advice needed ASAP please

journey_2

Hi there everyone. I`m a first time poster here and I could really use some help from you guys.

To fill you in on a bit of background info, I had a small business which had an overdraft facility and some personal credit cards that I used to purchase items for the said business. Things got tough and I ran up big debts, with the bank closing the overdraft and the cards being cancelled.

This has left me with around £20k of debt to the bank and another £30k between half a dozen cards/loans.

I`m making nominal payments to each of these debts but truth is I`ll never pay them off even if I live (and work) to be a hundred.

The bank is threatening to bankrupt me and I was wondering about a couple of things before going further down this path.

1. Does it make any difference if I bankrupt myself or someone else bankrupts me?

2. My wife was already living in our home before she met me. She`s been here for about 10 years whereas I`ve been here for just 7 years and my name is not on the mortgage. I have only been able to contribute financially for the past 2 and a half years. In your experiences, would we stand to lose the house or a part of it through a `beneficial interest` that could be claimed?

3. I work in a job where I get a basic salary and then commission / bonuses based on sales / performance. As such it is very hard to prepare an accurate SOA. Should I just base my figures on the basic or could that be construed as me giving false information? Basically, in bankruptcy would the OR look at my commission / bonuses and take money from them for the bank / cards or just from my basic salary?

4. My wife is particularly worried about any visits to our home from bailiffs or other people wanting to enter the property and remove goods. Is this a likely scenario or is it a lot more civilised than that? We have two young children and don`t want them to be affected by this if at all possible.

5. I understand that the `life` of a bankruptcy is 12 months or less, but how long could the payments continue for seeing as I am around £50k in debt at present?

6. In your experiences, what percentage of the remaining disposable income is taken for these payments after income and expenditure is calculated?

I know there are a lot of questions here but after trawling many websites and reading tons of pamphlets I`m still pretty confused as to the realities of the situation. I`m being told by several people that bankruptcy is my best option at this point and I don`t have any fears regaring the so called stigma of being declared bankrupt as there`s no way I`ll be getting credit for a long time anyway. I just don`t want to put my wife / kids through any hardship that could be avoided.

I await your advice with baited breath.

Thanks

fermi

Hi Journey,

journey wrote: »

1. Does it make any difference if I bankrupt myself or someone else bankrupts me?

It would save you the £335 deposit for the 'Official Receiver' and perhaps the £150 court fee. Several regular posters here have had creditors make them bankrupt, and they don't seem to have been effected unduly. One has just got their early discharge through.

The disadvantage is that it takes the process out of your hands, and you have little control over the timing of it all.

Many creditors use the threat of bankruptcy as a bluff to make you pay more than you can really afford, so there is no guarantee that they will go through with it.

2. My wife was already living in our home before she met me. She`s been here for about 10 years whereas I`ve been here for just 7 years and my name is not on the mortgage. I have only been able to contribute financially for the past 2 and a half years. In your experiences, would we stand to lose the house or a part of it through a `beneficial interest` that could be claimed?

I'm no good at property, so hopefully someone else can advise.

3. I work in a job where I get a basic salary and then commission / bonuses based on sales / performance. As such it is very hard to prepare an accurate SOA. Should I just base my figures on the basic or could that be construed as me giving false information? Basically, in bankruptcy would the OR look at my commission / bonuses and take money from them for the bank / cards or just from my basic salary?

Be as honest as you can about your finances, explaining fully. The OR will make allowances for a variable income, but you need to let them know.

4. My wife is particularly worried about any visits to our home from bailiffs or other people wanting to enter the property and remove goods. Is this a likely scenario or is it a lot more civilised than that? We have two young children and don`t want them to be affected by this if at all possible.

Much more civilised that that. Bailiffs should not be involved as virtually all household goods will not be touched, and in the rare case that they are (eg plasma TV worth £5000) it would be a polite agent collecting not a bailiff.
Virtually never happens, so don't worry

5. I understand that the `life` of a bankruptcy is 12 months or less, but how long could the payments continue for seeing as I am around £50k in debt at present?

If you are required to make payments under an IPA, that is 36 monthly payments from the start of the IPA, so 3 years. This extends beyond your discharge, but does not stop your discharge.

6. In your experiences, what percentage of the remaining disposable income is taken for these payments after income and expenditure is calculated?

There is a table of IPA percentages at the bottom of this page:

http://bankruptcy.informe.com/income-payment-agreements-ipas-dt18.html

but it is between 50-70%

plus more info on IPA's can be found on that link.

Hope that helps a bit.

rog2

I echo most of what what Fermi has said. I was made bankrupt by one of my creditors (HMRC) in very similar circumstances to yours - propping up a failing business etc.
I do, however, feel that you are 'less in control' of the situation if a creditor petitions for your bankruptcy than if you 'self petition' although, in fairness, I did receive an early discharge, after just over 6 months.
If, as you say, the house belongs to your wife, and did so before you were married, then there really is no reason that OR would consider that you have any beneficial interest in the property, unless you have specifically been paying the mortgage from your own bank account.
With specific regard to the Bank's threat to petition for your bankruptcy, this COULD be a 'scare' tactic. Although they would, legally, be entitled to do so (any creditor to whom you owe more than £750.00 has this right) they will, also, be very aware that they will have to pay the 'up-front' charges - these are much more than the £485.00 for self-petitioning - they will have no guarantee of getting this money back from your 'estate in bankruptcy'. Equally, although the bank will have petitioned for your bankruptcy, they will not get any preference over your other creditors and could end up with nothing. Indeed some Banks have been known to use the threat of 'bankruptcy' to entice debtors into even more debt, with the offer of 'managed loans'.
I would suggest that you seek some independent professional advice, before making any final decision. You can get free and impartial advice from any of the registered 'debt advice charities' such as CAB or CCCS, and you will find links at the top of the forum page.