Going Slightly Mad

Tafy1978

Hi All,

Apologies in advance if this post seems repeated or the answers are already on the forum. I am in a place at the moment where the more I read the more confused I get!

My situation is as follows -

1. I have previously (2003) been made bankrupt and am more than likely about to go down the same route.
2. I am married with one young child.
3. My debts unsecured are around £27,000 and my secured debt (car) is around £16000.
4. My monthly outgoings are (jointly, including utilities) around £4000 and mine alone count for £3300 of this.
5. I am literally moving money one month to the next to get the bills paid and I am only managing to do so because of work expenses (mileage), but this has now been reduced from next month drastically and will put me in a very difficult, almost impossible financial predicament.

My concerns on going bankrupt are:

1. My car is on HP and has 2 years remaining. I need this car or a car to do my job. Given its worth, I am working on the assumption that the OR will take it off me. How will I fare on doing my job if this happened?
2. If I do end up going BR, I will more than likely have a decent amount of excess funds remaining, will the OR deduct monies directly from my salary? This would cause me huge issues as I work for a financial company.
3. I only share a joint account with my wife and she isnt looking to go bankrupt. However, she also has some assets (car) that she is paying through HP, would this be considered as part of my assets?
4. Lastly, on my wife, how will she be effected by me going bankrupt?

Something else I just though of, is it worth stopping my current direct debits as I, at the moment, have no way of saving for the possible BR fee?

It is highly likely that due to these debts and this position I have put both myself and my family in, that my wife and I will separate shortly.

I thank you in advance for any help or advice you are able to give.

alastairq

Hi, and welcome.

Firstly, you mention you work within the financial sector?

Do you hold a post for which BAnkruptcy is not allowed? [If you are unsure, check ASAP with your HR dept.?}

If this is the case, your options may be an IVA...or a DMP.

[1]...The car belongs to the HP company, so is not your asset. If the payment schedule is deemed reasonable by the OR, you may be allowed to continue....which is also subject to the HP company agreeing, as well.

Since you appear to have a good case for a car being 'exempted-as-an-asset'....then you would be allowed to retain a car, but its value must be no more than circa £1000.

[2] If there is a surplus of income [yours alone]...then the OR will seek an IPA. Should this be agreed, then it will run for 3 years from inception, [and subject to variation in amount should your circumstances change during this period] and is not deducted directly from your salary [unless a Court orders it to be so]....

[3] It is best for both parties to sever financial inks...close the joint account, open up individual accounts.. You would only be allowed basic bank accounts..currently, the only two BR-tolerant banks are Co-op and Barclays.

Co-op needs to be opened prior to the BR petition....but they allow retention of internet access [CAshminder accounts]...[whilst Undischarged]

Barclays will open an account or two, after the date of petition [whilst Undischarged]...but will not allow internet access for this period [1 year]

Your wife's assets are not yours, so are not involved with your BR..

[4] It is likely the relief from the debt burden may make things easier?

You don't mention whether you have a mortgaged property, or rent?

If the former, this will be affected by a Bankruptcy.

Tafy1978

Thank you for your reply alastairq, much appreciated.

There isn't anything in my contract about going bankrupt, however, you cannot join the company if you are bankrupt, if that makes sense? My concern arises from if the IPA figure was to be directly taken from my salary, it would undoubtedly be frowned upon.

I am currently renting a property and have no secured credit aside from the car.

Regarding the car, given the value will be more than the £1000 do you think the OR will allow me to purchase one or would it be prudent to do that now?

I have opened a Barclay's account but I have just noticed that it is a current account and not a cash card one. I am assuming that I can downgrade that account easily?

Do you know how strict the OR is with additional income remaining? I read that it can by 100% of the remaining excess monies you have?

Thanks again for your reply.

National_Debtline

Hi Tafy1978 and welcome to the forum.


It's not clear whether you have already sought advice elsewhere on your specific situation, but I definitely recommend it. There may be more options here than a simple choice between maintaining your payments and going bankrupt. alastairq refers to debt-management plans (DMP) and individual voluntary arrangements (IVA). These have various advantages over bankruptcy if you're trying to avoid doing anything too drastic.


First of all, you need to check with your employer how/if bankruptcy would affect your job, as alastair suggests. Not all roles in the financial industry are equally affected.


It's worth having a read of our bankruptcy fact sheet if you haven't already done so:


https://www.nationaldebtline.org/EW/factsheets/Pages/01%20EW%20Bankruptcy/Default.aspx (covers England and Wales)


Dennis
@natdebtline

National_Debtline

Hi again


Cross-posted with your last post so didn't see this extra info at the time.

Tafy1978 wrote: »

Thank you for your reply alastairq, much appreciated.

There isn't anything in my contract about going bankrupt, however, you cannot join the company if you are bankrupt, if that makes sense? My concern arises from if the IPA figure was to be directly taken from my salary, it would undoubtedly be frowned upon.

It's not normally the case for a salary deduction to be necessary for an IPA unless you are failing to pay the required amounts voluntarily. It shouldn't really make much difference to the employer in practice - if bankruptcy is an issue for them, it's an issue whether their payroll department is having to process a salary deduction or not, if that makes sense.

Tafy1978 wrote: »

I am currently renting a property and have no secured credit aside from the car.

Regarding the car, given the value will be more than the £1000 do you think the OR will allow me to purchase one or would it be prudent to do that now?

The OR can allow you to run and maintain a car worth in excess of that limit if circumstances require it. If you have to clock up a lot of mileage in order to earn your living (and thereby pay into an IPA), for example, they can allow some flexibility in this department.

Tafy1978 wrote: »

I have opened a Barclay's account but I have just noticed that it is a current account and not a cash card one. I am assuming that I can downgrade that account easily?

Yes, you should be able to ask for a downgrade without difficulty.

Tafy1978 wrote: »

Do you know how strict the OR is with additional income remaining? I read that it can by 100% of the remaining excess monies you have?

Thanks again for your reply.

The OR may disregard a very small portion of any disposable income but will generally look to recover as much as is reasonably possible.




Dennis
@natdebtline

Depth_Charge

Hi


Very useful information on Income Payment Agreements & Orders from Citizens Advice (includes a calculator)


https://nedcab.cabmoney.org.uk/ipaipo.asp


The name of the game is reasonable living costs at the outset and not continued struggle after bankruptcy and don't forget the O/R examiners can be challenged they are not the law


DC

Tafy1978

Thank you all for your help and advice. It blows me away, hugely appreciated.

I will look into it all and come back if that's ok?

Depth_Charge

Tafy1978 wrote: »

Thank you all for your help and advice. It blows me away, hugely appreciated.

I will look into it all and come back if that's ok?

Hi

Just to add

If you have not already looked the link below will lead you to wealth of information on bankruptcy

https://forums.moneysavingexpert.com/discussion/1056083

Come back any time, the support on here is up there with the best

Best Wishes

DC

tigerfeet2006

Welcome to the board.

Just to add to the excellent advice you've had so far I would like to add it is very, very unlikely that the HP firm will let you keep the car even if the OR ok's the payments. If youdecide to go down the BR route then I would stop all HP payments and buy a car for around £1k to £1500k,

Please get advice from someone like National Debtline as your petition may be refused if you haven't had advice.

If you want to post your SoA then the folk can give you an idea how an OR may look at it.

http://www.stoozing.com/calculator/soa.php

Tafy1978

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 0
Monthly Income Details
Monthly income after tax................ 2500
Partners monthly income after tax....... 800
Benefits................................ 80
Other income............................ 0
Total monthly income.................... 3380
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 309
Rent.................................... 840
Management charge (leasehold property).. 0
Council tax............................. 114
Electricity............................. 77
Gas..................................... 77
Oil..................................... 0
Water rates............................. 33
Telephone (land line)................... 26
Mobile phone............................ 30
TV Licence.............................. 13
Satellite/Cable TV...................... 47
Internet Services....................... 26
Groceries etc. ......................... 150
Clothing................................ 40
Petrol/diesel........................... 100
Road tax................................ 12
Car Insurance........................... 66
Car maintenance (including MOT)......... 40
Car parking............................. 40
Other travel............................ 0
Childcare/nursery....................... 286
Other child related expenses............ 45
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 35
Buildings insurance..................... 0
Contents insurance...................... 18
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 20
Entertainment........................... 25
Holiday................................. 100
Emergency fund.......................... 0
Total monthly expenses.................. 2629

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 16000....(309)......5.9
Total secured & HP debts...... 16000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
American Express...............3000......0.........18.7
American Express...............3000......0.........15.9
Barclaycard....................3000......0.........19.9
Barclaycard....................2800......0.........19.9
Tesco..........................1800......0.........18.9
MBNA...........................10500.....0.........17.9
Capitol One....................1000......0.........34.9
Total unsecured debts..........25100.....0.........-

Monthly Budget Summary
Total monthly income.................... 3,380
Expenses (including HP & secured debts). 2,629
Available for debt repayments........... 751
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 751
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -16,000
Total Unsecured debt.................... -25,100
Net Assets.............................. -41,100
Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using other browser.

Tafy1978

Hi All,


I have completed the SOA calculator the most accurate I can. I would appreciate any feedback if you can please.


A point to note that I have included my wife's income on this but she has since moved out of the martial home and therefore the above will obviously change if it stays like this. Consequently the figure for child maintenance will also change too, although I have no idea what this looks like at the moment and its all quite fresh.


I'm really beginning to think it may be a good idea to cancel my current direct debits to allow me to get the money needed for bankruptcy and possibly purchase a cheap vehicle to allow me to keep earning money.


Also the above does include my wife's wages but doesn't include her bills which come to around £600 per month.