Your Advice Needed Please...

PHM12

Hi There...I have been looking through these forums for many a year, using the valuble advice that is given, but have never wrote anything myself....till now.

I have been struggling financially for a while now, and my circumstances have taken a dramatic turn....as in I am a single parent with 2 young children, and have had to give up work too.

I have around £30k in debts, 2 CCJ's. I own my own home, which is in negative equity (based on house prices locally...I have not had a valuation done).

I have spoken to CAB and CCCS, and they given me some advice, most of which I have already done...ie Income/Expenditure, and writing to Creditors to make offers.

All of which have agreed....apart from one. This has recently resulted in the obtainging a CCJ in Feb this year. I asked for a re-determination, and it was transferred to my local court, which maintained the payments at an amount I could not afford. I then submitted a N245 form with fee, and today received a letter asking for the full payment forthwith!!

I rang the court, and they advised me that the creditor had declined my offer, and that i could write to the court and explain my financial circumstances...which is also what CCCS advised.

I was in the process of doing this, and looking on here for help, and came across a thread similar, whereby a point was made that maybe the Court thought that applying for Bankruptcy would be best.

So...my query is..what do you suggest/advise?

I know that this is not a route to go down on a whim, and there are consequences...ie losing my home...I just dont know what to do, who to turn to, and what is best.

My other query is, that I received a back paid Maternity Allowance payment from work at the end of March. I put some aside, to cover 3 months Mortgage and day to day living for a few months (£2,000) and have also bought beds for myself and children, plus some decorating.

I am assuming that if I applied for Bankruptcy, then after fees deducted, this would be taken to pay back debts. I had thought about using this for that purpose, but then I read that this might be seen as bad if I did this...so even more confused.

Any advice would be so welcome.
Thank you

Gimpsdad

In bankruptcy you lose control of your assets, so in theory you could lose your house. BUT, it isn't your house if it is owned by the mortgage company and there is no equity that you own. If you were to declare bankruptcy, it does not necessarily follow that you would lose the house therefore.

You could fund the BR with your lump sum, and yes, you may lose the rest. The danger comes in the policy of the OR's office that they will hang on to beneficial interest in a property for 2 years and 3 months. As they have to deal with the property in 3 years or lose the right to do so, 2 yrs and 3 months is the current benchmark. If the equity builds up in the meantime, you may lose the house as they can force a sale to return money for the estate. In better news, the OR can accept an offer to buy out the beneficial interest in the property for any reasonable offer that may be deemed to be in the best interests of the estate. You used to be able to buy it for £1, but not any more, you may have to pay maybe a few hundred pounds plus legal fees (it has to be 3rd party funded, so maybe a family member). If it is in serious negative equity, like as not the offer will be accepted, the property will then be returned to you and he has no more call on it.

It is your call, but if you have nothing in the property, even if you do lose it (unlikely, but not impossible) you have lost nothing except the rest of your debts as you didn't own it anyway.

fatbelly

Gimpsdad has explained this well. It's a bit of a risk because no-one can predict how house prices will move over the next two years. However, they're not going anywhere at the minute.

Regarding the lump sum, you will probably need £700 for the bankruptcy fees (unless you can get remission for £175 of that) and it's going to take a bit of time to get the forms completed and a court date booked.

So if you are going to do it, now sounds like a good time, particularly with a defaulted ccj in the background.

PHM12

Thanks for the great advice. I have spoken again with CCCS, and they have advised me to contact the court and apply for a redetermination on the Forthwith order. I also had a deficit in my budget, and was advised that I wouldnt be able to apply for bankruptycy, until this balanced. So we took out even more essentials, and it now does. So this is the avenue they have suggested. The only potential issue is, that as my budget is the very very basic....with only the minimum food allowance, transport and nothing else. That when/if I am entitled to any help down the line with Mortgage interest payments, then this will present around £300 surplus...which the OR may decide to use towards debts. So, do i start the ball rolling now...or wait until I this is sorted (could be 13 weeks or more). I am not wanting budgets for any extravagence....just bit more food, clothing, school trips, pocket money etc.. If i wait, the Creditor may apply for a Charging Order on the property. There is probably a negative equity, I am concerned is because it is our family home and I have two children...

I hardly slept last night...

Gimpsdad

Can't apply for BR as there is a deficit in your budget? What nonsense, that is the very time you SHOULD be applying for bankruptcy as it follows that you will not be subject to an Income Payment Arrangement or Order when you have no money to pay it with.

The OR is not to be frightened of, they do not exist to punish debtors by making them live on nothing. Go over your budget again, or post a SOA on here that CCCS have prepared for you and I am sure the posters will maybe give you some helpful tips on it.

PHM12

Thanks again Gimpsdad....

Thats what I thought!!? Here is the SOA that the CCCS have prepared:

Income - monthly
IS £308
CB £146
CTC £490
CS £80
Total £1,024

The above are estimates (apart from CB & CS, as I am waiting to hear about my entitlement)

Outgoings - monthly

Mortgage £427
Water £29
Gas & Elec £80
Contents Ins £28
Telephone/mobile/internet £48
TV licence $13
CCJ's (1 @ £14,000 & 1 @£6950) £2
Life Ins £10
Road Tax £20
Service/Repairs £ 15
Car Ins £27
Petrol £60
School Bus £44 (I have prev applied for help with this, but told out of the area, and so not eligble)
Food/toiletries/cleaning £200
HMRC overpayment £10
Total £1,014.
This is for 1 adult and 2 Children

I have 10 creditors, total unsecured debt of £13,016...all of which are being paid £1 per month.

My home is prob in negative equity (this is based on my outstanding balance & other properties in the area)

I have an old car, valued at around £500. No other assets.

I am told that I may also be eligble for help with my Mortgage Interest, which they estimated to be around £375 per month. Although there is at least a 13 week waiting period for this.

Should I start the BR process now? Will the OR allow me to increase my outgoings at a later date, to one more realistic?

Thank you so much for any help....

PHM12

PS....I was previously working until last week, but have had to resign due to childcare. I seperated from my partner in Feb this year, and carried on as long as I could. I am hoping to go to College in Sept. The house and all the debts are in my name alone.

Chrisblue1962

Hi, I too am on a DMP and one of my creditors, Nationwide, went down the CCJ / Charging Order path but the likelyhood of Charging Orders being enforced is very rare, as long as you maintain payments.

Given that you have children in the household, I would be extremely surprised if your creditor tried to enforce a Charging Order.

Charging Orders are usually used to turn an unsecured debt into a secured debt.

Are you getting child maintenance from the children's father..or is this the "CS £80.00" item?

Can you not cut down on the "telephone/mobile / internet - £48.00" ?

Good Luck

dancingfairy

A charging order is basically like a security blanket for the creditor - it basically means when you decide to sell the house then they will get first shot (or maybe second shot after the mortgage?) at any proceeds. It does not mean they will take your house. They really arn't going to throw you and yourchildren on the streets - this really isn't going to happen.
df

dancingfairy

Bankruptcy will be done and dusted a lot quicker but obviously will make some things more difficult for you in future - re careers etc (you won't be able to be an accoutant/lawyer/local councillor etc) and you will struglle to get a 'normal' bank account with things like an overdraft etc and will struggle to be able to buy another house but none of these things are insummountable.
Why not head over to the bankrupty board on here and find out the pros and cons of going bankrupt then you can make a proper decision.
All the best.
df

Gimpsdad

Ok.

Let me make it clear. RIP UP THAT SOA AS IT IS PATHETIC. This is not a dig at you, you have been advised on this by a creditor funded organisation whose motto seems to be cut back everywhere to pay creditors back. This situation isn't your fault, but you have a responsibility to your children, not credit companies.

"Can you not cut down on £48 for telephone mobile and internet?" This would be viewed as very reasonable by the OR, so why should you? You have a £200 allowance for food for you and 2 small children. That is £46.15 per week on shopping, including toiletries and cleaning. Where is your clothing allowance? Where is the money you need for school trips, contingency for emergencies? Why are your CCJ's in your SOA? They would be wiped by your bankruptcy, although as it stands you do still have to pay them until you actually do it. CCCS should know that, and that SOA would not pass 1st base with the OR.

Shameful, absolutely shameful. It also won't matter whether you do get help with the mortgage, and I hope you do by the way, as the law states that if you go bankrupt you will NOT be subject to an IPO or IPA as your income is made up entirely of benefits.

Do you have any plans to be a local councillor/trustee of a reg charity/company director? Do you want a bank account with an overdraft? You already have a mortgage and probably won't lose your house, so are you bothered at this time about your next mortgage? Even if you do lose it, we already know you have actually lost nothing that is yours at the moment anyway, so are you bothered about your next mortgage at all? Only you can answer these questions.

I still can't tell you to go bankrupt, that is your choice, but I can make an exceptionally strong case for it. I cannot make any sort of case for listening to those that have creditors interests at heart.

PS, I think the CCCS representatives that post on this forum should look at this thread, have a look at that SOA and post in public why they would be happy to present such a piece of garbage.