Bankruptcy, with house and other questons

zebedeeuk

Good morning all,

I am currently contemplating bankruptcy and have been searching around the web for information to try and get a better understanding of the process and consequences.
I wonder if I would be able to paint a picture and illicit seem feedback from people who have gone through this procedure and can shed some light and practical experience on what was involved.

I apologise for the length of this post and if it reads like a list! :-)

I currently have almost £40k of unsecured debt. I am alone.
This is made of the following figures (which are approximates)

AA Loan - £17k
Virgin CC - £10k
Post Office CC - £5k
Lloyds TSB CC - £2.5k
Lloyds Overdraft - £2k
Lloyds Loan £2k

I have a mortgage, of which I am NOT in arrears and never have been.
I have about £75k left on the mortgage (maybe a few £k less than that) and the house is probably worth at most £90k, but in this climate, I cant imagine it going for over £85k, if at all.
So I don't have negative equity.

Up until about a year ago, this debt was somewhat sustainable, as in I didn't miss payments and was getting by.
I eventually caved under this financial pressure and went to CCCS, where I now have a debt management plan and am paying £301 per month into it.
Suffice to say, that none of my debtors were happy with this and I am still hounded weekly by debt collection agencies.
Its safe to say that my credit rating, from being healthy, is now ruined.

Outside of this debt management plan, I also have a catalogue with IsMe and owe approx £2.4k (again, I am not behind on any payments).
I also have a credit plan for a laptop, where I owe about £150 now and again, not behind on payments (only £24 a month).

I do not live in my property currently and have private tenants (loose family) and they have been in for about 6 months. I have not declared this to my mortgage provider (Halifax) and it is not a declared income.
I am essentially still registered at this property and still on the electoral roll.

The income I get from this allows me to rent a room in London, which allows me to be near a job, which is a 1 year fixed term contract that I am about 4 months into - and pays £39k.

The debt has been accumulated over many years, including when I was married and increased after getting divorced by taking on the house myself and living beyond my means.

Employment situations have changed many times over the last 4 years which has changed from being in a position to live with the debt, to down and out struggling.

I am currently very unhappy living away from my home town and I have indicated to my employers that I wish to be relinquished early from my contract and I plan on going back to 'home'.
I will have to take a CONSIDERABLE pay decrease but I need to get out from the pressure of this debt.
It could be that I find a job, if even just a temp, that pays 50% less than my current salary.
Essentially I am ending my IT career because of my unhappiness.
I have been previously treated for severe depression and I fear I am relapsing.

I only see bankruptcy as the way forward, but I am concerned regarding the OR investigations and whether I would have any criminal case brought against me. I'm thinking of the renting out the house etc.

I understand that I would loose my house and would have this bankruptcy against me for many years, if not forever, but I need to be able to breathe again.

So basically, I was wandering if anyone had any experience of what I have described above or any advice?

Many thanks for taking the time to read through this.

tiggerbodhi

Didn't want to read and run, hope you find the solution to the questions raised, my belief is you havn't done anything "criminal" or "illegal" you may have broken the terms of your mortgage agreement by renting it out, but if you are going to go BR that will go anyway, you should have declared the income on your tax return, but then could offset the mortgage payments and expenses associated so nothing for HMRC to gain there.
Main advice would be to talk to one of the debt charaties, Step Change (formerly CCCS) the CAB etc.

Good Luck with your Journey back to a millstone free life

zebedeeuk

Thanks for your comments. As my debt management plan is with step change, I will certainly speak with them before deciding.