Advice on bankruptcy please! Very scared!

Kerry511

I am a mother to 5 children and I am married. We live in London. To cut a long story short due to financial difficulties and being in a joint dmp with my husband for 4 years we are no closer to paying off our debt (£70,000)
I have recently become a stay at home mum and my husband works earning £500 per week and we receive child benefit £75 per week and tax credits £27 per week
How would bankruptcy work in our case? Do we file together? Or separately? We have no assets only a car that my husband uses to get to work and kids to schools!
Some debts are joint like the mortgage shortfall and some are seperate to each of us which we had taken out before getting together........ Husband is only the father to my 2 youngest children and since being together his income was used when I made a claim for benefits (he had to use him income to support us) there for we have less money together than we had before we met! Which led to us not being able to afford the credit agreements we made when single!

How would an ipa work will it do a joint income/expenditure as I have no income and my husband supports us? Just to clarity we both want to go bankrupt.

Sorry if I am not making much sense but I feel we are in a never ending battle!

Any help would be greatly appreciated!

Kerry511

This is the first time I have used this site. Sorry if I have posted in the wrong place..... X

fermi

Welcome.

Applications are separate, 1 each. There will be a new online application from April (if they sort it by then) meaning it no longer involves going to court.

How much is the car worth? Parkers guide type price.

Can't imagine for one second that on a single income of £500 per month, topped up with benefits that there would be any IPA at all.

Have you taken some professional advice from a charity etc? That is essential.

See this link ---> http://www.moneysavingexpert.com/loans/debt-help-plan#help

National_Debtline

Fermi has given some great tips above. As a few other pointers I would highlight that when you go bankrupt it is quite likely they will want to see a household budget plan at some point to check the bills are being shared proportionately. If you are named on the child benefit and tax credit claim then that will be considered part of your income. An IPA is only applicable is the individual has more than £20pcm disposable income after your living costs. If you don't then an IPA won't be put in place.


If you both go bankrupt then all of the debts will be cleared - joint and sole debts. You mentioned that one debt is a mortgage shortfall so I would suggest you are very careful about what you sign after you go bankrupt. The former mortgage lender may contact you and ask you to sign a 'Deed of Acknowledgement' - this would mean you accept liability for the debt irrespective of the bankruptcy - do not sign it. Contact one of the free debt charities for more detailed advice and good luck,


Laura
@natdebtline

fermi

I should add that the £20 disposable income threshold for an IPA, is earned or non-benefit income. Can't be claimed, even if you are in surplus if your personal income is just benefits.

So an IPA is impossible for you if you are just on benefits, and staggeringly unlikely for him if his income is just £500 per month which is supporting the family.

Kerry511

The car is 10 years old and worth about £1700. My husbands income is £500 per week not per month. Also I have taken advice from pay plan as I currently pay them through my dmp. We have currently paid £5000 back to our creditors over the 4 years.Child benefit and tax credits claims are in my name.
We still have a little disposable income per month which we pay our dmp but out goings will go up in the coming months as I have just had a baby and smp will stop in May and I am not returning to work!
So as I only get benefits does that mean I will have no ipa but my husband will (both going bankrupt) as he is the one working?
Thank you so much for your replies! It feels so good to talk to some others than understand what I am trying to ask!

Kerry511

Also if I have gambled in the past (about 1 year ago) should I declare this? Will they find out about it? Like my bank statements (assuming they only ask for 6 months) I never took out any credit to pay for gambling I used my wages when I was working......... I was in debt before I started gambling! Silly really as I though a big win could pay it all off! Sounds so silly now I know!

fermi

If the car is essential rather than just necessary, they may want you to get a cheaper one. Sounds daft, but now they normally only allow one at about £1000.

£500 per week. Sorry, I misread.

YOU still couldn't have an IPA, but he might if he has spare after costs.

They can ask for a year or more statements, getting them from the bank if you don't have them. Gambling may come up, but more likely it won't unless it was truly excessive.

Kerry511

Well my gambling lasted for about 3 years! I normally lost more than I won! And in total spent about £15,000 over the 3 years! My husband had no idea until I told him everything 12 months ago and we just cried!!
But got help and stopped about 12 months ago!
What will happen if I tell them? I am terrified but something has to be done!
How long will ipa last

Thank you so much for your advice xx

Kerry511

Shall I get the car valued?

fermi

Worst case with the gambling would be a BRU/O for a few years. Bankruptcy restrictions extended for a few years beyond discharge basically. As a stay at home mum, that would have exactly zero impact on you, so I would not worry.

For now I would just have a look at the car value of websites. Parkers, autotrader etc, to get an idea.