Bankruptcy: is it right for our situation?

TS_777

Hi guys,

It's my first post here on BR forum although I posted before on DFW.
My OH has 70K unsecured personal debt and is thinking about BR. We don’t have a house or a car. Our finances are totally separate, no joint accounts, and I am just a second card holder on his 3 credit cards. OH was made redundant and tried to make money by online spread betting on the market, lost lots of money and acquired this debt. He is out of job now, but looking for a job, his salary expectation is 2K, while his minimum payments are 1.6K. He did not miss a payment yet, so his credit record is still relatively OK.

I counted that it will take at least 4 years of sweat and tears to repay his debt if he gets a desired 2K/month job and pays all his salary into debt repayments while we live off my salary (I work full time).My questions are:

1. Is BR right for my OH?

2. Is it better to do BR now when he is out of job or wait until he gets a job?

3. If you are a BR and are looking for a job do you have to inform your potential employer or they will know anyway because of your tax code?

4. If he gets 2K job and become BR after that what will be his IPA?
Our joint house hold expenses are 2200/month (rent 1400+bills 280+food300+childcare 100+transport 100), so his living expenses are 1.1K/month.

Thank you!
TS

Goodvibes

I'm financially in a similar situation to you. After looking into an IVA and a few other options we're begining to think that BR is the best option.

Like you all the debt is in OH's name and dont own property or any other assets.
I'm still very new to all this but on this site I'm sure you'll get the answers you're looking for.

Good Luck GV:D

fermi

TS_777 wrote: »

1. Is BR right for my OH?

Not really for us to judge, although it does look like he is a pretty good candidate and has little to lose by going bankrupt. The "unwise" financial speculation (ahem!!!) might might result in some extended restrictions being imposed by the Official Receiver though.

As always, he should really seek the advice of one or more of the organisations in my signature to get professional advice on his individual situation.

2. Is it better to do BR now when he is out of job or wait until he gets a job?

Personally I would say better to go BR sooner rather that later, if that is the eventual course decided upon. He is insolvent now.

3. If you are a BR and are looking for a job do you have to inform your potential employer or they will know anyway because of your tax code?

Only if they ask, the prospective contract requires disclosure, or the job is one of the very few not available to BR's. The NT tax code isn't exclusive to bankrupts and is sometimes applied by HMRC for other reasons, so it's not an immediate give-away.

4. If he gets 2K job and become BR after that what will be his IPA?
Our joint house hold expenses are 2200/month (rent 1400+bills 280+food300+childcare 100+transport 100), so his living expenses are 1.1K/month.

If the OR assessed his income surplus at £900 per month they would want 70% of that, so £630 ish.

Is a 2K pcm job in the near future a likely prospect? From reading your thread on DFW he doesn't exactly sound the most motivated person at the moment (sorry for being blunt ).

Sorry to repeat (but at this stage it can't be emphasised enough), before taking any steps towards BR please get that professional advice. The judge would ask him if he has done this at the bankruptcy hearing.

TS_777

Thanks, Fermi!

I will leave discussion on OH character for a DFW thread, if I start on it now I might not finish soon! :-) Here on BR the mood is more sombre and business-like. It feels like a surgery room: group of surgeons, patient, click of the instruments, surgery performed, next!... So I'll keep to my questions:

1. Besides 70K-debt that OH owes to various banks he owes me 40K. It was some time ago, but I can try to find relevant statements showing transfer.
If I prove that I transferred money to him, can I be included in his creditors? And will I get any part of his IPA?

2. Since his debt was acquired so "unwisely" he could expect maximum penalty, although he might argue that it happened only after he was made redundant. Is 3 years the maximum length for the IPA? Are there any restrictions after that? Could anything be taken after 3 years period?

OH's first meeting with CBA is next Monday. He was waiting for an appointment for 1 month! Obviously lots of people with similar problems down here.

TS 777

Miss_MoneyPenny_4

Hi TS777

The Judge in court may not declare your OH bankrupt as their circumstances will change due to the provision of a new job.
Go into a Debt Management Plan initially and wait until a job comes about.
Due to gambling I am sure a restrictions order will be given. The length of time is completely down to the Official Receiver dealing with it. This may be something that you may have to live with though.
Depending on the way the Income & Expenditure is completed on the court documents depends on how much monthly contribution you have to pay under the Income Payments Order issued. This will last for 3 years so be careful!

fermi

TS_777 wrote: »

Here on BR the mood is more sombre and business-like. It feels like a surgery room: group of surgeons, patient, click of the instruments, surgery performed, next!...

We know how to have a laugh as well.:D:rotfl:

TS_777 wrote: »

1. Besides 70K-debt that OH owes to various banks he owes me 40K. It was some time ago, but I can try to find relevant statements showing transfer.
If I prove that I transferred money to him, can I be included in his creditors? And will I get any part of his IPA?

It is possible in some cases apparently. You would need to be able to submit proofs of the debt I believe.

2. Since his debt was acquired so "unwisely" he could expect maximum penalty, although he might argue that it happened only after he was made redundant. Is 3 years the maximum length for the IPA? Are there any restrictions after that? Could anything be taken after 3 years period?

The maximum length of an IPA is 3 years (this cannot be extended).

So no, nothing can be taken after the 3 years out of his income.

Should his income not warrant an IPA being imposed at all before his discharge, he would then never get one.

The official Receiver may seek a BRU/BRO (Bankruptcy restrictions Undertaking/Order) which extend the restrictions of bankruptcy beyond discharge.

See: http://www.insolvency.gov.uk/guidanceleaflets/bro/bro.htm

The judge would take current circumstances into account only. Potential changes in circumstances (especially when not guaranteed) have no bearing on whether someone is currently insolvent.

CAB will help him examine all the alternative options available to him.

TS_777

Miss_MoneyPenny wrote: »

Hi TS777

The Judge in court may not declare your OH bankrupt as their circumstances will change due to the provision of a new job.
Go into a Debt Management Plan initially and wait until a job comes about.

His minimum payment is 1.6K/month and living expenses are 1.1K/month (we rent privately and have 2 children), so he needs to have 2.7K/month to keep up, but he will never get that much (his maximum expected salary is 2-2.2K/month). How can he go into DMP if there is no chance of repayment?

tigerfeet2006

Miss_MoneyPenny wrote: »

Hi TS777

The Judge in court may not declare your OH bankrupt as their circumstances will change due to the provision of a new job.
Go into a Debt Management Plan initially and wait until a job comes about.

His minimum payment is 1.6K/month and living expenses are 1.1K/month (we rent privately and have 2 children), so he needs to have 2.7K/month to keep up, but he will never get that much (his maximum expected salary is 2-2.2K/month). How can he go into DMP if there is no chance of repayment?

Don't panic about MissMP's advice it is wrong in this case. Your OH can go BR now as he is to all intense and purposes insolvent. The CAB will sort it all out for you. If you have any more questions just come back to us.

debt_doctor

Hi, im sorry miss money penny but your post has no basis in bankruptcy proceedure. Future ' maybe's' do not count, the possibility of a future job sometime would not be considered at all by the DJ. ( how would s/he know ? there is no place for future job on the forms )

No assetts and large debts = strong bankruptcy candidate, providing all the usual exclusions re employment, occupation etc are considered.

Ipa seems likely if job prospect comes good, but who knows ? Also in my opinion BRO's are not given that often and a bro of 6 years or less is pretty meaningless if the only result of it is you cannot borrow more than £ 500 as your credit rating is shot to bits anyway ! ( just like it would be under a DMP or IVA.)

Miss_MoneyPenny_4

Hi Guys,

Was told that when I went into an IVA - oh joy, another piece of duff info from Debt Free Direct.
Not sure what to believe anymore - good job there is good, honest advice out here.

Richard_S

Miss_MoneyPenny wrote: »

Hi Guys,

Was told that when I went into an IVA - oh joy, another piece of duff info from Debt Free Direct.
Not sure what to believe anymore - good job there is good, honest advice out here.

Hi Miss MoneyPenny,

The problem with companies like Debt Free Direct is that they have to sell their products to make a profit and stay in business. Any advice they give will certainly be intended to steer you into becoming a customer.

For free, impartial and objective advice you should contact CCCS, National Debt Line or a specialist money advisor at the CAB. The links are at the top of the page, or if not they're in fermi's signature.

Good on you for admiting what you were basing your advice on; I was beginning to wonder whether you worked for an IVA company.:eek: :eek:

Richard