Bankruptcy?

humphrey96

Hi All,


My partner and I currently have mortgage (negative equity), secured loan on our property (Firstplus!) and various personal loans / credit. We have been treading water for around ten years paying bills (never missed a payment!) but little else.
The stress and pressure of our finances is beginning to take it's toll and we want to make a fresh start, just ready to hand the keys back to be honest! We think bankruptcy is our only option but are unsure of some aspects and would appreciate some help:


Are their qualifying criteria for bankruptcy? Can an application be rejected?


Do we have to miss payments before applying? How would we do that!?


We are both currently working (although my husband is off with stress) and can just about cover the payments.


Not sure what else to do, it feels like a crushing weight on us:(.


Many Thanks

TheGardener

humphrey96 wrote: »

Are their qualifying criteria for bankruptcy? Can an application be rejected?
You have to confirm you have sought independent advice - StepChange are brill as are National Debt Line - both a free.


Do we have to miss payments before applying? How would we do that!?
No - you don't have to but once you have made the decision, you can stop paying - it usually takes most creditor about 3 months before they really start hounding you. If you need to save up for the BR frees, then stop paying them now. If the call you just tell them you are seeking financial advice.

We are both currently working (although my husband is off with stress) and can just about cover the payments.

You need a break - You need to plan, plan plan, read all the posts on the Welcome sticky post at the top of the board. You need to organise your housing and bank accounts before you go BR. The planning will make it as stress free as possible.

Not sure what else to do, it feels like a crushing weight on us:(.


Many Thanks

Just read everything on the boards - there is a way out you just need to be sure you chose the right one.

humphrey96

Many thanks any other advice is welcome

alastairq

Are their qualifying criteria for bankruptcy? Can an application be rejected?

As you are obviously Insolvent, that is enough. [ie, cannot pay your debts as they fall due?]

Applications for personal BR are rarely rejected...usually on the grounds as mentioned by GArdener..ie the Judge wants to ensure you have understood the implications of Bankruptcy....they don't want people coming back to Court in three weeks time arguing, ''we were never told it would be like this!!''...

Do we have to miss payments before applying? How would we do that!?

It probably is a good idea to stop paying creditors, once you have made up your minds about bankruptcy.

After all, what you pay out [from now on, perhaps?] is 'wasted' money.

It could be put to better use being saved for the BR fees, for example?

Don't mention bankruptcy to anyone [creditor-wise] if that is your intention, it only makes them nervous, and they will hound you even more.

You cease paying to creditors by simply doing exactly that! Stop paying!

Once you have made your decisions about BR, [see above?] it doesn't really matter how much creditors stamp and roar....you will have the trump card in the end.

As agrdener says, plannig beforehand, getting one's ducks-in-a-row, is vitally important.

Things like, opening one or two basic bank accounts with either Co-op, or Barclays [Co-op must be done before the BR petition, as they won't open accounts for Undischarged BR's....].....Barclays will cancel internet access whilst Undischarged, Co-op allow internet access to continue.

Currently, no other High St banks are BR-tolerant.

If you wish to leave your present home, then find somewhere to rent that you both are happy with...then move! Do this well before you get to the BR petition stage [there is no rush]

Advice, aside from the above, can really only be given, if specific questions need answering, and this is the best place to start.

Plus, again, as Gardener says, get onto either Stepchange, or NDL [or CAB if you prefer] for that all-important free advice!

alastairq

Oh, I forgot.....since Bankruptcy is an individual petition, will you both need to petition BR? [Are you both on the mortgage, for example?}

WHo is the account holder for your unsecured debts?

tigerfeet2006

If you want the house to be repossessed then stop paying the mortgage and secured loan as well as the other debts. Save this money for your rental deposit, rent, moving costs and BR fees.

Find a rental property and move in and then look at going BR.

As the others say get advice from the recommended charities, read the stickies, read every thread you can (even if you think it doesn't apply to you, read it any way), ask questions, read, read, get you ducks in a row, ask questions and read even more. Preparation is the name of the game once that BR decision has been made. Take your time, there is no hurry, just make sure you are as prepared as you can be. Believe me you will be thankful for it in the end.

humphrey96

Both the mortgage and secured loan are joint but we have personal loans in our own name, so I guess an individual petition each!


This may sound silly but how do we stop paying? Can we cancel direct debits to our creditors or do we just withdraw funds from our current account? I suppose we're just afraid for when the letters and phone calls begin!!


Again, thanks for the advice and we'll continue to browse this excellent site and start planning.

alastairq

You cease paying by...ceasing to pay.

Cancel Direct debits.....close your bank accounts, [or, take out all monies, stop any monies going in too] but open one or two basic accounts each, with either Co-op [Cashminder, do not mention BR!!!]...or Barclays.

What I am advising here is...shift your money away from existing accounts, allowing these to go dormant..they will attract charges, but that is irrelevant.

Letters and phone calls are inevitable.

Buy a couple of PAYG mobiles, giving the number only to friends & family...then switch off the land line?

Or, simply, write to each creditor, stating you will only communicate by letter?

TheGardener

First thing tomorrow get down to Barclays (if they are not a creditor) or the co-op and open a couple of basic account - specifically ask for basic account - not just simple current accounts). Then move your income to those accounts. Once you've done that just cancel all the DDs on the old account. If the old account has an overdraft just leave it all.
But you must be prepared for the phone calls - hang up when they ring or just say you are 'switching' banks - I did that and it bought me about 6 weeks time before anyone realized what I was doing and by then it was too late - I'd gone BR

Start looking for somewhere to live now - it doesn't need to be the cheapest you can find - just reasonable for your needs (no penthouses) with a fairly average local rent.

Cant stress enough how important it is to plan and get organised first.

humphrey96

Hi All,


Just completed the Step Change Debt Remedy questionnaire and their advice is to follow a monthly payment arrangement, paying more on each debt if possible!!! We have zero spare cash at the moment and are scared every time a car mot comes round or other unexpected bill.


Do we have to take this advice or can we just press on with the bankruptcy petitions? Will it look bad if we ignore it?


Thanks again

egrescrimp

humphrey96 wrote: »

Hi All,


Just completed the Step Change Debt Remedy questionnaire and their advice is to follow a monthly payment arrangement, paying more on each debt if possible!!! We have zero spare cash at the moment and are scared every time a car mot comes round or other unexpected bill.


Do we have to take this advice or can we just press on with the bankruptcy petitions? Will it look bad if we ignore it?


Thanks again

It's probably best to actually pick up the phone and make an appointment with one of their advisors, they can discuss other options with you and go over everything.

Just because their tool says a management plan, doesn't mean you need to take that route. The main part that judge wants to see is that you've taken advice, you can follow what stepchange have said or take your own route and go bankrupt.

Their tool is probably saying a management plan due to you having a mortgage and secured loan.