The "what do you need to know before you go bankrupt?" thread!

ClaireLR

Thanks Fermi.

Right now here's a huuuuge, post coming up, hope some of you will be bothered to read it,

A while ago some one on another thread advised to possibly do a letter to explain why you are in debt and where the money has gone, and I thought that sounded like a really good idea, she had also done one and attached it to the BR petition, it seems like a good idea because I know that at my interview I will be so terrified that I'll not be able to remember the answers to some questions that I may be asked and so it might be worthwhile now sitting down and writing it all out, that way even if the OR asks I can have a copy in front of me and muddle my way through.

So here is what I am putting in my letter and I would really appreciate any comments.............

I am writing this letter as I realise there will be questions, which will need to be answered and hope that this letter may save you some time and explain some things in greater detail than on my petition form.

My reasons for being in debt are the breakdown of relationship last year, and also living beyond my means for some time now.

My debts, as you will see from my form are as follows

Lloyds TSB loan and Tesco loan – these are my 2 single biggest debts. I had the Tesco loan for debt consolidation on a previous loan from Northern Rock, the paperwork for this loan will be provided along with all other paperwork I have relating to my debts. I also owed money to a solicitor for a work related problem, again paperwork can be provided. I also paid off in full at that time my mint credit card and lent some money to my ex-partner as he owed money to some friends and family and we were looking to move in together. Some of this money was also spent on day-to-day living. The Lloyds loan was to again pay off money owed on the mint credit card (from generally living beyond my means) and pay of outstanding finance for my car, as the interest on the Lloyds loan was a lower rate. (Paperwork for the car loan obtained through GE capital Woodchester can be provided if you wish)

Part of the debt on the credit card was due to moving into my flat last year. At the time I was engaged and when I spent the money I honestly thought I would be able to pay it back. Unfortunately later on last year myself and my (now ex) partner split up and I could no longer afford the payments. The Halifax overdraft I took out last year in November, this was to do some home repairs also as we had, for a short time, got back together and agreed to pay this back together. Unfortunately again after Christmas things did not work out between us and again he moved out leaving me with this debt.

The Lloyds overdraft, smaller Halifax overdraft, and mint credit card, I can offer no explanation for other than to say I have lived beyond my means. I haven’t used these credit facilities for any one thing in particular, but for day to day living over time.

Blacks veterinary group – my cat was ill last year very soon after I had her and I hadn’t yet taken out insurance for her. She required 2 overnight stays at the vets and blood tests resulting in a bill for £350+. I could not afford to pay this so after speaking to Payplan it was decided that I would pay £40 a month to Payplan to distribute amongst my creditors while Blacks would receive £50 a month until the debt was cleared. I wanted to get this cleared as quickly as possible so that I could continue to use their services when I needed to.

Optimax - I had laser eye surgery as this would work out cheaper in the long run than glasses and contacts. The cost for this was £800.




I took out a debt management plan with Payplan when myself and my ex-partner moved into my flat early last year he also had debts and so we together undertook a debt management plan with Payplan, and were able to afford £690 a month together towards our debts. I was happy with this as it meant that both our debts would be clear within 7 years. However as I have previously stated he moved out at the end of last year and I was left to pay off my debts alone, along with paying the bills for my flat alone and could only afford to pay £90 a month. At that rate it was going to take 27 years to be debt free and possibly longer due to the fact that some of my creditors were still applying interest, the amount I was managing to pay them each month did not even cover the interest and I can therefore not see the situation getting better ever.

There are a few other things regarding my statement of affairs and I would like to clear up a few things.

My car –I need this for work but more importantly to me I need it as my dad suffers from osteoarthritis in his hands, legs and toes. I go to see him 4-5 times a week and this includes taking him shopping and some of his cleaning and his ironing for him as well as hospital appointments. He has no other family other than my brother who lives 30 miles away and has a family to consider, as well as working up to 60 hours per week therefore it is not possible for him to look after my dad. Although I live near to my dad it is not within walking distance, I estimate that it would take me between 1 and a half and 2 hours to walk to his house (15-20 mins in the car), and there are no buses that run from my house into the main town after 6pm (and back again) in order for me to catch the second bus I would need to get to get to his house. I am especially worried about this, as I really do need my car to be able to go and look after my dad.

My gas and electricity – these may seem high but I can assure you they are genuinely what I use. The supplier is Npower if you wish to check this and I can supply a phone number if you need this.

My TV licence is £22 as I have recently started paying by direct debit. This payment will come down to £11 (approximately) from October onwards. (Paperwork can be supplied if need be)

Clothing and footwear, I work in the NHS and am not provided with a uniform and wear suits to work, (I am a secretary and therefore need to look smart) and so I need this money for work clothes and footwear as well as normal clothes and footwear.








Internet and TV. Looking at the guidance on the Internet this should not be allowed but I signed a contract in February (paperwork can be provided if need be) and this contract is for minimum 12 months. I know this type of expenditure is normally not allowed, but if this is disallowed then I shall have to find the money for it from somewhere as I have signed the contract, and this will lead to detriment in other areas of my expenditure, which in turn could mean that I have to borrow from friends/family to make ends meet, which is something I do not want to do. Also, I am looking into starting a college course in September, which will be funded by my employer, when this goes ahead I will need the internet for study purposes.

Emergencies – this is for household emergencies; my fridge freezer is going to break any day now and I cannot afford to replace it without making some room on my expenditure to cover such emergencies.

As you will see I have a negative amount showing on my statement of affairs and am taking advice at present to reduce some of my bills to try and live now within my means.

I have written all of this down as I know there will be a lot of questions to answer and I suffer with my nerves (I am on medication for this from my GP) which means that I am finding the stress and pressure of this almost unbearable. I know that some things will still need to be asked by yourselves but I wanted to get the majority of it down on paper as I am worried I will forget things when asked.

I have made some mistakes in the past but am now trying to sort out my debts and my life and to make more sensible decisions in regards to my finances. I take my finances very seriously. I have as you will see from my paperwork made offers to my creditors some accepted them and stopped applying interest, some didn’t accept the offers and have continued to pursue me for more money than I can afford to pay despite me telling them that Payplan were dealing with my debts and could not afford to pay more, and they have still continued to apply interest and my payments to them did not even cover this interest.

I have taken advice about my situation from both National Debtline and CCCS the latter advised me on my statement of affairs both agreed that bankruptcy was the best route for me, as I could not afford an IVA. Also I spoke to the insolvency service and they sent me a large amount of literature about the process of making yourself bankrupt, which I have read and understand.

'Thank you for your time and I hope that you can see bankruptcy is something I take very seriously and that I have thought and discussed this in great detail and feel that this is the best and only way to resolve my current situation.

I know this post is humungous so if you have reached this far then thank you!

Does it sound ok?

tight_jock

Looks pretty comprehensive to me!! It seems to cover all areas of expenditure and offers explanations too.

try not to worry too much.

:beer:
TJ

betterlatethannever

Well that was only slightly quicker than reading 'War & Peace' lol
It seem very good to me and offers explanations for EVERYTHING. They will at least see you are taking this seriously by doing the letter

ClaireLR

Cheeky bump!

Anyone else want to have a read??

BLTN I love you sig, "if you think things can't get any worse it's probably only because you lack sufficient imagination" LOVE IT!

Thanks for the replies so far

One week to go and the dreaded deed will be over!

Posthinking

Hi Claire. In my opinion, too much info. Keep it simple. Lived beyond means, used loans, credit cards to service debts and for day to day living expenses should do. In my experience (for my critics) although I tried the same as you're wanting to, The OR still asked. Sweet, all he wants to know is that you've not been fraudulent, you didn't take out new loans knowing you were already insolvent and why you are BR. As I've said in previous posts after the interview I was prompted as to why. Don't worry chick. Once you've made the decision that's right for you and as long as you're honest with him you'll be fine

fermi

That's a very good summary Clare.

As normal, whether it helps you much in your dealings with the OR's examiner depends entirely on the attitude that your particular one takes.

I've seen reports that with some they really appreciate the extra info and the evident seriousness that you are regarding BR with. While with others, people say that they shouldn't have really bothered as it made no difference.

Which attitude your examiner takes is anyone's guess, but if it was me I would regard it as being very helpful, conscientious, and honest.

Posthinking

Blind, you'd confuse the hell out of anyone! Me too apparently, she did the same for me

ClaireLR

Anyone else like to read my essay above? (if you're tired I wouldn't recommend it, you'll fall asleep before the end!)

PixiePie

My two pence's worth Claire (And please remember that I am a real old woman worry-wort, and arrogantly think that I have to be oh-so-much better than others (I don't, but that's what it boils down to apparently according to a counsellor I once saw lol).

I think the letter is a good idea if a)it helps you remember what you want to say b)helps you feel better/calmer/more in control/less upset about the whole thing c)you think it explains things better than you might be able to to the OR. From the OR's point of view, surely too much info can't be a bad thing (although in my case I seem to be worrying about every tiny detail, so this would run through my head stupidly). From what others have said with their personal experience of the OR, they have been guided to their answers if at all stuck, so this makes them(to me) sound more human and the very obviously serious way you are approaching this can only be a good thing.

All in all, if it makes you happy, do it
Am starting to think perhaps I should do one, but seeing as my 'youre only allowed 20 words' online form explanation confuses the hell out of me, I can't see it being very helpful, indeed, will probably make the OR's brain implode with questions lol.

Good luck with it and keep keeping us updated (please, it's helping me at any rate )

ClaireLR

Thanks pixie,

It's helped me to feel better to write it all down. The thing with me is I'm not good at explaining things especially when I'm under pressure (does anyone else feel like they put themselves under pressure in BR???) so I thought if I can get it all out and on paper in my own time, and have time to think about things and work out where my money went beforehand then better for me and the OR really, I'm sure they've got better things to do than listen to me ummmm and errrr for an hour or so. I'm going to have a cope of this handy when I have my interview so that I can refer to it, I'm kind of hoping (although it's just a small hope!) that maybe as I've wrote all of this down they might ask less questions!

Also when I was writing it down I was able to look through all my paperwork and kind of get things straight in my own head ready for my interview.

I'm kind of looking forward to it now in a strange kind of way. All I have left to do now is write out the forms, I've done most of it online but I'm going to handwrite it all out and fill in the missing bits on Tuesday I think. Then I'm going to take it to work Wednesday to make 3 copies, fetch the cash from my wonderful Dad who is lending it to me until I can afford to pay it back, and by this time next week the deed will be done!