and pet food for a start off without going into detail.