Went Bankrupt, this is what happened

michael1983l

For all those worried about going bankrupt I thought I would tell you how my day in court went. I finally got declared bankrupt yesterday, although I am confused as to why I am not on the register yet.

Well I turned up to court with my papers in hand, first thing at 0830. I was surprised to be sent up to see the Clerk with my paperwork with another person who was doing the process at the same time. The lady who was with me went first, a bit strange because her case was discussed in front of me, then it was my turn. I handed her the 3 copies of the forms and my fee, the clerk who was very nice and none judgemental then checked the forms and said I had crossed out the wrong lines on the petition, she said it was ok and went away and got me new forms and did it for me.

The Clerk then said she was going away to prepare my papers and present them to a judge and would be about 30 mins. I expected to be brought before the judge and scolded because I had been gambling which contributed towards being in this position. However the Clerk came back 20 minutes later and called me to the desk and just said the judge has agreed to the order, you are now bankrupt and handed me a letter with my bankruptcy number on, told me to read the instructions about the official receiver, said they would call between 2pm and 4pm and sent me on my merry way.

The whole process took 30 minutes.

2 hours later at about midday I receive a call from a softly spoken lady who was very polite who advised me she was the official receiver. She asked for my bank details, asked me what my balance was and told me I would be sent a letter through the post ready for my interview.

She then asked if I had any question, which I did because I had a few abnormal situations I wanted to discuss with her.

First of all I have a company car which is salary sacrifice, because I work out of hours shifts I asked if I was ok to keep it. She asked how much I pay a month, which is 225 and she said it is not excessive so would be allowed to keep.

I was also worried because I had a loan to my parents, which I had been regularly paying for 4.5 years, whilst not paying other creditors. I said I had only paid them the amount it costs them in a loan and had now ceased to pay them, she said not to worry about it.

I also recently increased my child maintenance as I had been paying my ex less than what the government website states, she said fine as long as I am paying correct amount which had gone from 300 to 545 a month. She was happy with this.

I also said I wanted to start contributing more to my pension as I had never been able to afford to before. She asked me how much, I was worried about asking for 5% which amounts to about £100 a month but she said it was not excessive and that I was allowed.

The thing about this is that the increase in pension payment neutralises my spare income meaning I should not be placed under an IPA/O

All in all, I was surprised about how easy the process was and how lenient they are with the budgets.

So those of you worried about going BR, please don't be because of my experience it is absolutely nothing to be worried about at all.

fermi

michael1983l wrote: »

although I am confused as to why I am not on the register yet.

If it's the same as it used to be, then it requires someone at the OR's to enter the case details and update. Usually happens within a day or so, but could perhaps be a touch longer if backlogged.

Rrushi_Shqiptar

Glad it went well for you, I know you have been worried about it for a while. Here is to a new start. :beer:

longtermplanner

Thanks for the detailed update.

michael1983l

Just a quick update, I have now been added to the insolvency register as of last night.

arcon5

Adding to your pension? I thought any pension put up to the date of BR was considered an asset of the state and due to the receiver........

As for allowing payments to a pension scheme which would wipe out an IPA, well that just seems fundamentally flawed to me. Like paying spare cash to a savings account instead of the receivers office

michael1983l

Regards the pension being an asset, the law was changed in recent years where they can no longer obtain cash through your pension unless there was excessive payments made in the previous 2 years to going BR.

As for the pension saving, as long as it is not excessive it is seen as a essential payment as per the insolvency website. It is the rules, so I will stick to them.

tomtontom

michael1983l wrote: »

Regards the pension being an asset, the law was changed in recent years where they can no longer obtain cash through your pension unless there was excessive payments made in the previous 2 years to going BR.

As for the pension saving, as long as it is not excessive it is seen as a essential payment as per the insolvency website. It is the rules, so I will stick to them.

Stick to the rules, or play them? It is such a shame when people manipulate the system, makes it harder for all those genuinely in difficulty.

michael1983l

Apart from fraudsters, everyone who goes bankrupt is in genuine difficulty, it is not something taken lightly. I have no glamorous lifestyle and I do not really own any assets. I have a 17" TV, not curtains or curtain poles in my front room, hardly any kitchen utensils, no computer, no electronic devices and a very cheap mobile phone.

I am hardly taking the mickey out of them.

The public sector pay 7% of their salary by default into their pension so asking for 5% is hardly taking the !!!! is it. The government allow this type of payment as it is in their benefit for me to continue paying into a pension, so I am not reliant on the state when I retire.

So you call it what you want. The rules are there and I am doing nothing wrong.

alastairq

Stick to the rules, or play them? It is such a shame when people manipulate the system, makes it harder for all those genuinely in difficult

In what way?

Everybody on this forum, [pretty much?] operates within the rules. If the rules allow certain actions, then so be it.

It is not for any of us to pass judgment on what rules should be followed, and what not.

If the finance industry, as an example, make full use of the rules, such as they are...to their own advantage, then why not Bankrupts?

The only people to be disadvantaged are those who don't take the time to find out, or seek advice, as to what the rules really state [rather than, what some folk think they state, or think they ought to state?}

debtinfo

I would also agree that paying a reasonable amount into a pension is not "playing the rules". it is a normal part of an average persons pay structure and something that the government is trying to encourage for the average person.