Personal Bankruptcy ...

gbcarter

My wife and I have finally decided to declare ourselves bankrupt after five years of debt and illness.

We are ready, almost to visit the County Court and Official Receiver but have been stopped by 'Money Saving Expert' as we are hoping to reclaim thousands of pounds from our two banks due to incurred excessive charges over the past five years.

Should we go bankrupt now, or will the Official Receiver 'snatch' the £5,000+ refund? If we declare ourselves bankrupt obviously the bank accounts will be frozen and we assume that the asset of the refund will be lost to the Official Receiver, and quite frankly we need the money!

My wife and I are both ill - my wife recovering from cancer and depression, and I have a rare condition known as insulinoma, so neither of us are working and we can only claim benefit for my wife - not me, so financially times are tuff ...

Comments from anyone with similar circumstances appreciated - Thanks

makingendsmeet_2

If you claim and get paid put that amount of money before you bankruptcy and don't pay most it to your creditors, you will end up with a bankruptcy restriction order (bro). If you get the money paid out whilst you are in bankruptcy it will be class as a windfall and the OR will want the money from you to pay your creditors.

Bestthingsinlifearefree

Hi GB,

I don't know the answer to your qu, but just wanted to say welcome to MSE :beer: and I hope better times are ahead for you and your wife.

Try to be as positive as you can at what no doubt is a stressful time.

I wish you well.

Best,

NekoZombie

Hi gbcarter

as makingendsmeet says, there in no real way you'll get to keep the money either way. If you do get it before declaring bankruptcy, you will need to make sure your creditors each get a pro-rated proportion of your windfall. If it looks like you favour one creditor over another, the OR may ask for that money back in order to redistribute it fairly. Certainly, you won't be able to spend it on a new car or a holiday, for example.

If you declare bankruptcy now, you can continue the process to get your charges back, but all the money will go to the OR. In some ways, this should look good as you are clearly trying to bring in as much money as possible to share amongst your creditors. If bankruptcy really is the route you are going down, I would urge you to seriously consider whether this 5k would actually make a bigger difference than having all your debts written off.

Donedoingdebt

Don't mean to be nosey, but why can't you claim benefit for yourself if you're ill?