Bankruptcy possible rejection- Help

Anamika1

Hi All ,
I am new to the forum and would like to present my case and look forward to someone who are/were in a similar position as I am.
So, long story short
Personal Loan taken in 2013: For £19000- remaining balance £12500
Credit card taken in 2013: Balance £8500
Personal loan taken in June 2016: £35000. payed for 5 months.
I am a mom with twins who are 2 years old living with my husband. My husband works full time and have his own debts as well. One of the reasons why we took the personal loan was to clear some of my husbands debt and use anything remaining to use for living expenses. unfortunately we did a gross miscalculation in our budget ( thought clearing his debts would keep be useful in repaying this personal loan as well as his credit rating might be better off later)
However as things stand we are unable to make the repayments still and we are in deep sh*t.
We are taking advise from stepchange and theirs adivse is even though we can apply for Bankruptcy, the OR might still ask for this loan not to be discahrged/ ask my husband to pay it back?
We both know that this wont be possible as his personal loans/debts are already around £25k.
So, we are really unsure how to proceed from here? Obviosuly we want to be open and honest with the OR ( looks increasingly that i might have a BRO against me possibly)
Does anyone had a similar experience? Sorry for the long rumble.. just want to come out of this mess somehow..
Thanks

TheGardener

Was the large 35K loan secured against a house? I'm guessing you would need evidence of a very high income to get an unsecured loan of that amount! BR covers all unsecured loans like your credit cards etc - but it will not cover loans secured against a property unless the property is repossessed, at which point, any shortfall would fall into the BR.

Anamika1

Hi Gardener
No.. it's an unsecured loan. Even we were surprised when she got an email saying she was eligible. We went to the bank to confirm and they approved on the spot. We weren't even asked for wage slips tbh.

debt_doctor

Hi,
The only way this loan could survive discharge from BR (and so remain payable) is if the application was considered fraudulent.
Providing you gave correct details and you carried out your intentions with the money (spent it on what you declared it was for) then you may be able to demonstrate that you miss calculated the overall effect on your finances.
There is no doubt that this loan would be carefully looked at, so you would need to be confident of your explanation.


It could also be that whilst maybe not fraudulent, it could be borrowing money with no reasonable prospect of repayment - which could bring a BR restriction order or undertaking.


Something else that would assist is putting more time between the borrowing and the BR.
DD

TheGardener

Anamika1 wrote: »

Hi Gardener
No.. it's an unsecured loan. Even we were surprised when she got an email saying she was eligible. We went to the bank to confirm and they approved on the spot. We weren't even asked for wage slips tbh.

I'm astonished that a bank would approve such a large loan so easily !
However, DebtDoctor is one of the expert posters on this forum and I defer to any opinion DD has on this.

Anamika1

Thanks DD
When would we know about whether this loan is deemed fraudulent or not? Is it before 28 days after the OR interview or before 12 months of normal br terms?

debt_doctor

TheGardener wrote: »

I'm astonished that a bank would approve such a large loan so easily !
However, DebtDoctor is one of the expert posters on this forum and I defer to any opinion DD has on this.

Yes, if the lender hasn't done affordability checks then they have some responsibility in this.
I also think you have become a bit of an expert yourself over the years Mr Gardener!


DD

debt_doctor

Anamika1 wrote: »

Thanks DD
When would we know about whether this loan is deemed fraudulent or not? Is it before 28 days after the OR interview or before 12 months of normal br terms?

Well, the assumption (unless a successful prosecution had occurred) should be that the debt is not fraudulent.

The Insolvency Service certainly won't be making any such declaration.
It would be for 'an interested party' - almost always the creditor, to take action in the county court to recover the money after discharge.
You would then put in a defence against their court action.
The court would then decide. That decision would make the money recoverable or not.


DD

Anamika1

Thank you DD for your advise.
I have prepared a SOA. Please note the child benift is also in my husbands name ( in short I have no income at all). When the OR goes through the SOA, I read somewhere where they said that they will look into the joint holdhold income and it will be split proportionately between the partners to see if something available for IPA. In my case, the whole earnings is from my husband ( he has his own debts as well which is not included here). I am sure how this will be done?
Any help with the SOA will be really appreciated.
Once agin, you guys are amazing!


Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned....................
Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 3600
Benefits................................ 137
Other income............................ 0
Total monthly income.................... 3737
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 375
Rent.................................... 550
Management charge (leasehold property).. 0
Council tax............................. 110
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 0
Mobile phone............................ 70
TV Licence.............................. 13
Satellite/Cable TV...................... 70
Internet Services....................... 30
Groceries etc. ......................... 525
Clothing................................ 50
Petrol/diesel........................... 200
Road tax................................ 5
Car Insurance........................... 85
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 80
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 20
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 50
Financialy dependent parents............ 450
Total monthly expenses.................. 2933

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 20000....(375)......0
Total secured & HP debts...... 20000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Lloyds Bank....................12500.....300.1.....0
Barclays Loan..................33500.....797.......0
Credit card....................8700......200.......0
Total unsecured debts..........54700.....1297.1....-

Monthly Budget Summary
Total monthly income.................... 3,737
Expenses (including HP & secured debts). 2,933
Available for debt repayments........... 804
Monthly UNsecured debt repayments....... 1,297.1
Amount short for making debt repayments. -493.1
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -20,000
Total Unsecured debt.................... -54,700
Net Assets.............................. -74,700

TheGardener

ok - if you have absolutely no income you can not have any expenditure. The OR would expect 100% of all domestic and household bills to be paid by your other half. I still really can't understand how you can have a £35K loan waved though with no income. I suspect you are going to have a lot of explaining to do to the OR.
You would need to include all the debts that are in your name alone in the BR and see where the OR goes with it.

Given the levels of debt - your family are clearly in need of having a word with yourselves about how your financial future is going to work and are going to need to address the family spending regardless of BR. (£170 for 1 mobile + phone/TV/internet, really?!)...and £450 for dependant adults?

Is there a reason you are not working given you are paying for childcare?

DorisTrousers

Is that correct, you have £20k HP? Is it for a car?