Little bit of advice needed please :)

mongoosio

Hiya,

I've had a good read through this forum and have picked up some useful info and good points (THANKS!!!) but there are a few things personal to my situation that naturally, haven't been answered so I'd like to put some questions forth and would ask kindly if anyone knows the answers to give me a little bit of advice on them, please.

Myself and my partner are in about £40k debt collectively. We both work full time at the moment but I am returning to university in September (obviously I will be sacrificing a full time wage in favour of a part time wage - when i find a part time job) and I will be living off my student loan. So, my first question is will this look unfavourably on me? The fact that I returning to unversity? Also, would you advise that I file for bankruptcy before or after I start university? Bearing in mind that I will need somewhere to have my first student loan cheque paid in to.

Secondly, the most recent credit I have obtained is just over a year ago in the form of a credit card to try and supplement my income (to live, basically!). Things have got so bad that we couldn't afford all of our bills and were skipping some - with skipping bills came late payment charges and demands for full payment. This has been going on for about 5 months now and we are up to our eyes in debt letters, threats, full payment demands so we are at the point now where we are paying very few of our bills because most of them are demanding full ammounts and the ones we have tried to pay will not accept what we were offering to pay. Will this look bad? Will they look at our bank statements and see few direct debits coming out and assume that we have lots of disposable income when in actual fact it appears that way because we are unable to come to arrangements with our debtors and are currently paying off friends and family that we owe money to.

Regarding the money I owe my family - will they take this in to consideration? Obviously, I know it wont be written off but will they consider this when they look my our outgoings?

Thanks for reading my long winded post! Any help or guidance on any of my [lots of] questions is very much appreciated!!

wherediditallgo

Hi, & welcome to the forum

Firstly, no-one can advise you on whether going BR is the right thing for you, either before or after you start university. The OR won't look at you unfavourably for returning to study - it's entirely up to you, & they won't judge that. All they look at is the money you've got coming in & the money you've got going out, & whether you're in debt because of what they see as unreasonable & unnecessary spending on your part - in those cases they can impose bankruptcy restriction orders, but those cases are rare when compared to the number of people who go BR each year, so don't let that worry you at this stage. The OR will assess your case, & if they find that you have a surplus income of over £100pm, they can impose a payment order called an IPA, where they agree with you that you pay a certain amount each month towards your bankruptcy.

Using your credit cards won't be the issue, it will be how you've used them that the OR will want to know. They'll expect you to give details of where the money's gone to, but they won't expect you to account for it to the last penny - they just want an explanation. They can get bank statements for as far back as they need from the bank itself, so don't worry if you haven't got them. The paperwork you need to complete to go BR will give you room to explain things in detail, plus you'll get the opportunity to do that when you're interviewed by the OR. The OR won't allow you any money to repay debts to family, & if you decide to go BR in the next few months you shouldn't give them any money from now on. They're a creditor, & giving them money while not paying other debts could make it look as though you've given them preferential treatment. The OR won't like that, & can ask for the money to be given back so that it's available to be shared amongst all your creditors.

However, all this is in the future. In the first instance, I suggest that you contact any of these organisations - CCCS, Payplan or National Debtline. They give free impartial advice, & will help you to decide whether going BR is the right route for you to take. You can also read a wealth of information about bankruptcy & the alternatives to it on the Insolvency Service website here.

If you do decide that going BR is the right direction for you, you can post an SOA (Statement of Affairs) here - we can help you to put it together before you submit it with your bankruptcy petition. If you don't know what some of the abbreviations are that we use here, you can look at this sticky at the top of the forum for details. There is also a sticky with details of bank accounts available to bankrupts.

mongoosio

Thanks for all of the advice. This statement really worries me though:

The OR won't allow you any money to repay family, & if you decide to go BR you shouldn't give them any money from now on. They're a creditor, & giving them money while not paying other debts could make it look as though you've given them preferential treatment.

Basically because the money I owe my mother is in the form of her credit card. She drew off money to help me repay some of my debts and she is on benefits herself so could definately not afford the repayments on this. What would you suggest I do about this matter?

If they deem my spending as unreasonable and unecessary can they refuse to allow me to go bankrupt? I don't think that they will deem my spending as unreasonable but what, exactly, constitutes "unreasonable"?

I'm sorry for all of the questions. My head is just in bits and I'm finding this all very confusing. Just wanna get to grips with it all first and know what I'm doing before I go foreward.

Also, where do I post my SOA and what things do I include in it to enable me to get some help with it?

Thanks a lot in advance

wherediditallgo

"Unreasonable" would depend on the circumstances, but for instance someone going out & spending thousands on plasma TVs, computers & a flash car three months before going BR would be frowned upon in a big way. Someone getting a consolidation loan a couple of years ago hoping to reduce their debts but then finding they were unable to wouldn't be looked at in such a bad light. It's spending on yourself for holidays, electrical gadgets etc as well as getting loans or new credit cards that you know or should have known you couldn't pay off rather than spending to keep a roof over your head, pay the utility bills etc that they have a problem with.

There are very few circumstances where the spending is deemed to be so unacceptable that the OR imposes a restriction order - you'd have to be either deliberately hiding assets/money or getting then spending several thousands in a relatively short period of time for the OR to have a big issue with it. It's rare for them to refuse to allow someone to go BR, but they will ask you if you've taken professional advice. If you haven't, that will definitely go against you, as going BR is a serious business & they wouldn't let you do it if they thought you didn't have enough information about it. In the vast majority of cases you'll be declared bankrupt & an assessment of whether you are able to pay a monthly amount via an IPA will be made.

The OR won't allow you money to repay your mother. Once they've assessed your case, you'll know how much you have left to live on each month, & it will be for you to choose to repay her out of that money if you can. If your mother is going to be in difficulties, then she needs to make arrangements with her credit card company to perhaps reduce the monthly repayments for six months. You can't put your mother's credit card on your SOA, as although it's a debt she incurred for you, it's her card & you're not a joint account holder. Having said that, it may well be that, once your case is assessed, you find yourself in a position to pay your mum each month because you're no longer paying your other debts, but the OR won't allow you money to give her. You should really contact the organisations I've given you, so that they can go through the alternatives to going BR with you. I'd say going BR was the right decision for 99% of us here that have done it, but that's in our circumstances. It would be wrong of us to say the same would apply to you in yours.

You can post your SOA in this thread. The SOA is a list of your income, followed by a list of all your outgoings. If you look at the first post in this thread, you'll see the format it takes - just follow that, & we'll advise where necessary, as it's very easy to leave something out by mistake.

As for asking questions, no problem. You may well find some of the answers in previous threads, so it's worth doing a search of the board, but anything you can't find just ask away.

rog2

Personally, I had one small family debt, when I was declared bankrupt. I did NOT include this debt in my forms, but it would not have mattered even if I had, since ALL debts, with very few exceptions such as student loans, are included in bankruptcy whether declared or not.
If, after your bankruptcy period, you decide to repay this money, that is up to you - legally you would have no obligation, but morally you may wish to do so.