Bankruptcy advice needed please

Tafy1978

Hi All,

I am hoping for some advice for a friend of mine.

Originally the plan was to go via DRO but her debts are around £24k and following conversations with Step Change it was decided that bankruptcy was the only option. Its highly unlikely that the debts could come down to under the £20k in a reasonable amount of time, I assume the only option remaining is bankruptcy?

The bankruptcy process seems slicker now in that its all filled in online. Is it as simple as it seems i.e no court appearances etc?

That assumed, she has a car (£12k) on finance so we fully expect that to go. She will need a car for work and childcare arrangements but the only opportunity to get a new one is via the credit cards she has for around £1000. Also she would have to use her credit cards to pay for the bankruptcy fee. Is this an idea that will come back on her?

She also has a settee that was purchased on credit but comes under "personal loan" on her credit report. The loan/credit was a 4 year agreement that is due to end in September 2017. Is this something the OR or creditor (Barclays finance) are likely to want returned?

I hope the above makes sense?!

Thanks in advance for help / advice.

tigerfeet2006

Tafy1978 wrote: »

Hi All,

I am hoping for some advice for a friend of mine.

Originally the plan was to go via DRO but her debts are around £24k and following conversations with Step Change it was decided that bankruptcy was the only option. Its highly unlikely that the debts could come down to under the £20k in a reasonable amount of time, I assume the only option remaining is bankruptcy?

IT CERTAINLY SOUNDS AS IF ITS THE RIGHT OPTION AND IF THATS WHAT STEPCHANGE HAS RECOMMENDED THEN THAT IS PROBABLY THE RIGHT OPTION AS THEY DONT RECOMMEND IT LIGHTLY.
The bankruptcy process seems slicker now in that its all filled in online. Is it as simple as it seems i.e no court appearances etc?

THATS CORRECT. YOU SUBMIT IT ONLINE. YOU GET AN EMAIL TO SAY IF ITS BEEN ACCEPTED. YOU THEN GET A PHONE CALL TO CHECK A FEW THINGS AND THEY WILL THEN MAKE AN APPOINTMENT FOR A FULLER INTERVIEW.

That assumed, she has a car (£12k) on finance so we fully expect that to go. She will need a car for work and childcare arrangements but the only opportunity to get a new one is via the credit cards she has for around £1000. Also she would have to use her credit cards to pay for the bankruptcy fee. Is this an idea that will come back on her?

YES IT WILL COME BACK ON HER. THERE IS AN OPPORTUNITY NOW TO PAY THE FEE IN INSTALMENTS. WHAT TYPE OF FINANCE IS THE CAR ON?


She also has a settee that was purchased on credit but comes under "personal loan" on her credit report. The loan/credit was a 4 year agreement that is due to end in September 2017. Is this something the OR or creditor (Barclays finance) are likely to want returned?

SHE WILL MOST LIKELY GET TO KEEP THE SOFA AND THE REST OF THE DEBT WILL FALL INTO THE BR.
I hope the above makes sense?!

Thanks in advance for help / advice.

If she is going BR then she should stop paying her debts and buy a car from the money she saves from that. Then pay for the BR.

Tafy1978

Hi Tigerfeet and thanks for the reply.

The idea for purchasing the car using credit from the credit cards was to draw cash out to purchase the car as she doesn't think she can last 2 months without paying the debts, which she would need to do to purchase a car. All the debts are up to date at the moment but looking to go BR asap.

The car finance is hire purchase (for 48 payments with a balloon payment the end of £4314). Its with black horse finance

Thanks

sourcrates

Tafy1978 wrote: »

All the debts are up to date at the moment but looking to go BR asap.

s

Hello,

Why the rush to go Bankrupt ?

If all the debts are up to date, she could quite easily stop paying today, and not have to worry about potential court action for a good few years, debt collection can be a very long process indeed, debts are sometimes chased for years and years with little more than a few calls and letters.

Why the haste here ?

Tafy1978

Hi Sourcrates,

I cant really explain too much but unlike it reads, there is no haste, this is a accumulation of 2/3 years unfortunately which has come to a head with previous financial support that helped now gone.

Your comments regarding debts and the process is interesting, I didn't realise it could go on that long.

sourcrates

Tafy1978 wrote: »

Hi Sourcrates,

I cant really explain too much but unlike it reads, there is no haste, this is a accumulation of 2/3 years unfortunately which has come to a head with previous financial support that helped now gone.

Your comments regarding debts and the process is interesting, I didn't realise it could go on that long.

There is a process to debt collection, like there is for everything.

For example, normally a creditor won't take legal action, they first pass the account to debt collectors, they may do this numerous times, over many months, years sometimes, before eventually selling the debt to a specialist debt buyer, who are then more likely to get legal if they are ignored.

If your friend has never missed a payment, they are a long, long way off serious collection activity yet, plenty of time to formulate a plan.

london1973

in addition to Sourcrates, and if helps re understanding likely timeframes, i stopped making payments on 2 credit cards and a bank loan nearly 2 years ago, due to a major change in circumstances, debts ranging from 5k to 30k, and still none if them have got 'heavy' - i get the occasional letter from one agency or another-all now ignored as i have just been made bankrupt by someone else-i would echo that you really are a matter of years away from anything getting critical

NotEvanAPot

Do not purchase a vehicle with borrowed funds in the couple of months running up to applying to go BR. Best case, the car will be low value and OR confirms no interest. At worst, a BRU/O handed down and the car taken to be sold on.

Stop paying creditors for a couple of months, use the funds if a genuine reason can be proven for a vehicle to purchase and the rest on fees. OR may grumble so be prepared to show that public transport is both impractical and unavailable.

Not sure how much handholding your friend has required thus far, but they need to be aware now that, unless a recognised incapacity prevents it, they will need to handle the OR interview process over the phone or in person by themselves. I only point this out as advice, as often when an individual has issues that all seem too much and someone has handled communication on their behalf previously they believe that can continue. Bankruptcy is a legal process, meaning it is the person involved that must provide evidence when sought.

tigerfeet2006

I second the advice given by the others. Slow down and get her ducks in a row. Stop paying the debts ( it's just throwing good money after bad.) It'll take a couple of months for the firm to repo the car so save for a new one, keep it around the £1k mark. Get together evidence of why a car is essential and not a luxury i.e: buses don't run at times to get children to nursery and get to work on time.

Once you have the car get the fees together.

Also in this time get a BR friendly bank account. Nationwide Flex Basic and the Barclays basic account are the weapons of choice atm. Make sure it is the basic account opened and not a current account. Get all direct debits etc. moved across and the account running nicely.

Tafy1978

Thank you all for your replies and advice, it is much appreciated.

The_Real_Cheddar_Bob

hey i had a motorbike with blackhorse. went br and kept the bike. I called Blackhorse to ask them to come take the bike back and they said it was a loan with a financial interest in the bike, not hire purchase so they wont and cant take the bike.

that said the OR took the bike as i had access to a car anyway, but if its your only method of transport..... who knows