Spending money beofer Bankruptcy

Need2Know_2

Further to my other post, we have decided that unless we can get our creditors to take settlement figures after we have sold our house we are going to need to go bankrupt.

Trouble is , we are thinking that this whole selling and finding somewhere to rent process is going to take about 6 months and we are now paranoid about what we can spend on day to day living until then. Obviously we are still living of some credit at the moment and still need to purchase things and when we move house we need to be able to take into account moving costs etc. We are terrified that it will be seen as underhanded and we will have a restriction placed on us.

We are not trying to fleece anyone but we need to live ( not extravagantly) but I mean , days out, repairing stuff if it fixes , moving costs when it arises, buying summer clothes for my daughter ( she is one).

What happens when we declare BR, will they ask us why we spent all these things, or should we just not buy/do anything for 6 months until we declare ourselves BR???

So confused and I think I am losing my sanity.. dont want to do anything wrong, but need to live

Would really appreciate someones advice who has been there...

sweeper12

Hi there

As you say in your post, you have to live. If the only way of doing the essentials is by using credit, then that is what you'll have to do. I don't mean that in a blase way but many people - myself included - have been or are in the same position. I would say that restrictions are put on people who have deliberately gone out with the intention of having a big blow out on their cards, buying extravagant things such as designer clothes, plasma tv's etc. The bankruptcy process does involve an interview with the OR as to how you got into the position you are in but in my experience, if you are honest with them and explain your situation, they will see the bigger picture. I hope that helps

Need2Know_2

Thankyou for your reply.

I guess I will just carry on as normal, I mean most of our debt is accrued though rennovating our house ( unforseen) andconsolidation of my H previous debts so its not like we are lavish spenders, however if we wanted to have a meal for our anniversary or buy some new bed linen ( I ruined our old set in wash) I am scared that it will look bad and I cant even imagine how I will feel if I m asked why I bought them?


Does/will the OR ask for statements and pick at things you have bought, oer what period of time do they do this for? ie how far back?

allofadither

Need2Know wrote: »

Thankyou for your reply.

I guess I will just carry on as normal, I mean most of our debt is accrued though rennovating our house ( unforseen) andconsolidation of my H previous debts so its not like we are lavish spenders, however if we wanted to have a meal for our anniversary or buy some new bed linen ( I ruined our old set in wash) I am scared that it will look bad and I cant even imagine how I will feel if I m asked why I bought them?


Does/will the OR ask for statements and pick at things you have bought, oer what period of time do they do this for? ie how far back?

I have my OR interview next week and have been asked to send 12 months bank statements etc. I understand they can look further back than that if they so wish, and get any and all information they want from the banks/creditors if you don't have it. How far they go back probably depends I think, on each individuals financial affairs.

Yes, thay can ask about specific purchases if the amount in question is a large sum of money (I had a similar panic myself, but when I looked over my statements I realised all our money was spent keeping Tesco and Asda in business).

You have to be honest with the OR if they ask about things, but if your purchases are legitimate and not overly execessive then you have nothing to worry about. Easier said than done, I know, but I think most people find they have not actually been living an extravagant lifestyle or been particualrly reckless. That's not how I got into debt anyway.

Hope this helps, but there are others on here with more knowledge and experience than myself who will probably be able to help you somemore.

sweeper12

Hiya

Things like bed linen are essentials and that will not look bad. I don't think having a meal is going to get you a BRO either. As you are only considering BR at the moment - hopefully you will get an agreement on settlement figures - you are not exactly cramming loads of debt onto cards before doing the deed and therefore not trying to scam your way into loads of luxuries. I think the OR usually go through statements that go back up to a year and these will be provided to them if they request them from your creditors. On your initial banruptcy forms, you will be asked to provide amounts that you owe but if you don't know all of them don't worry because the OR can easily find out. Don't worry about them being picky, like I say, it's only luxury items or expensive cruises for example, that stick out to them - things that you knew you shouldn't really be buying or huge gambling debts.

Need2Know_2

Thanks , its really helpful to hear your replies. Its such a worry as we really dont want to start annoying the wrong people. This board is really helping me save my sanity at the moment. This really is a big deal and we want to make sure we cover every aspect before heading down the last route (BR)

I am also worried ( born worrier) that I am due to start college in September and my daughter needs to go into nursery, will they allow me to pay her fees? and I also was going to buy a laptop for my studying, should I not do this now as I guess that is lavish spending. Im so worried that the odd purchases we would have bought from time to time, like for instance a bbq for summer will look dodgy and I am worrying myself sick with this now....

sweeper12

Hiya

It's very normal to be worried sick as I imagine everyone on this board has been through the same emotions - I know I certainly have and I nearly fell to pieces but things are now a bit better. Your daughter will, of course, need child care and the reason for your college course is to further educate yourself which is not exactly a luxury but a step up. Things like this are covered when you fill in your statement of affairs for the OR which is basically showing your living costs and childcare is perfectly ok. I'm sorry but I'm not sure about the laptop but maybe someone else on the board might be able to advise. I really wouldn't worry about your previous purchases, although I'm sure each of us has done the same. I think they really do only look for anything "suspicious" as in stuff that's worth a lot of money - think Rembrandt for example, expensive purchases..............

Richard_S

Need2Know wrote: »

Thanks , its really helpful to hear your replies. Its such a worry as we really dont want to start annoying the wrong people. This board is really helping me save my sanity at the moment. This really is a big deal and we want to make sure we cover every aspect before heading down the last route (BR)

I am also worried ( born worrier) that I am due to start college in September and my daughter needs to go into nursery, will they allow me to pay her fees? and I also was going to buy a laptop for my studying, should I not do this now as I guess that is lavish spending. Im so worried that the odd purchases we would have bought from time to time, like for instance a bbq for summer will look dodgy and I am worrying myself sick with this now....

Hi Need2know,

If you're starting college in September then your nursery fees will be seen as spending that is essential to your education and ultimately getting back into the work place, so it won't be a problem.

I would buy the lap top now because it won't pose any particularly difficult questions with your interview but it may be more difficult to make a case for buying it after your bky date. Things like the BBQ won't even be mentioned; relax and enjoy yourself and you really will wonder what the h3ll you were worrying about when it's all over.

Richard

Need2Know_2

sweeper12 wrote: »

Hiya

It's very normal to be worried sick as I imagine everyone on this board has been through the same emotions - I know I certainly have and I nearly fell to pieces but things are now a bit better. Your daughter will, of course, need child care and the reason for your college course is to further educate yourself which is not exactly a luxury but a step up. Things like this are covered when you fill in your statement of affairs for the OR which is basically showing your living costs and childcare is perfectly ok. I'm sorry but I'm not sure about the laptop but maybe someone else on the board might be able to advise. I really wouldn't worry about your previous purchases, although I'm sure each of us has done the same. I think they really do only look for anything "suspicious" as in stuff that's worth a lot of money - think Rembrandt for example, expensive purchases..............

Whats Rembrandt? ... sorry Im being thick??

Rich- thanks, I will try not to worry too much. Incidentally have been looking at my bank statements and its mostly food shopping and luches with my LO, I have also found a couple of trasnactions I know nothing about!!!!


Mnmmm may try and ring the bank now

I really appreciate everyones answers and hope I can do they same for someone else one day, no doubt I will be posting more in the coming months though:p

gettingitsorted

Rembrant was a famous artist his paintings are worth a mint

Richard_S

gettingitsorted wrote: »

Rembrant was a famous artist his paintings are worth a mint

Mmmm, me thinks gis could have her own private art collection; very knowledgeable, I thought Rembrant was a tooth whitening agent