Finally made a decision to go bankrupt

millie84

I've been in debt for a few years due to a relationship breakdown. I should really have done this in the very beginning, but I ignored bankruptcy as an option because I am still named on the house with my ex.
Due to my debts, which are around £15k, possibly more, I have a debt management plan. I am managing to pay the small amount each month, but it will take me 20+ years to pay the debts off.
So I have decided that bankruptcy is the best option. I have no assets (except for the house), I live with my partner, but most of the possessions within the house are is. Would I have to provide proof that everything is his? We don't have receipts since he buys a lot of stuff like furniture second hand. I don't want it to affect him at all.
I need to save up the £700 for the bankruptcy fees. I am also attempting (and failing) to save money up to buy myself a vehicle to get to work. Would I be allowed to keep a vehicle if I went bankrupt? It would only be a cheap runaround, and it is something I really need for travelling to work because public transport is very unreliable on my route.
I knew someone who got made bankrupt and I understand they sometimes give you a nil tax code and recover the money later?

National_Debtline

Hi Millie


Answers in bold below.

millie84 wrote: »

I've been in debt for a few years due to a relationship breakdown. I should really have done this in the very beginning, but I ignored bankruptcy as an option because I am still named on the house with my ex.
Due to my debts, which are around £15k, possibly more, I have a debt management plan. I am managing to pay the small amount each month, but it will take me 20+ years to pay the debts off.
So I have decided that bankruptcy is the best option. I have no assets (except for the house), I live with my partner, but most of the possessions within the house are is. Would I have to provide proof that everything is his? We don't have receipts since he buys a lot of stuff like furniture second hand. I don't want it to affect him at all.


You're not expected to have receipts for everything. You will have declared any assets you have when filling in the bankruptcy forms and sworn the contents as true. By and large, the only items classed as "assets" for bankruptcy purposes are houses (see further below) and cars.

I need to save up the £700 for the bankruptcy fees. I am also attempting (and failing) to save money up to buy myself a vehicle to get to work.


I would suggest that you stop your debt management plan payments with immediate effect - once you've decided to go bankrupt this is dead money. Your creditors can't usually do much more than badger you in the meantime.


Would I be allowed to keep a vehicle if I went bankrupt? It would only be a cheap runaround, and it is something I really need for travelling to work because public transport is very unreliable on my route.


Having a car is perfectly feasible in bankruptcy, provided it's not worth any more than it needs to be and that it is fulfilling a reasonable need e.g. commuting to work where there's no suitable alternative.

I knew someone who got made bankrupt and I understand they sometimes give you a nil tax code and recover the money later?


It is standard procedure for your tax code to be set to nil for the remainder of the tax year in which you go bankrupt. Any extra gross pay you receive as a result will be claimed by the Official Receiver (OR) so effectively you won't see any difference from your point of view.


Please note that your employer is not informed of the reason for the change in your tax code, so they do not learn of your bankruptcy as a result of the tax adjustment.

Over and above these questions - what is the value (if any) of your interest in the house you are still named on? If you have made a meaningful contribution towards its purchase and/or subsequent repayments, the OR is likely to take an interest.


Dennis
@natdebtline

millie84

National_Debtline wrote: »

Hi Millie


Answers in bold below.





Over and above these questions - what is the value (if any) of your interest in the house you are still named on? If you have made a meaningful contribution towards its purchase and/or subsequent repayments, the OR is likely to take an interest.


Dennis
@natdebtline

There is around £12k equity in the house, before sale and court costs. I contributed half towards the mortgage for 5 years, there was no deposit.
I am currently struggling to remove myself from the mortgage. My ex is refusing to cooperate with my requests for him to buy me out, and I think he is unable to get a mortgage on his own to release me.
I was going to force the sale , but this may prove impossible for me due to costs. I do need to sort my finances anyway, so my plan is to go bankrupt, then sort the mortgage at a later date. I'd rather be debt free than make a few pounds.
Regarding the DMP, I have just made this months payment, but I will speak to them and probably stop payments as of next month. It will allow me to save for the bankruptcy fee faster if I'm not paying them each month
Public transport is becoming an option which is not viable to me now for commuting to work. My partner has (hopefully) sourced me a car that is almost as old as me, and the insurance is dirt cheap I also sometimes need to transport my OH's son to and from childcare.

skintandfat

millie84 wrote: »

My partner has (hopefully) sourced me a car that is almost as old as me, and the insurance is dirt cheap I also sometimes need to transport my OH's son to and from childcare.

Get your partner to put the car in their name- then if you went BR they would be unable to take it


He would need proof it was his so a payment and receipt would be fine