Impending bankruptcy. Lots of money going out tomorrow. May have made a HUGE mistake

Htadgillgg

So, I've kinda been avoiding it for a while. Making odd Google searches but not really reading in-depth or following through with anything. I've never been good at dealing with stuff.

I've been limping-by using those card-to-bank money transfers, but those offers have long since dried-up. And I have 3 HUGE credit card repayments going out tomorrow (maybe even tonight?) and not enough money in my account to actually pay them.

So, I remembered reading before that you're allowed to keep £500 in your bank account when you go bankrupt, for bills and rent and stuff, and I panicked and transferred £500 to an old bank account to ringfence it for rent

Now I can't find any reference to that £500 limit and I'm wondering if this would be classed as making preferential payments to debtors or something? Which I gather is really bad. I never really considered my rent as a debt because I'm not in arrears.

To add to the stress, the old account I sent the money into isn't set up for internet banking or anything, so it's kinda stuck there until tomorrow

Should I be worried? Is there an idiot's guide for all this stuff?

Htadgillgg

I still have credit available, and I've read that you can pay the bankruptcy fee on credit card (which seems insane) so that's great. Should I do it tonight? Am I allowed to do a big shop first? And top up my electric? It's all very scary

srg0916

First things first, take a breath. If you haven't done so already contact all creditors and tell them your having problems and ask them to put a hold on your account for 30 days to give yourself some time to think. Next contact a 3rd party advice service like Stepchange, CAB , Money advice service etc. They will give you good info about your situation. If you decide BR is the best way, apply online, you can pay the fee in installments but it won't go through till paid in full. I know the whole thing is stressful but try to see the positive and take little steps towards getting this sorted. Post your SOA on here and ask people for advice there could be things your spending too little on which would help you avoid an IPA.
Good luck

fatbelly

The problem with an idiot's guide may be that it is not detailed enough.

Try this and see if it is enough

https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/bankruptcy-2/bankruptcy-explained/bankruptcy-overview/

Your two questions:

Paying rent is not a preferential payment.

You can pay the fee on a credit card and I am not aware of anyone facing any actual repercussions for doing so. However, the guidance says:

You shouldn't use your own credit card to pay for your bankruptcy. If you can't pay the full fee yourself, you can also ask others to make online payments on your behalf.

How much debt are you in?

Htadgillgg

Oh, I'm so confused now. I thought that it was fine to pay on credit card? Or to withdraw the cash and pay that? My head is all over the place.

But, you're saying that it's fine that I transferred money into my other account to pay rent and bills through the whole process? That's okay?

Htadgillgg

Also, it's about 45 grand. It's built up over about 15 years. Very slowly at first, but then it kinda snowballed. I just kept shifting it around.

I don't live an extravagant lifestyle at all. I've never been on holiday. The concept seems really frivolous to me. But I have health problems that make it hard to work, so I've really just been using credit to live. Most of my debt will just be interest and fees TBH

fatbelly

Htadgillgg wrote: »

Oh, I'm so confused now. I thought that it was fine to pay on credit card? Or to withdraw the cash and pay that? My head is all over the place.

What I'm saying is that I don't know anyone who's got into trouble for doing this. But when you go on to the site you will see the paragraph I quoted, so I wanted you to be aware of it. The Insolvency Service has to be seen not to be encouraging people to stick their bankruptcy fee on credit. Frankly the DRO system is better where you must pay in cash at a Post Office.

Htadgillgg wrote: »

But, you're saying that it's fine that I transferred money into my other account to pay rent and bills through the whole process? That's okay?

You have only transferred one month's rent, not a years worth. Hopefully you'll keep your main account open anyway. Do you have any debts with that bank?

Htadgillgg wrote: »

Also, it's about 45 grand. It's built up over about 15 years. Very slowly at first, but then it kinda snowballed. I just kept shifting it around.

Just wanted to check whether you might qualify for a DRO - you don't.