help - initial bankruptcy query

nazza4

This form has been invaluable and a brillant source in answering so many of my questions.
Considering bankruptcy and looking advice: here goes my situation in brief:
Debts: (all in my name)
Mortgage: 200,000 (negative equity approx. 70000 – 80000) – This is not family home but an investment property, we are currently renting – so sentiment of losing this noose around my neck has finally passed)
Other debts from credit cards, over draft and loan is approx 20000.

Assets - 20000 (Joint with Husband)

Only other financial link with husband is a joint bank account which is in and out of overdraft.


Gradually debts have built up over the past 7 years, primarily on the back of a bad property investment.
We have just about made all payments thus so far (all interest only) but the stress and strain it is putting on our family life has become unbearable so feel we have to move on with life and can see no way out of this spiral of debt but for bankruptcy. At our present salaries we are borderline keeping our head above water but with two growing children i can see it only getting worse and not much prospect with our jobs with salaries increasing significantly.

I suppose first question is there a high possibility that I wouldn’t be accepted for bankruptcy as I have being able to make payments so far (situation is that if things don’t improve I wont have the support of husband for much longer so bankruptcy wont be an option, it will be inevitable) but this way at least we will still be a family unit.

Secondly, if after professional advice I do decide to go down the bankruptcy route, would stopping payments to mortgage, credit cards, etc look bad to the OR or if we can keep paying to some will it be wasted money ( which I could use towards to bankruptcy fees).

Thirdly, what will the implications be on his credit rating?

For at least 6 years we have be surviving, not living. For my own health and for my family I need to move on and deal with this head-on and get it sorted with some end in sight. Any advice would be so so so much appreciated.

TheGardener

Hi and welcome. First off there is no short cut other than top read all the excellent factsheets in the Welcome post at the top of the board.
Being 'accepted' for BR is a misnomer - you are either solvent - or not - if its the latter, then you can present a petition for BR, the only criteria at that stage is whether the judge is happy that you are fully aware of the implications and that you have sought advice. All the advice you are likely to need is FREE via StepChange, National Debtline who are both excellent - the CAB are variable depending on the expertise that have in any given branch.
If you make a decision to go for BR - stop all payments to all creditors to save for the BR fees.
You need to sever financial links now but I suspect the link will take time to disappear from the CRA's but as you currently have a financial link, his credit score will already be affected by that. He can at least start rebuilding it soon.
Success depends on PLANNING so new basic bank accounts, a secure roof over your head and getting the timing right.:)

alastairq

Hi...as Gardener says.

Next time the joint account is in credit, close it.

For the OP, phone up Co-op bank, and open one or two basic [Cashminder] accounts for yourself. [Do not make mention of Bankruptcy during this process...]

Do this now, thus transferring all your own accounting away from existing creditors.

[Should you petition for Bankruptcy [yourself]...the Co-op Cashminder accounts maintain internet access throughout the Undischarged period]

You mention

Assets - 20000 (Joint with Husband)

?

Is this more property?

nazza4

Thank you all.

Yes the Asset of 20000 is for a site bought about about 7 years ago - it was to be a family home and we resisted the need to sell it in the hope that the property market would improve. Alas this hasn't happened for us and have now resigned myself that this will be lost also.

nazza4

[QUOTE=TheGardener;
Success depends on PLANNING so new basic bank accounts, a secure roof over your head and getting the timing right.:)[/QUOTE]

Going to request application pack tomorrow for new accounts.

Getting the timing right - what is important with regards timing. Sorry if this sounds stupid but am not quite sure what you mean.

TheGardener

nazza4 wrote: »

Getting the timing right - what is important with regards timing. Sorry if this sounds stupid but am not quite sure what you mean.

No such thing as a stupid question

You need your new basic accounts open - all your regular domestic (not debts) DD's set up, pay going into new account etc etc - Although utilities are not often affected, things like you mobile contract might be so make sure you have a PAYG sim incase you lose the mobile contact. You are unlikely to be able to get car insurance by instalments when you renew (but hubby can do that I guess) You wont be able to keep a contract/lease car if they are in your name, if you have your own car and its worth more than £1000 then the OR will claim and give you £1000 back to buy an older motor but only if you need a vehicle to get to work etc...obviously, having your OH is going to make this much easier. It takes a bit of time to get all this organised

alastairq

Getting the timing right

Possibly, getting yourself all set up with basic bank accounts [Co-op or Barclays only], getting all direct debits transferred , sorting out a decent home to live in, getting one's 'ducks-in-a-row' before, going to petition for bankruptcy.

People who find BAnkruptcy difficult, often jump in with both feet [or are pushed?]...then find they have a struggle to get their financial lives sorted.

Given the land asset, it may just be that a creditor might find out, and obtain a Charge on the property?
This is to convert an unsecured debt, into a secured debt.

This [to me] is the only time when obtaining a Bankruptcy Order sooner rather than later, is needed.

Otherwise, once the debtor has come to the decision to petition for BR, then , there is no rush.

The land will probably be sold...your husband will get to keep his share...