help and advice please

russfred1

Hi all,

Really need some advice on what to do really and what to expect from starting the bankruptcy ball rolling.

Both my self and my wife are seriously considering bankruptcy as we just can't afford to live anymore.

Back in 2007 we took out the infamous together mortgage with a 25k loan. The intention of this was to pay off outstanding visas and loan and just have it in one place. However not long after we used the cards again and got more loans, added more onto the 'together' loan and never thought twice.
Last year, despite being told it wasn't possible and after years of trying, my wlife gave birth to my beautiful son. We managed financially although it was tight and my wife went back to work part time after her matetnity ended. 9 months later we found out we were expecting a baby girl!!!! We were over the moon!

HOWEVER, thieves impacted us massively financially now as we only have a small 2 bed tterrace for which we have a substantial mortgage and less income with more mouths to feed and all that goes with it!

We are in around 15k neg equity, I have 9k visa, 9k loan and a 5k car hp agreement as well as 25k unsecured together mortgage loan. My wife has the together loan and 8k visa but would be unable to afford the mortgage if I went bankrupt.
We could rent a 3 bed house for around 100 less a month than our current mortgage, and a clean break if we went bankrupt.
My questions are: I travel 80 miles a day to work and need a decent reliable car so could I keep what I have as I would be able to afford the payments, only £100 a month and I owe more than the car is worth.
Would we have to do single applications for bankruptcy?
Should I stop paying creditors now or wait till I have been declared bankrupt as I could do with the money for essentials such as food/ clothes for the kids, don't want the OR to think we are taking the p**s by not paying creditors yet buying clothes.
Do I need to get a bank aaccount and rental property sorted prior to being declared?

Sorry for the long post just want to have some clarification as we see this as the only option and a way of having some sort of life back without the debt cloud hanging over us.

Thanks

alastairq

HI, & welcome!

If the car is on HP, it is not your asset. If the HP company are agreeable [and the OR can be convinced of your transport expenditure?}...you may continue paying.

Or, hand the car back to the hP company, and buy yourself something [under £1000..the current limit for a car exempted-as-an-asset]. You should have no problems getting such a car exempted in BR..[See rules in stickies above?]


Bankruptcy is an individual petition, so both would need to petition [double the costs too] if that is the best way to go..although, neither need do the deed at the same time.


Stop paying creditors as soon as your mind is made up.

If intending to move out, stop paying mortgage too, and seek a nice rental?

Make sure you don't pay any one creditor in preference to another...best to make token payments to all [£1 a month each, whether they like it or not....should one of them seek a CCJ [which gets trumped by the eventual BR]....it would show that Court you have intention to pay.

Normally, a mortgage is untouched by BR [until property sold, then any shortfall gets included in BR, regardless of when that happens].

Only unsecured debts are included in BR

You may, therefore, be able to keep paying the mortgage alone, to stay living where you are. With the property in negative equity, the OR will have no assets to realise. However, I'm not certain how the 'together' system works, others will know better.

Finally, you need to sort one or two basic bank accounts out before any BR petition. [two each is best..one for fixed, essential bills, DDs, etc..the other for day-to-day expenses......a system advocated by debt charities, and advised by Co-op bank themselves.
Co-op Cashminder is one.....must be done before petition.[ do not 'mention' BR whilst opening account.....BR, in any event only happens on the hour, on the day...cannot be pre-ordained...but...can be planned-for?}..or Barclays basic account is another, can be opened any time.


Co-op allow internet access throughout, Barclays refuse internet access whilst Undischarged.

If intending to rent, best done before any BR petition, as credit checks will be conducted by LLs or Agents..and confirm subsequent BR will not be an issue with tenancy?

russfred1

Hi!

Thanks for your reply, feels wrong to stop paying debts I owe so I just needed to know it was the right thing to do.
As I will be renting and it will take a couple of months to get the deposit/advance rent, will the fact I am not paying my creditors affect the credit check the landlord does or do the missed payments not appear on my credit report straight away?
Also, if I want to keep the car, which I do, will the OR understand why I am paying that debt above others?

Thanks again!

alastairq

Also, if I want to keep the car, which I do, will the OR understand why I am paying that debt above others?

You stated it was under HP?

In which case, it is neither your asset [belongs to the HP company] nor a debt.

You are, in effect, hiring the car.....it would never be 'yours' until all payments were met, etc.

russfred1

Sorry, I worded it poorly. I know the car isn't "mine", just save the hassle of Sorting another car if I could carry on the payments

longtermplanner

russfred1 wrote: »

My questions are: I travel 80 miles a day to work and need a decent reliable car so could I keep what I have as I would be able to afford the payments, only £100 a month and I owe more than the car is worth.

Why can't you move a lot closer to your work? This is the time to do it, when the children are tiny and not yet in school. Also it will cut down on your commute time

Would we have to do single applications for bankruptcy?

yes. There is no procedure for a joint application. This doesnt have to be done at the same time if it takes you longer to save up 2 sets of bankruptcy fees.

Should I stop paying creditors now or wait till I have been declared bankrupt as I could do with the money for essentials such as food/ clothes for the kids, don't want the OR to think we are taking the p**s by not paying creditors yet buying clothes.

You should stop paying anything to your unsecured creditors. You should also consider not paying anything to your mortgage as you will be handing back the keys. But as soon as you stop paying the mortgage, you are on a race to rent before you are evicted - this will normally take at least 3 months, often a lot more. If you have stopped paying the mortgage, do NOT tell the lender you are going bankrupt - say you are having some problems and are going to take financial advice.

The ideal order is:

1) move to somewhere rented
2) hand back keys
3) go bankrupt.

russfred1

longtermplanner wrote: »

Why can't you move a lot closer to your work? This is the time to do it, when the children are tiny and not yet in school. Also it will cut down on your commute time



yes. There is no procedure for a joint application. This doesnt have to be done at the same time if it takes you longer to save up 2 sets of bankruptcy fees.



You should stop paying anything to your unsecured creditors. You should also consider not paying anything to your mortgage as you will be handing back the keys. But as soon as you stop paying the mortgage, you are on a race to rent before you are evicted - this will normally take at least 3 months, often a lot more. If you have stopped paying the mortgage, do NOT tell the lender you are going bankrupt - say you are having some problems and are going to take financial advice.

The ideal order is:

1) move to somewhere rented
2) hand back keys
3) go bankrupt.

It's not really something we would like to do as all the family is nearby at the moment and to be honest work generally change locations around every 12 month's or so within the area and at the moment I am central to a lot of stores.

Would the fact that I have missed payments show up on the rental search and go against me though?

Sorry for all the questions

longtermplanner

russfred1 wrote: »

Would the fact that I have missed payments show up on the rental search and go against me though?

You need to check your credit records to find what they say. http://www.moneysavingexpert.com/loans/credit-rating-credit-score

If your record is poor, they you either need to rent direct from a landlord who is not using an agent, they are often more reasonable when it comes to taking decisions, or you need to be able to put up 3 or even 6 months deposit. If you can do this most landlords will be happy to rent to you.

In that case stopping paying the mortgage can help you get the large rental deposit.

russfred1

I think there may have been some misunderstanding. I have never missed a payment up until now on any of my loans or my mortgage. I was wondering how long it takes for missed payments to show up on my credit file as I will be missing payments to enable me to save money for rental deposit, in other words how long have I got from when I start missing payments till it adversely affects my chance of getting a place to rent.

longtermplanner

Sorry I did misunderstand.

I am afraid there isn't a simple answer to your question though. It all depends on the lender and when they get round to reporting to the CRAs