Some Bankruptcy Questions From A Homeowner

mej24

I finally yesterday that I actually really need to try and get my life sorted out and get out of this mess I'm in. Without going into full detail I currently own a house and have a mortgage and secured loan against it (there is probably very little or no equity in the house) and also a massive amount of credit card debt.

My current incomings do not in any way meet my outgoings (even minimum payments) and after a fair bit of research over the last couple of days I think bankruptcy is the way to go, but have a few questions.

1) Can I be refused bankruptcy? Part of me expects the OR to say 'its your own bloody fault, deal with it'?

2) I know I am going to lose my house but how quickly does this happen? Will it be a case of move out immediately, or do they say you've got a month/ 6 weeks etc?

3) What about my car? I use it to get to work, but would I lose it? Its nothing flash, probably worth £3-4k at best

4) Assets - I know you have to give a list, but to what detail do you go? eg Do I have to itemise every CD I own? Or does someone come and do an inventory of your house?

5) I'm planning on doing it all myself, filling the forms in etc, taking it to court etc. Is this wise, or are there too many technicalities and should I use a third party?


Sorry if theyre stupid questions, just couldnt see those particular answers anywhere.

Lizzibuff

The best thing to do, is get some detailed advice. People like the credit counselling service, national debtline - these people will talk you through you options and because they are free are looking for whats best for you without trying to push you into an arrangement that they will profit from.

You can apply for bankruptcy yourself and technically you can be refused - although this is unlikely - read thru some of the other threads too as many questions you are asking have also been asked by others. so that may give you a good start.

Re - assets - i was told by CCCS (consumer credit counselling service) that only items valued at over 750.00 will be classed as an assett and basic things you need to run your home will not be included.

Im sure as well that other far more experienced and knowledgeable posters will be along shortly to help and advise too.

Well done for taking the first steps to sorting out a fresh start!

Lizzibuff

http://forums.moneysavingexpert.com/showthread.html?t=537466

One thread you might find helpful

mej24

Thanks for the kind words, feeling quite stressed at the mo, but also hopeful that I'm finally going to get things sorted.

Lizzibuff

I'm sure you'll be fine - there's loads of really nice people on here that can help, advise and support you.

Try finding a thread with posts from fermi - on his signature is a load of info about free professional advice, it may even include phone no's. you will be asked if you have taken up this advice so its prob best to do that sooner rather than later - you might find it clears your head a bit and calms you down.

I was feeling very stressed before i joined this site as i'd heard lots of horrid rumours but various people on here calmed my nerves and put things back into perspective for me - i'm sure they'll be able to do the same for you.

fermi

Thats a lot of questions.

mej24 wrote: »

1) Can I be refused bankruptcy? Part of me expects the OR to say 'its your own bloody fault, deal with it'?

Doesn't happen very often. As long as the judge is sure that you owe enough, have taken professional advice, and that an alternate solution is not greatly preferable, they will grant the order.

2) I know I am going to lose my house but how quickly does this happen? Will it be a case of move out immediately, or do they say you've got a month/ 6 weeks etc?

You won't necessarily lose your home. If you have negative or zero equity, you may even be able to buy back the 'Beneficial Interest' for £1 plus legal fees from the OR/Trustee. Even with some real equity you can still get a partner or relative to buy it back from the OR and save the house, but it will cost them a fair price.

See: What will happen to my home

3) What about my car? I use it to get to work, but would I lose it? Its nothing flash, probably worth £3-4k at best

See: Cars and Bankruptcy.

4) Assets - I know you have to give a list, but to what detail do you go? eg Do I have to itemise every CD I own? Or does someone come and do an inventory of your house?

The only assets you need to itemise are ones of real value. Things like antiques, expensive paintings, High end plasma TV's etc. Normal household goods are either exempt property or not worth listing or the OR's time. No-one will come to your house.

5) I'm planning on doing it all myself, filling the forms in etc, taking it to court etc. Is this wise, or are there too many technicalities and should I use a third party?

No need to pay anyone. With the free help of the organisations in my signature, and forums like this you can do it all yourself.

Sorry if theyre stupid questions, just couldnt see those particular answers anywhere.

Not stupid at all.

Another important thing to stress is please get some professional advice from one of the organisations in my signature. One of the main questions the judge asks before they will grant the BR is "Have you sought professional advice?".

Hope that helps, and please keep asking any questions you have.:)

mej24

Thanks fermi.

I'm sure I'll lose my house, even with just my mortgage & secured loan I will struggle to make ends meet now. I've pretty much accepted that, I just wondered how soon it all happened usually

Conor_3

Well you're struggling now but would you be struggling to pay the mortgage and secured loan if you didn't have all the other debts (credit cards etc) to pay?

If you can manage to meet the SL/mortgage payments, then you keep your house unless there's equity in it in which case the OR can order a sale if you don't secure the OR's interest (either your partner buying their interest or you raising it through remortgaging) . If there's no equity in it, you'll still need to secure the ORs interest to prevent a sale being forced in the future but it will be a flat fee they charge.

mej24

Yeah, even without the other debts I'll struggle to meet the SL/mortgage at the moment.

simplesibbo

Hi

My experience was this:

1. If you obviously owe a lot and can't pay, they'll grant the order. But they will ask if you've considered other options and sought professional advice - which you should do. I found the CCCS very useful.

2. I lost my house, as I knew I would - you can agree to leaving voluntarily, just by signing a form and they give you a date to move out by, or you can wait until they get a court order - again, they give you time and it takes time to get the order. I went bankrupt in October and moved out (voluntarily) at the beginning of February if that helps...

3. If your car isn't a flash motor and you need it for work, they will probably not be interested. They asked me what I thought it was worth, I told them and gave them it's year and they let me keep it - it saves them hassle as they would need to make money available to you to get transport to work if they took it off you.

4. Assets: they asked if I had any antiques or expensive paintings; that was it.

5. I did it all myself - but phoned the CCCS with a couple of questions - though if I'd known about this website and forum then, I would have used this - it's great.

They're perfectly normal questions!

Hope this helps - all the best. It won't be as bad as you think it will be - in my experience anyway - and I owed many, many thousands. It gets a lot, lot better...

debt_doctor

Excellent post by Fermi

Best wishes