Received Bankrupcy Petition

JCS1

The default position on this board, and from MSE, is to seek advice from non-profit debt counselling agencies.

http://forums.moneysavingexpert.com/showthread.html?t=356748

As you say, there are some good IP's out there. But too many people have been stung by the less reputable ones.

alastairq

Another reason for potential BRs needing to consult one or more of the Debt charities [aside from the Judge needing to be assured such advice has been sought, on the day?}..is that, the Debt Charities can, and do, negotiate on behalf of the debtor, with various creditors.....with regards to nominal [token] payments, cessation of interest, etc.

This allows, potentially, a breathing space for the debtor....and certainly, token payments are needed to demonstrate a 'willingness-to-pay', should a creditor seek a CCJ?

keen_kat

At this point if hmrc have petitioned, they won't accept anything but full payment if you want the petition dismissed. If you want it adjourned they don't object to the first adjournment, then after that they will make sure you're made bankrupt at the next hearing if satisfactory plan is not in place, ie full payment or an IVA etc etc. They wouldn't even care about you paying little amounts at this point, as the petition has already been issued and a hearing set. To that argument of using the debt line is not even relevant to the OP. The clock is ticking and if he can't have a good plan in place by the time of the hearing to request an adjournment then that will be it. Wasting time with just getting advice from a debt charity is no good in this scenario, because all the while the clock is ticking. He needs clear cut advice on the full facts, whether to go bankrupt of whether to go into an IVA, simple as that. If it is to be an IVA, then time is short if you want it approved prior to the 1st hearing. To get the first adjournment you need to have at least started the ball rolling on the chosen plan. You need good reason to have an adjournment, not just because of "I'm not sure yet what to do"!

michael1983l

When I attempted an IVA it took 6 months to set up. A bit too late for an IVA me thinks too.

alastairq

I agree with keen_cat in the scenario of a creditor petitioning for someone's BAnkruptcy.

But, we generally deal with personal petitions, ie someone petitions their own Bankruptcy...in which case, everything that has been said by others is correct, valid, and appropriate.

From the evidence of this particular forum [which is a large & active one]....personal petitions are more common.....especially in view of the costs to a creditor to seek a petition on a debtor?

However, I would be the first to encourage HMRC, or any creditor, to seek petitions themselves, since it saves the debtor at least £700-odd quid to do the job, which might be inevitable?

With regards to property [as an asset] then BAnkruptcy itself isn't necessarily detrimental.

[As we have seen many times on this very forum?]

However, I am aware that, now the property market seems to have picked up [in certain parts of the country,at least]....values of equity might become more positive?

I do, however, get the sense that this property boom is but smoke & mirrors....with many properties going onto the market round hereabouts....some are sold, but many are not...too many for me to have any faith in the notion of a 'boom'...?

But, this is a digression from the plot.

georgiasmum

thank you keen-kat for your points. very interesting reading.

keen_kat

No problems, I know HMRC behave as I used to be in the very department for bankruptcy petitions and also company winding up petitions. Both of which from my experience, are, if you want it stop or be dismissed at court, you either pay in full or tell them you have an IVA in place. As I said before however, they rarely Object to a first adjournment of the petition (in my time there I never saw a first adjournment objected to and still haven't in my insolvency IP world), but you either need to attend in person to get it, or get counsel there to represent you, stating you are seeking professional advice with a view to getting an IVA. Then by the adjournment second hearing, it is make or break as they won't adjourn it again (if you're lucky and have compelling reasons they might)... they will either adjudge you bankrupt or dismiss the petition if you have the IVA in place and agreed.

Like I have said previously though, you need to take the advice on both aspects... bankruptcy and IVAs to see what's suits the individual the most. if it's bankruptcy, then let hmrc do it, as it's at their cost like Alastair said. The make or break does really boil down to what assets you have to protect, property being the main one, then in which case an IVA is most probably best suited. But if a petition is present, you need to work fast as you are against the clock.

longtermplanner

Yes, most IPs offer free advice. But the problem is that it doesn't always seem to be advice that is in the best interests of the client.

See for example this recent thread https://forums.moneysavingexpert.com/discussion/5018985. If you ignore the red herring of monthly vs 4 weekly debt payments, that story is one where a client whose only income was benefits opted for an IVA. I bet her IP never told her that she would have qualified for a Debt Relief Order.

Just because advice is free, doesn't mean that it's good!

longtermplanner

keen_kat wrote: »

The make or break does really boil down to what assets you have to protect, property being the main one, then in which case an IVA is most probably best suited.

Assests to protect is certainly an important factor. But it is sometimes possible to retain a house in bankruptcy if there is little equity, or even a moderate amount of equity if the house is jointly owned and only one partner has the unmanageable debts.

And if there is a lot of equity, then it may well be better to face up to the situation and sell the house rather than opt for a 5 year IVA with the possibility of a remortgage/ secured loan at the end of it.

alastairq

The problem with an IVA, IMHO, occurs when it fails.

A huge percentage of those who have petitioned BR, have arrived at that point because circumstances changed considerably, and were not/could not be, foreseen.

Those same changes of circumstance can also affect those on an IVA.

The fresh start is inevitably delayed further into the future? [an common observation I have seen on here is, ''if only i had gone BR in the first place??''

Another aspect of IVAs I don't like concern where circumstances of the debtor do change.... any variation in payments are only subject to agreement from the creditors, on the whole. And no guessing as to whose interests they are concerned about?

At least, with Bankruptcy, the BAnkrupt negotiates with the Official Receiver, a Court Officer with no axe to grind, other than to fulfil their obligations.

I ma have a jaundiced view, but I consider IVAs to be 'spawn-of-the-devil?'