Advice on going Bankrupt, specific questions

jojo9786_2

Hi,


First apologies if this thread belongs somewhere else, or I'm asking silly questions but I could really use advise from people in the same boat or who have gone through the same things.


Second, my story. I got a overdraft at the age of 18, (now 26) and that was shortly followed by a credit card, and then other credit card, store cards and loans. Around the age of 19 I battled depression, I lost my job my boyfriend and nearly my family. I drank and I spent whatever I could to make me happy but then I hit rock bottom. I couldn't afford repayments, I tried a DMP which failed, I thought I had no option but bankruptcy, however I was offered another job which kept me afloat, and by afloat, I mean I could just pay my bills rent and eat. I just simply stopped paying anything back. I repaired the relationship with my family slowly but never revealed the true extent of my debt.
Roll on to present day, I am now 26 and have made no payments to my debts in years, although I am still being chased for them. My family and partner and now fully aware of debt situation and I now feel able to face my problems. I haven't for so many years due to depression and the fear of what may happen for not paying.
I am not in a financial situation in pay the debt back, for what I could afford I would be paying the debt back until I am 34, and that's even it I stay on the same wage, no redundancy, SMP etc.
I considered a Debt relief order, but I owe about £15,500 and an IVA would be suitable if they let me pay a payment of £80 a month which on research is something I wouldn't be able to do.(I am on a low income and have a child)
So I am left which bankruptcy, which I considered all of those years ago and I kick myself now that I didn't own up to every one and do it then.
My family have offered to give me the money for the fees however I just have a few questions and I seem to be getting conflicting answers for Debt charity's etc.


So if anyone can help, it would help me so much, ignoring this problem for so long has caused me nothing but stress, worry, I am always irritable and I always feel like I'm cheating on my partner, keeping this problem away from him. So hears my questions....
Q1. Will an OR question why I haven't made payments in the last few years especially since I have been working?
Q2. Will an OR go through my bank account to look at what I spend my money on? (Some times I do the shopping and my partner pays the childcare cost)
Q3. Do I have to attend court?
Q4. I live in a rented property and am not in arrears, do I have to notify my landlord?
Q5. I currently use my dads bank account to have my wages paid into since I couldn't get one, will this be frozen?
Q6. I have a contract mobile phone but again this is in my dads name, and I allowed to carry on paying this since I have a verbal agreement that I pay it every month.
Q7. I pay for the upkeep of my car (tax, mot, insurance) but the car is my boyfriends and has always been in his name, will this be taken into account?
Q8. Am I going to be completely scrutinized by a judge and OR for burying my head in sand for all this time??










I am so worried that I'm going to be told that I am a complete idiot and that I should pay it all back at a cost of something stupid a month leaving me with no money for my child or our house and leave me nothing once again.
Again any help will be so appreciated I should have sorted this years ago but buried my head so I wouldn't have to lose everything again, but now I know I have to face facts and sort this so I can wake up in the morning and not have the fear of a Debt collector, and I would love to pay it all back but I don't see that is viable in the next five years, so I feel this is my only choice.


Thanks in advance. (A little relived after typing all of that!!)

2kadmin

Hi,

A quick response but hopefully it will help.

Q1. Will an OR question why I haven't made payments in the last few years especially since I have been working?
-Possibly, is there a significant surplus in your income? Otherwise, if you are just about keeping your head above water and you couldn't make the payments anyway, what would be the point of telling people hey I can't pay you..

Q2. Will an OR go through my bank account to look at what I spend my money on? (Some times I do the shopping and my partner pays the childcare cost)
Yes, they will but only really to look to see if you had one last splurge on the credit card before going bankrupt.. You'll need to submit a budget and they will most likely want to talk about that.

Q3. Do I have to attend court?
Yes, but possibly not in the way you are thinking, you go to a counter pay your money wait your turn to go into a side room swear that everything in your application form is accurate, wait around until a judge looks through your paper work (Many people just come back later) and declares you bankrupt, so no scary court room or judge.. (Sometimes and it's very rare will they ask you to sit with them mainly as they have questions regarding the circumstances)

Q4. I live in a rented property and am not in arrears, do I have to notify my landlord?
Not if you tell the OR your likely to be evicted if they are notified, and as you would struggle to obtain another rented property on the private market it's not in there interest to do so.

Q5. I currently use my dads bank account to have my wages paid into since I couldn't get one, will this be frozen?
You should be able to get your own bank account and I would advise you do that, there are a number of posts on here about how to do that.

Q6. I have a contract mobile phone but again this is in my dads name, and I allowed to carry on paying this since I have a verbal agreement that I pay it every month.
Be careful, do you really need a mobile phone? If you do, then I would show it on the budget as pay as you go top ups rather than anything else.

Q7. I pay for the upkeep of my car (tax, mot, insurance) but the car is my boyfriends and has always been in his name, will this be taken into account?
This is the hardest question to answer, basically this sounds like bad news to me.. As far as the OR is concerned they will first assess if you need a car, as for what they will do from that point on it's difficult to say.. You'll need to justify that it's cheaper to run a car than get the bus, train or any other form of transport. I seem to remember the forms ask for the value of the vehicle you have use of regularly, this is to prevent you driving around in a 63 plate BMW whilst claiming the household has no money.

Q8. Am I going to be completely scrutinized by a judge and OR for burying my head in sand for all this time??
Possibly but I would say very unlikely, the Judge will have seen 1000s of cases and your story is very similar to countless more before you.. Your interview with the OR is your chance to tell your story and clarify any questions.

Do you live with your partner or your parents or both? As the OR will want to ensure you pay only your share of the household bills, the experience I have is they may deem that your current agreed share is unacceptable and ask you to renegotiate.. To a degree everyone who lives with you will have there finances looked at if only for the purposes of ensuring everything is fair, which is not split down the middle if the wages differ dramatically.

hope this helps.

2k

longtermplanner

I considered a Debt relief order, but I owe about £15,500

Unfortunately the 15k DRO limit is strict so you should probably cross this off the list of possible choices.

and an IVA would be suitable if they let me pay a payment of £80 a month which on research is something I wouldn't be able to do.(I am on a low income and have a child)

An IVA in your situation with no assets to protect would be foolish. Even if you could just about get one approved, the chance of you keeping it up for 5 years is very small. Sorry but bankruptcy for you sounds like a much better option.

Q1. Will an OR question why I haven't made payments in the last few years especially since I have been working?

No. You haven't been living the good life, going on expensive holidays and buying designer clothes have you? You have been muddling along and being a bit of an ostrich about your debts. The OR will have seen this hundreds of times, it's perfectly normal.

Q2. Will an OR go through my bank account to look at what I spend my money on? (Some times I do the shopping and my partner pays the childcare cost)

The OR will look at your bank statements. You will have to supply a budget showing what you spend. But the OR doesn't try to match your budget against your bank statements then get cross if they don't match. Most people will change their spending when they go bankrupt so that wouldnt make any sense.

Providing what you are putting down is reasonable and you can justify figures such as your utility bills and childcare costs there wont be a problem

Q3. Do I have to attend court?

yes, but it isn't formal like crime dramas on TV with someone in a wig and reporters listening. And you will probably only see the judge for less than 5 minutes. You will be asked if you have taken any advice - mention some of the debt charities you have spoken to - and that will be it, all over, you will be bankrupt.

Q4. I live in a rented property and am not in arrears, do I have to notify my landlord?

I wouldn't bother, just keep on paying the rent

Q5. I currently use my dads bank account to have my wages paid into since I couldn't get one, will this be frozen?

No, absolutely not You should try to get a basic bank account from Barclays - you can have one of these even when you are bankrupt.

Q6. I have a contract mobile phone but again this is in my dads name, and I allowed to carry on paying this since I have a verbal agreement that I pay it every month.

It isnt your debt and it won't be affected by your bankruptcy.

Q7. I pay for the upkeep of my car (tax, mot, insurance) but the car is my boyfriends and has always been in his name, will this be taken into account?

If you need this car to get to work, then these expenses will be allowed by the OR. If you don't need the car for work then they won't be in which case you may have a problem affording them. The car doesnt belong to you so the OR can't touch it.

Q8. Am I going to be completely scrutinized by a judge and OR for burying my head in sand for all this time??

Again, no.

I am so worried that I'm going to be told that I am a complete idiot and that I should pay it all back at a cost of something stupid a month leaving me with no money for my child or our house and leave me nothing once again.

This isn't going to happen. You cannot repay your debt right now so it is your legal right to go bankrupt.

There is a good guide to bankruptcy which may answer a lot of your questions here: http://debtcamel.co.uk/debt-options/bankruptcy/

TheGardener

Hi
some good responses already - couple of points:
The court - courts serve an administrative function as well as the 'trials' we all associate with them. The reality of court administration is rather boring and involves more time sitting in a waiting room than standing in a dock (but that doesn't make good TV ) When you go BR - you present your petition to a clerk at a reception counter, pay your fees and wait for the judge to look at the papers - if they have some questions they might ask you to come into their office - its not a thing one normally does in an open court.

Tenancy - check your tenancy agreement small print and see if there is anything about BR in it. If there is, you will need to talk to the agent or landlord.

You are entitled to open a 'basic' bank account. There are 2 high Street Banks who are BR tolerant (Barclays and co-op) Make an appointment to open one (don't try it online) If its Barclays you go to just tell them you are going BR and need an account. If its Co-op just don't tell them you intend to go BR (read the stickies about bank accounts) but do open one and get your income paid into it ASAP. If all else fails, find your local Credit Union (google) and open an account with them - they have no BR restrictions. You need your own account - unless your Dad is ok with the OR having access to all his financial info too?

dojoman

You need to talk to one of the debt charities ASAP, also please have a look at this thread.

https://forums.moneysavingexpert.com/discussion/1056083

jojo9786_2

Thanks for the responses. You have answered the questions I had yesterday and I really appreciated it.
I am going to be in touch with a charity this week, to get more clarification however the last time I called a charity (and I can't remember what they were called) they said that if I went bankrupt I would have all of previous bank accounts checked, I could be punished for not paying back sooner or punished for not paying anything at all, and that the OR would decided how much I could live on.
Obviously this scared me to the point where I ignored my debt further. I am petrified of losing my rented home and family. I am so petrified of not being able to provide for my child.
My rental agreement doesn't say anything about bankruptcy and I private rent. My partner thinks I shouldn't say anything to my landlord because the rent comes out of his bank account and we are not in arrears.
I am also quite worried about my income, I don't and haven't lived an extravagant lifestyle, I've lived pay day by pay day, paying bills and food shopping, petrol and other expenses and that's it. Will this be questioned?


My partner and I pay the bills jointly - I transfer money to his account and direct debits come out of his account. Will the OR want to see his account?
I don't think my dad would be happy about his financial status being looked at. If I opened a bank account and went bankrupt a month later would the OR still want to see what I've been spending?
Also I have another question regarding my car, its in my partners name and I pay the upkeep. I work about five miles from home but I need this car for work, and taking my child to and from nursery. If I were to walk or get a bus, I would have to pay to put my child in nursery for longer - as at the moment I have a 15 minute window from when I leave work to when I have to collect her. Will the OR accept this?
I do appreciate you taking the time to reply, and I will be touch with a charity this week however I know I need to sort something soon I can't spend another eight years living like this but I am so scared that I will be punished and lose everything.

woodformoretrees

It sounds like your initial experience with the charity left you more confused than when you started. I've found that's often been the case too.
When I had my OR meeting, (it was a month after bankruptcy and I had to chase for it - maybe because I didn't petition for my own bankruptcy?) I had listed out all our bills. Everything that I could think of, including costs of school lunches, my son's phone, after school clubs, boiler maintenance, prescriptions....all the stuff that you never think of when you budget).
We didn't disclose my husband's earnings. I pay 50% of all the bills. That wasn't argued. We made sure that we claimed for every cost that we had or would come up against. The OR okayed this. If your costs are reasonable (I think some people even include savings for family holidays etc) then they won't refuse them.
Your landlord will just be interested in getting the rent paid. If it's paid and up to date then he'd have little interest in chucking out viable tenants.
I walked in to my OR meeting fearing that I was going to be judged on every spare penny that I'd have for the last five years. By the time I got in to the meeting I was a blubbering wreck and almost unable to speak. By the time I walked out my shoulders felt like the world had been lifted off of them, and all my fears were unfounded.

When you fear you'll lose everything you won't. You will have a roof over your head, and you will have your children and you will have your future. I speak as someone who is shortly to have their family home sold from under them. It was, at one point, the thing that prevented me from accepting the need for bankruptcy and also lead me to being suicidal. It was the worst thing I could think of ever happening. When you realise that it's not, then you know that bankruptcy really is the only option.
It's a very scary time, but it's also a very healing time.
I hope you find your route and make the decision that's right for you and your family.

jojo9786_2

@Woodformoretrees, Thankyou for your post it made me cry. And obviously everyone else who has replied has helped me.
I feel I need a massive kick to do this once and for all but I know I am the only person who is going to kick myself.


I have another question, a lot of the goods in my home is my partners, nothing extravagant but I think he is worried we will end with someone coming in and taking his items away if I go bankrupt. Is this the case, or am I over complicating everything?!


I haven't paid my debts in a number of years and I am so worried that because I've both Christmas Presents, clothes, a meal out once in a while I'm worried I'm going to be so punished in a sense for this.


Will I have to tell my employer or HMRC regarding tax credits?


I'm Sorry I have so many questions I just don't want to call a debt charity this week and be told how wrong bankruptcy will be for me.


I want to be sure this is the option for me.

nervousandready

woodformoretrees wrote: »

It sounds like your initial experience with the charity left you more confused than when you started. I've found that's often been the case too.
When I had my OR meeting, (it was a month after bankruptcy and I had to chase for it - maybe because I didn't petition for my own bankruptcy?) I had listed out all our bills. Everything that I could think of, including costs of school lunches, my son's phone, after school clubs, boiler maintenance, prescriptions....all the stuff that you never think of when you budget).
We didn't disclose my husband's earnings. I pay 50% of all the bills. That wasn't argued. We made sure that we claimed for every cost that we had or would come up against. The OR okayed this. If your costs are reasonable (I think some people even include savings for family holidays etc) then they won't refuse them.
Your landlord will just be interested in getting the rent paid. If it's paid and up to date then he'd have little interest in chucking out viable tenants.
I walked in to my OR meeting fearing that I was going to be judged on every spare penny that I'd have for the last five years. By the time I got in to the meeting I was a blubbering wreck and almost unable to speak. By the time I walked out my shoulders felt like the world had been lifted off of them, and all my fears were unfounded.

When you fear you'll lose everything you won't. You will have a roof over your head, and you will have your children and you will have your future. I speak as someone who is shortly to have their family home sold from under them. It was, at one point, the thing that prevented me from accepting the need for bankruptcy and also lead me to being suicidal. It was the worst thing I could think of ever happening. When you realise that it's not, then you know that bankruptcy really is the only option.
It's a very scary time, but it's also a very healing time.
I hope you find your route and make the decision that's right for you and your family.

I'm about to go BR and found this useful. I am also absolutely terrified and have buried my head in the sand for years. I can't begin to imagine how I am going to cope as I am not currently working and have left it so late that I have nothing. I am finding this site so helpful. Thank you all -

emlarbs

Hello,

I just wanted to reassure you with regards to the car & items belonging to your partner.

I'm married and I went BR last Jan. I'd accrued my debts from before I met my hubby so nothing was in joint names.

All valuables belong to my hubby as he has had the money to pay for them; car (worth about £7k), big TV, gadgets etc.

The only asset I had was an old ford escort which I sold just before BR for about £200 scrap (all it was worth); I declared this on the statement of affairs and told the OR that the money used was to pay for the tax on the car my hubby owns.

They accepted this as I am the main user of the car since I drive for work appointments and they also accepted that the majority of the car costs (insurance, MOT, servicing, petrol) were paid for me since I use it the majority of the time.

Other assets (white goods / gadgets etc) purchased by your partner do not have to be declared as they are not yours and so they will not be taken away. You only have to tell them about valuable items that belong to you; i.e. that you could sell without the consent of anyone else.

Please don't worry about things too much as it is not as bad as people imagine. Yes, there will be some questions over how you got into debt but you are not alone; there are all sorts of reasons why we all got to this point!

I mentioned my depression in the reasons why I got into debt as this does play a part in it. Also worth noting is that I was allowed to keep paying my gym membership as my doctor has advised that regular exercise is important for my mood, so if you pay for anything (e.g. exercise classes, other therapy etc) then you can try to include this in your outgoings too.

Seeing the judge is not too bad - the one I saw was even a little bit jokey given the circumstances - yes it will be embarrasing to admit that you got it wrong, but the important thing to remember is that you are not the only one and life will get better once it is done and dusted.

You won't end up paying more than you can afford and you have the right to question any decision by the OR if you feel it is unfair.

Hope it all goes well for you

longtermplanner

jojo9786 wrote: »

the last time I called a charity (and I can't remember what they were called) they said that if I went bankrupt I would have all of previous bank accounts checked

this is correct, but not something to worry about

I could be punished for not paying back sooner

on what you have said, this could politely be described as Tosh

or punished for not paying anything at all

more Tosh

and that the OR would decided how much I could live on

this is correct, but it isn't done in a vindictive fashion.

I am petrified of losing my rented home and family. I am so petrified of not being able to provide for my child.

This isn't going to happen. The period after bankruptcy isn't going to be the best time of your life, but you will get through it fine and there will be an immediate sense of relief that you have taken action and don't need to hide any more from your debts.

My rental agreement doesn't say anything about bankruptcy and I private rent. My partner thinks I shouldn't say anything to my landlord because the rent comes out of his bank account and we are not in arrears.

Good for your partner - I agree.

I am also quite worried about my income, I don't and haven't lived an extravagant lifestyle, I've lived pay day by pay day, paying bills and food shopping, petrol and other expenses and that's it. Will this be questioned?

You are likely to be asked what you spent the original credit on - if you can't remember , just say so as it has been such a long time. You are not going to be accused of being extravagant because you buy clothes from M&S not charity shops (I made that up but you get the idea.)

My partner and I pay the bills jointly - I transfer money to his account and direct debits come out of his account. Will the OR want to see his account?

No.

I don't think my dad would be happy about his financial status being looked at.

Thats not going to happen either. The OR will only be interested in accounts in your name.

If I opened a bank account and went bankrupt a month later would the OR still want to see what I've been spending?

You will still be asked, yes.

Also I have another question regarding my car, its in my partners name and I pay the upkeep. I work about five miles from home but I need this car for work, and taking my child to and from nursery. If I were to walk or get a bus, I would have to pay to put my child in nursery for longer - as at the moment I have a 15 minute window from when I leave work to when I have to collect her. Will the OR accept this?

That depends which would be cheaper and how large your car expenses are. If you can make a good case that it is cheaper to do what you are doing at the moment, the OR is likely to be happy with that, because he is not going to be able to get any value for the car anyway.

I am so scared that I will be punished and lose everything.

Did I mention this isn't going to happen?

Best of luck.