Annulling a bankruptcy

Mairiphinc

Hi, I was made bankrupt in 2008 and have now been off the register for nearly a year, my situation now as opposed to pre-bankruptcy is very different, I had just lost my job pre-bankruptcy and had no back up in the way of family. My bankruptcy was stuck in the ridiculous middle ground at the time where I didn't owe enough to get an IVA but too much to pay off. At the time I was advised by CCCS (now Stepchange) that my best option was bankruptcy.

I used the freedom that bankruptcy gave me to go back to uni, get a professional qualification and a much better job. Although I'm not quite there yet, I do hope to soon be able to save significant amounts of money.

But the bankruptcy is still hanging over me in terms of mortgage applications, good credit etc. I would like to clear it once and for all. I only owed around £9500 so from where I'm standing now it wouldn't be impossible to fix.

Is it worth annulling/paying off in full if I can? Would I need legal advice to do it or could I represent myself?

Has anyone done this?

For purely moral reasons I feel that if i am able to pay it soon then I should try to.

Thanks,

Marie

TheGardener

My understanding is that the IS/OR's fees and charges will mean the amount will be much MUCH more than the original debt.
Given you are now past the 6 years mark - assuming all CRF have been cleaned correctly and you have saved for a good deposit - and use a 'whole of market' broker there is no reason that you will not be able to get a mortgage anyway.
Technically of course - there is no debt to repay.

alastairq

Back in 2008, with such a low amount of debt, a DRO would have been an option. Unless you had property?

I cannot understand why you didn't owe enough for an IVA? Different IPs have different lower limits.

Your BR is no longer on your credit file. However, as Gardener says, have you cleaned up your files?

These days, there are many factors which can inhibit getting a mortgage...most of which have nothing to do with a past bankruptcy.

Mairiphinc

I took advice from CCCS which I think may have been slightly wrong, however I wasn't as informed then as I am now. My understanding was that an IVA in 2008 required £10k of debt.

My files are totally clean, but as most banks ask if you've 'ever' been bankrupt, it still has an effect. I imagine it would still cost me less to pay off the debt than to save a 40/50% mortgage anyway.

I had no assets when I went bankrupt so I am hoping the OR fees wouldn't be massive as they didn't have to do a great deal.

debt_doctor

Hi,

My mortgage provider asked me "have you ever had a problem paying your debts" - which is a far wider scope than bankruptcy!
I had a BR 8 years previously, and they (The Halifax) were not interested in the BR, they just said ..."that was a long time ago..."
What they were extremely interested in was my Experian credit score showed at least 'good' - which I think is around the 900 points mark.

I'm pretty much with The Gardener on this one.

As regards costs - the minimum cost (over and above paying creditors in full and potentially interest) there will always be the Case management fee of £1715.00.

DD

DD

TBagpuss

also - even if you now cleared all the old debt, I do not think this would result in 'annulling' the bankruptcy - the bankruptcy was valid when it was made. I think an annulment would relate to a situation where a bankruptcy was made in error - for instance if you had been told you owed £50,000 and it turned out to be a banking error and the correct figure was £5,000, so you had never been insolvent.

I think you are likely to be better off focusing on rebuilding your credit, saving for a larger deposit and then shopping around with your broker.

I admire your moral stance in wishing to clear any debts - and if any of your debts were to private individuals then I would still try to repay them,. For bigger organisations you might find it was hard for them, administratively, to deal with payment of a written off debt.

debtinfo

There are 2 main provisions for annulling a bankruptcy in the Insolvency Act. One is where the order ought not to have been made. The other is where the debtor has either paid all of the creditors (and expenses of the bankruptcy) or secured the debt to the satisfaction of the court

TheGardener

Mairiphinc wrote: »

... but as most banks ask if you've 'ever' been bankrupt, it still has an effect. I imagine it would still cost me less to pay off the debt than to save a 40/50% mortgage anyway.

Most on here advise not going direct to banks - use a 'whole of market' mortgage broker instead.