advice needed please ??

badmonkey_2

Hi

I am currently looking into bankruptcy as an option due to a business failing.

I currently owe about £85000 unsecured debt business and personal

This amounts to outgoings of £1600

My mortgage is £100000 with a secured loan of 10000

last valuation on the house was £125000

monthly mortgage payments are £700
secured loan is also £140

my failed business owes about £25000, this includes a bank loan £15000 and £5000 overdraft facility as well as approx £5000 to creditors

I also have another business which I am self employed and earn in the region of £28K per year. I am married with a four year old child

I need to wrap my failed business up and I think declare myself bankrupt

I have not missed any payment for anything in the last 10 years until 2 months ago, I have missed all visa /loan payments and mortgage payments.

The only assett I have is my house apart from that there is nothing of any material value

my wife does not earn a penny and we receive approx £60 child benefit per month

my main job that I am doing now is contract work and I have been doing this for a year in aug hence no accurate salary.

My mortgage is crippling me and I am more than prepared to lose the house as I feel we need a fresh start.

over the last 2 months I have ignored all phone calls from credit card loan companies but have kept up to date with council tax water gas elecy .

I think I need to go bankrupt asap.

would anyone be able to give me some advice ? can I contact a solicitor for advice? there seems to be very little information or help . I have phoned a couple of these online charity based organisatons but they just tell you the options with no real advice. I sppooke to an IVA company who could save me £400 per month but I would still owe more than that.

I am 33 and looking for a clean start, I do not want people knocking on my door asking for money

any advice ?

owetoomuch

Someone with more experience will come along shortly, but your first point of contact should be with CCCS or the CAB and they will advise you on what your options are. Both are free and are not in the business of making money out of you like some of the IVA companies advertising on the TV.

Take care and as I said someone with more knowledge will be along shortly.

badmonkey_2

thanks for that I have been reading through some threads and there seems to be some very experienced people on here giving good advice

owetoomuch

They are really good on here, they helped me through going to court and my OR interview and I would have been up the creek without them.

rog2

Hi BM - Welcome to Bankruptcy and Living With It.

I echo the advice of 'owetoomuch' in that you should get professional, and impartial, advice from one of the Debt Charities, such as CAB, CCCS or National Debtline. There are links to these organisations at the top of the main forum page.
I think that any Beneficial Interest, in your house, WILL be taken by the OR/Trustee, but this will, probably, be more than outweighed by the 'fresh start' that bankruptcy WILL give you.
I would advise AGAINST talking to a private IVA company, since these companies stand to earn fees of up to £8,000 if you chose to go down the IVA route, therefore, they are most unlikely to advise bankruptcy as a solution. Take note that, if you do enter into an IVA and can not keep up with the payments, then bankruptcy will, almost inevitably, follow.
There is nothing, in bankruptcy, to prevent you from continuing in your 'self-employed' contract work.
Obviously, talk with CCCS, or CAB, but I think that they would probably advise bankruptcy in your position. Let us know what they say, and we will try and advise you further.

badmonkey_2

thanks for that I will go and sort something out this week

what is this thing about having to pay an amount for 3 years ?

has anyone had to do it and how much did they pay ?

wherediditallgo

That's an IPA (Income Payment Agreement). The OR will look at your SOA (Statement of Affairs) - if you have a surplus of income of at least £100pm after your expenditure is taken into consideration, they will expect a payment of at least £50pm for 3 years from you. This money will be shared amongst your creditors as part-payment of your debts. If the OR decides you should have an IPA set, he'll write to you confirming the amount, advise you of any changes he's made to the amounts you gave in the SOA & ask you to sign an agreement to pay. You don't have to accept the amount stated - you can contest it if you think it's unfair, but you need to weigh up the pros & cons of doing that & have a good case to put forward, rather than just contest it because you don't want to pay it. Provide you sign the agreement & send it back within the time limit given, you'll then get a copy back that has been signed by the OR together with details of the OR's agent who will be contacting you to arrange payment. The letter from the OR's agent will confirm the amount due again, & will give you various options for making payment. You can read more about IPAs here.

You can get an idea of how the IPA percentages are calculated here. However, bear in mind that the IPA isn't based on your net income but on what your surplus income is. Someone who's on £40k is no more likely to get an IPA than someone on £20k - it's what you have left after your outgoings are taken into account that matters.

fermi

Income Payment Agreements are explained on the Insolvency Service website here:

http://www.insolvency.gov.uk/guidanceleaflets/ipoipa/ipoipa.htm

along with lots of useful factsheets here:

http://www.insolvency.gov.uk/guidanceleaflets/Guides.htm

Another explanation of IPA's plus a table of surplus income versus the amount you would pay per month in a IPA is given here:

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

TheWaltons_3

Is your company Ltd?

I do believe, in this case... the business can go bankrupt without you having to.. or something like that

rog2

TheWaltons wrote: »

Is your company Ltd?

I do believe, in this case... the business can go bankrupt without you having to.. or something like that

Legally true TW, but in reality most Banks/Financial Institutions require personal guarantees from Directors/Owners of small businesses, so they are covered either way.