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Bankruptcy- Newbie

Hi,
I've read through pages of posts and apologise if I end up repeating what has already been asked.
I'm in the process of determining if I should elect to either do a DMP (debt management plan) to clear off my accrued debts (maybe 7 Yrs), or as suggested via on online chat with CA, go bankrupt as it will be quicker and clear the slate (less the future credit implications) - those are the two options.  I have also had an initial chat on the telephone with Step Change and will now create an annual budget before I have a further conversation with them.
The debt is substantial with 2 x bank loans and 2 x credit cards with DD on the two loans and one credit card. I have 3 x bank accounts (1 is a savings acct) with my wife having her own savings acct. We don't have a joint bank account = good thing for my wife.  There are other creditors, this is enough!
My wife has been reading on various social media and forums that someone from the OR dept, can show up at the house and inspect personal possessions to determine if and what can be removed for sale. My view was this is incorrect, not least the debt is in solely my name.
In the meantime, however, my wife is climbing the wall having read on social media and forums about OR Dept. / debt collectors arriving at the house. I hope I am correct.
We rent our home and I checked online with Parkers Guide with my car being valued at £450-£995, so that clears that issue.
Personal possessions includes clothes, my wife's stuff for birthday and Christmas presents and a few items that have come done via inheritance (grandmother, father, etc.).
I hope to complete my annual budget statement of needs in the next couple of days so that I can have the next conversation as time is fast ebbing by with next month's DD pay-outs falling due on the 1st of the month, so the need to initiate next step forward, either way, is fast approaching.
Thanks for any advice and previous insights of the bankruptcy procedure.
«134567

Comments

  • Hi,
    In regards to the decision to go bankrupt its better talking to stepchhange or CAB about this and go through your finances. People on the forum will have opinions like me and the fact I am so glad I went bankrupt but everyone's situation is different. 
    Property the OR cares about are high value items, I think its over £500 but you list any item over £500 and that's second hand value not retails. So if you have jewellery/watches for example where they are worth over £500 they may be interested in that. Or expensive sculptures etc but most assets won't have to be listed as many people going bankrupt dont have high value assets. They will not come to your house and do an inventory. 

    In regards to items and money belonging to your wife as long as they are solely hers the OR won't have interest. And as you are renting they won't care about housing.

    If you have any joint debts your wife will then be liable, if the debts are in your name only then then she won't be.

    Just to warn you this is just advice based on my experience and what I've read, it's still best to discuss all this with CAB and stepchange.  
  • sourcrates
    sourcrates Posts: 30,643 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    edited 8 March 2021 pm31 4:08PM
    Best advice is for wife to stay away from social media forums, Anita from Essex is not the best authority to give advice on bankruptcy.

    The bankruptcy process is done entirely online, by phone, and via the post, plus we are in the middle of a global pandemic, no one will turn up at your house looking for your hidden Picasso, so forget that.

    Household items are of no interest to the OR, unless you have assets of some value, they will not be bothered.
    The debt collection process takes a long time, many months, years even, you can go bankrupt in as little as 48 hours, so your creditors collection activities are of little consequence to you.

    You mention your debt is substantial, how substantial ?
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • 56puddles
    56puddles Posts: 36 Forumite
    Third Anniversary 10 Posts
    sourcrates in response to your query, it amounts to £40K; £10K between the bank loans with the remained on the C/Cards. Like many who faced with being placed on part-time work (18 months) and then furlough for 3.5 months last year, the credit cards became a means to fuelling the car, buying groceries (no holidays), paying necessities (car tax, servicing, MOT, etc.) while watching the interest charge escalator climb ever upwards. It's just become a vicious circle, so it somehow has to stop.
    Whether the bank and C/card companies will want to help find a solution, I don't know, though from what I've read of banks, there's little appetite to work with the customer. That said, I retained one long-standing current account plus saving account, even though I transferred my business out of the account, so I keep it active with the occasional action and have stopped the bank from shutting the account ~ I'm sure they'd try and pilfer any small amount if they hadn't seen occasional activity on the account.
  • Morfx
    Morfx Posts: 126 Forumite
    Fifth Anniversary 100 Posts Name Dropper
    edited 8 March 2021 pm31 8:02PM
    Evening,
      It will boil down to personal circumstances.

    I opted to go BR with roughly 45k of debt, 2 CC's, 2 loans and an overdraft.

    Work your budget out and realistically you could pay back, If the figures don't add up or its going to take you 6+ years to clear the debt, then BR is probably the better option.

    ** I'm no financial advisor, just my 2pence** (which I no longer owe the bank 👍)
  • I'm at a crossroad, deciding which might be the best way forward - IVA or BR. I've produced a detailed breakdown of priority expenditure and have made expense allocation for the likes of hair cuts, dentists, etc. as this is what I'd anticipate spending money on during the coming 12 month period (BR). However, the new Council Bill dropped on the doormat last weekend, one example of where I've under-budgeted, dual fuel ends in less than 2 weeks as will my BT contract (TV, Broadband, etc. no extras!); so more £'s than my budget put together a week ago. I have a phone chat scheduled for early next week and so a revised budget will mean less £'s available to service an IVA (if agreed best solution / I'm becoming less convinced will be best way forward).
    I was also told a story last week, where someone who ran their self-employed business spent their tax payments (£90K +) and eventually HMRC caught up. Inevitably the nice car and bike went, plus a much more. What was interesting is that the person concerned though they were done 12 months later (this story dates back 15 Yrs ago, so things may have changed). Anyway, 5 years after this person thought they were finally done having paid out ££'s ~ only to find out that HMRC had sold the debt with the result that debt collectors started banging on the door afresh. To this day, apparently the person concerned is still unable to obtain a mortgage (but has a 6-figure salary). And while this isn't me, I do have a concern that if I opted for the BR route, my concern would be that my debt (bank loans and credit cards) might be sold on with a similar horror story.
    Can anyone shed any light on this sort of thing?

  • JCS1
    JCS1 Posts: 5,331 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    56puddles said:
    I'm at a crossroad, deciding which might be the best way forward - IVA or BR. I've produced a detailed breakdown of priority expenditure and have made expense allocation for the likes of hair cuts, dentists, etc. as this is what I'd anticipate spending money on during the coming 12 month period (BR). However, the new Council Bill dropped on the doormat last weekend, one example of where I've under-budgeted, dual fuel ends in less than 2 weeks as will my BT contract (TV, Broadband, etc. no extras!); so more £'s than my budget put together a week ago. I have a phone chat scheduled for early next week and so a revised budget will mean less £'s available to service an IVA (if agreed best solution / I'm becoming less convinced will be best way forward).
    I was also told a story last week, where someone who ran their self-employed business spent their tax payments (£90K +) and eventually HMRC caught up. Inevitably the nice car and bike went, plus a much more. What was interesting is that the person concerned though they were done 12 months later (this story dates back 15 Yrs ago, so things may have changed). Anyway, 5 years after this person thought they were finally done having paid out ££'s ~ only to find out that HMRC had sold the debt with the result that debt collectors started banging on the door afresh. To this day, apparently the person concerned is still unable to obtain a mortgage (but has a 6-figure salary). And while this isn't me, I do have a concern that if I opted for the BR route, my concern would be that my debt (bank loans and credit cards) might be sold on with a similar horror story.
    Can anyone shed any light on this sort of thing?

    Don't listen to stories from friends.

    Bankruptcy covers all qualifying debts.
  • Minkym00
    Minkym00 Posts: 787 Forumite
    Sixth Anniversary 500 Posts Name Dropper
    56puddles said:
    I'm at a crossroad, deciding which might be the best way forward - IVA or BR. I've produced a detailed breakdown of priority expenditure and have made expense allocation for the likes of hair cuts, dentists, etc. as this is what I'd anticipate spending money on during the coming 12 month period (BR). However, the new Council Bill dropped on the doormat last weekend, one example of where I've under-budgeted, dual fuel ends in less than 2 weeks as will my BT contract (TV, Broadband, etc. no extras!); so more £'s than my budget put together a week ago. I have a phone chat scheduled for early next week and so a revised budget will mean less £'s available to service an IVA (if agreed best solution / I'm becoming less convinced will be best way forward).
    I was also told a story last week, where someone who ran their self-employed business spent their tax payments (£90K +) and eventually HMRC caught up. Inevitably the nice car and bike went, plus a much more. What was interesting is that the person concerned though they were done 12 months later (this story dates back 15 Yrs ago, so things may have changed). Anyway, 5 years after this person thought they were finally done having paid out ££'s ~ only to find out that HMRC had sold the debt with the result that debt collectors started banging on the door afresh. To this day, apparently the person concerned is still unable to obtain a mortgage (but has a 6-figure salary). And while this isn't me, I do have a concern that if I opted for the BR route, my concern would be that my debt (bank loans and credit cards) might be sold on with a similar horror story.
    Can anyone shed any light on this sort of thing?

    HMRC can’t sell a debt if someone is bankrupt. So the likelihood in this situation is that this person didn’t actually go bankrup, just didn’t pay all of their tax debt, and the balance was sold on. 
  • I have my first phone conversation booked with an IP Monday, initially in the belief that an IVA would be best route forward. However, after much reflection over the weekend, I believe that BR would probably be the better way forward. Having used SC to create my monthly/annual figures, I have revised them to be more realistic and in line with expenditure, not least with increased bills (council tax, etc.). At the time of creating my budget, I was cutting as much cost out of things as possibly to make the IVA appear attractive to the creditors.
    On the basis that I want to follow the BR path, will I be able to discuss my revised budget figures with the IP and have them accepted as being more accurate, or will they be inclined to work off the SC finalised budget figures?
    Thanks for any guidance and insights.  
  • flipflopflo
    flipflopflo Posts: 485 Forumite
    Third Anniversary 100 Posts Name Dropper
    edited 22 March 2021 am31 12:41AM
    Why are you speaking to the IP? Is it for an IVA? You don't need an IP to go BR. You just go onto the website and input your details and pay your money and that is it.
    If you pop your SoA up on the board then there are people who can tell you how reasonable it is.

    https://www.stoozing.com/soa.php

    Format for MSE and post on the thread.
  • flipflopflo
    The IP call was arranged on basis of an IVA, but after re-budgeting my costs, I believe BR would be the best solution. If I take the call with IP, will I be due to pay fees to the IP? Hopefully not!
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