It has come to filing, last resort

Pretender

Hi,

We are seriously thinking of filing for BR today.
Due to poor income from self employment in the past and family illness we now have CC and loan debts totalling £40000+ and monthly payments going out are around £900 without any dent being made.
All balance transfer options have been exhausted. This has been tried several times over the years.
The household only has one income, annual £32000 and we currently habit a house where we don't currently pay rent but will have to start imminently (which would mean outgoings are far higher than income)
I am after reassurance that this is a good option as the stress from the financial situation is now making me unwell and there is no end in sight for the debt.
We do own a house which has enough equity in it to clear everything, but for one reason or another it is jointly owned by someone who will not cooperate with selling and it has sat for years with us unable to be able to avoid legal costs to do anything with it.
What happens with the house?
Thanks.

TheGardener

Ok - so there is no financial problem that doesn't have a solution and now it the time to take back control.

Have you sought advice from any of the free debt charities? Stepchange have a useful Debt Remedy tool on their website as a starter but there are also National Debtline and Citizens Advice. You need to do this first.

If BR is indeed the most likely option - then stop paying all but the essential debts now (essential being Council Tax, rent etc) All credit debts stop paying and if they contact you, just say you are working with a debt charity and you'll get back to them - you will need to be thick skinned as they will push harder because they want to try and get their money before you fold.

I'm assuming you have explored all other legal options to get the other party to sell their part of the house?

If you can't sell the house then the OR can so don't worry too much about that - the OR could sell the property and give the 'other party' their share back or offer them the opportunity to buy you out. Don't underestimate the OR's charges though.

Read the sticky posts at the front of this board if you haven't already done so and come back here if you have further questions

Pretender

Hi TheGardener,
A couple of the debts are on reduced interest and payments already after negotiations with them. when and if these terms were to end I would be several hundreds of pounds down every month.
Currently have no disposable income after bills are paid and cant afford to tax car etc (it is taxed!) by using income alone.
I have no issue stopping payments to CC's etc and they wont be able to push me. I have become extremely thick skinned over the last few years due to this.

I cant see any resolution with the house, it has dragged on for years so BR will likely resolve that dark cloud.

silvercar

Difficult choices.

My two concerns would be:

a) your share of the equity in that house will be taken by the OR who will force a sale or sell your share of the equity to the other owner. If that is sufficient to pay all your debts and the (large) OR charges, you bankruptcy will be cleared. If you can make the other owner see this could save you from the whole process.
b) in the mean time will your £32k income lead to an IPA? If so, you will be stuck with it for 3 years.
c) The fact that you only have to start paying rent at a time when you are also going bankrupt may need some explaining.

debt_doctor

Hi,

As Silvercar mentions, why is it that rent has not been payable so far, but now will be payable?

I have seen these 'I'm not selling or cooperating' scenarios several times over the years - they are very frustrating and destructive. I saw one case where eventually the court forced a sale against the non-cooperating partners wishes - it took about 8 court appearances and around 2 years in all.

DD

Pretender

silvercar wrote: »

Difficult choices.

My two concerns would be:

a) your share of the equity in that house will be taken by the OR who will force a sale or sell your share of the equity to the other owner. If that is sufficient to pay all your debts and the (large) OR charges, you bankruptcy will be cleared. If you can make the other owner see this could save you from the whole process.
b) in the mean time will your £32k income lead to an IPA? If so, you will be stuck with it for 3 years.
c) The fact that you only have to start paying rent at a time when you are also going bankrupt may need some explaining.

a) If the OR wants to sell our share of the house, then that is fine. We tried a clean break from the house years ago but the mortgage lender wouldn't let us be removed. The other owner has been nothing but difficult and refuses to cooperate so we have no interest in trying to retain anything related to this property.
b) 32k is for a family with 3 children and I am sure an IPA would be less than I am paying out now. If for 3 years, so be it, that's less daunting than having 30 years + to continue paying or bayliffs coming around and going into bankcrupty non-voluntarily.
c) The rent issue has been avoided for a long time because of the financial issues. relatives want to retire now and require the rent from our house. We cannot afford rent or mortgage on top of anything else. Nothing dodgy going on and I would be 100% open and honest through the whole process.

debt_doctor

Sorry!

We cross posted each other.

DD

Pretender

Reading more on the financial information that gets submitted, numerous people have allowed budgets for:
Holidays
Clothing
pensions
We currently have no pensions. I had to opt out of the work pension as I couldn't afford the drop in my salary. Clothing we have no budget for. Holidays? the kids have never been abroad, don't have passports and I want to take them camping this year but doubt I can afford the pitch.

debt_doctor

Hi,

You would be well advised to post your SOA on here by using this link: http://www.stoozing.com/calculator/soa.php

There are certain allowances for things depending upon the size and make up of your family. This would be used to calculate any potential IPA.

Just to give you a guide on groceries / housekeeping - for a couple with 3 children £800pm would not be unreasonable.

DD

Pretender

Information online is confusing.
It looks like if I file for bankcruptcy then the credit card of my wifes that I also pay for will not be taken into account?
Also her share of the house would not be touched.
I didn't realise that bankcruptcy was individual rather than a married couple, weirdly, so to also clarify, the house is from a previous relationship and only my wife is on the mortgage / deeds.
Will do finances shortly.

katyp

I am not 100% sure, but I think the house would not be touched if you are not on the deeds as it is not you asset to realise.
Your wife's cc would not be included in your bankruptcy, regardless of who pays for it.
It your wife can't service her debts, so she may have to declare bankruptcy also.
Myself and my husband both declared in September and it is honestly the best thing I have ever done. I still get a kick from paying my bills when they are due and knowing I can open any letters without worrying (or even worse, not opening them at all)