Cash on hand when you go bankrupt

Flask_of_tea_in_the_car

Hi all,

Looks like our business is going to have to close and we will need to go bankrupt.

Husband is going to start looking for a job but in the meantime I wanted to ensure we had 2 months of income in our bank account - this will be about £4200 (family of 6 and rent @£900 a month)

Just wondered how the OR is likely to view this and what other people have been allowed to keep for living on...

Obviously if he finds a job quickly we are expecting the OR to take any remaining

Thanks

TheGardener

That is a lot of cash - your main issue will be whether the account is closed, at best it may be temporarily frozen. Is the account a basic account? Do you have debts with this bank?

Is it possible to pre pay the rent for 2 months - the OR will allow you to have sufficient money for everyday expenses if they can be clearly evidenced but don't bank in them letting you keep all the cash.

Abitdown

As above, one of the key things to do is get a basic account sorted out. You will also need to draw enough in cash to cover immediate living expenses in the event that the account is frozen for a period of time. I withdrew enough to cover me for 4 weeks, which basically happened to be everything in the account. I didn't actually include this on my SOA as I read somewhere that this cash would not be considered an asset as it was for basic living expenses. I did however declare it to the examiner during the initial contact and also again at the interview.


I won't offer any advice on how much of that £4,200 you will be allowed to keep as I have no idea of the criteria the OR work to, but what I did find in my case was that my examiner was reasonable and accepted my justification without question.

A4445

I took about £800 in cash out of my bank, just in case the basic account was frozen. The OR didn't seem to have an issue with this.

National_Debtline

Hi Flask...


There isn't a set cash figure that the OR will disregard - it's just a matter of what they consider reasonable to meet your immediate domestic needs. It's best just to be prepared to explain your rationale in case they ask you.


I doubt though that the OR would let you prepay on the rent over and above the strict requirements of your tenancy agreement.


Dennis
@natdebtline

Cobalt77

Flask,

Before doing anything else, your best bet is to prepare your statement of affairs (i.e. monthly income and expenditure) and post it here for comments.

You'll need to do this anyway at some point, and it will soon be evident whether keeping £4,200 in cash is potentially viable.

You can use this online form here to help you: http://www.stoozing.com/calculator/soa.php

Once done, post your results and everyone will then be able to help you further.

HTH

dancingfairy

I would start by talking to business debtline. They should be able to help with the business side of things and then pass you on to national debtline for the person al debt side of things once you know what your personal liabilities are likely to be as a result of the failed business.
Good luck
Df

Flask_of_tea_in_the_car

Thanks everyone!

We are already using a basic account as we were going to go down the IVA route originally but things changed.

I will take advice and withdraw cash the day we go to court in readiness for the OR taking over... Bit concerned this will clash with rent day etc... But guess we just have to see..

Our rent is high so we have given notice and will be moving in the next month - we are being sensible with what we have in the bank and I am noting down what I am withdrawing cash for to pass on to the OR.

We did a budget for the IVA - it's pretty basic really but yes I will post it here when I get a moment.

Thing is for now we have basically zero income and husband will be claiming JSA in the next month so we will hardly be rolling in it!

Not fussed if we are allowed to keep money in the bank as more concerned if it was "allowed" whilst we found a new source of income (is sorted benefits until job comes along).

Hope as it is a basic account that we have only had for a month that they don't freeze it for long!

dancingfairy

If it's a basic one thats been recommended on here it should be fine. It's not the official receiver that freezes the accounts. The official receiver will notify the bank that the account can be kept. Some banks don't like bankrupts and will close the account but that is the banks own terms and conditions, not the official receivers doing.
I'll be honest I've not heard of an official receiver freezing an account. I guess they can if there's a substantial amount of csdh in there but its not something ice come across.
Who's the account with? Someone on here can probat share their experience with that bank.
Df

dancingfairy

Why not get a job/ sort out benefits and them go bankrupt? Surely that would be a less stressful way of doing things?
Df

Flask_of_tea_in_the_car

Hi all - thanks for your comments...

So hubby has a job Starting end of Feb.

The money in the account has already gone down quite a bit due to normal living expenses and rent etc...

We will need to save a certain amount from it to pay for the BR etc and I will need to use some for the new house deposit but we will then get the other deposit back.

We have FLEXBASIC accounts with Nationwide... Will the Bank likely freeze them??

So the OR just looks at the account and decides if they need to take money from it?

Do they let you keep funds in it to pay your living expenses or is it as says above that they will see all of the balance as an asset and expect to take it all?

Thank you!