going bankrupt

tatty1985

Hi 

I have over 60k worth of debt after leaving abusive relationship and having to give up my mortgaged home, after they sold it, I was left with £54k debt as well as £2k on council tax for that building.
I have debts of £5k-7K on gas and electric and old pay day loans from when I was in the abusive relationship,

After losing my daughter and burying my head for almost three years. I have got to a place where I want to start taking charge of the situation and getting things in order.
 I think bankruptcy is the only option for me, however I have a few questions,

- I am on benefits but also work part time, will I be expected to make payments? if so how long will I have to make payments for.

- recently I have been making a few extra pounds buying and selling on vinted, its temperamental and not guaranteed and varies from month to month. will this be classed as regular income? should I stop doing this until everything is sorted with the bankruptcy?

- I have a car worth about £1000 at a push only a matiz that helps me get son to school and me to work and back, will this be taken off me?

- I have savings of £900 at the moment but this will be paying the bankruptcy fee, am I allowed to have any savings? I usually save a bit each month for the school holidays as need to cover child care etc

I have filled in one of those SOA things but only briefly and not sure if I have included everything correctly. Currently I don't pay life or house insurance but I would like to going forward.

The benefit tab includes universal and the 96 child payment off the government each month, not sure if that is included. I have put money in the entertainment and holiday fund even though I don't always add to that at the moment.

Any advice or help would be greatly appreciated

Thanks

:-)

[tt][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 1

Number of children in household......... 1

Number of cars owned.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 1085

Partners monthly income after tax....... 0

Benefits................................ 782 - 

Other income............................ 212[b]

Total monthly income.................... 2079[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 450

Management charge (leasehold property).. 0

Council tax............................. 127

Electricity............................. 100

Gas..................................... 100

Oil..................................... 0

Water rates............................. 45

Telephone (land line)................... 0

Mobile phone............................ 29

TV Licence.............................. 13

Satellite/Cable TV...................... 45

Internet Services....................... 0

Groceries etc. ......................... 600

Clothing................................ 50

Petrol/diesel........................... 140

Road tax................................ 15

Car Insurance........................... 47

Car maintenance (including MOT)......... 15

Car parking............................. 25

Other travel............................ 0

Childcare/nursery....................... 30

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 20

Pet insurance/vet bills................. 0

Buildings insurance..................... 0

Contents insurance...................... 25

Life assurance ......................... 25

Other insurance......................... 0

Presents (birthday, christmas etc)...... 20

Haircuts................................ 20

Entertainment........................... 50

Holiday................................. 50

Emergency fund.......................... 50[b]

Total monthly expenses.................. 2091[/b]

[b]

Assets[/b]

Cash.................................... 450

House value (Gross)..................... 0

Shares and bonds........................ 0

Car(s).................................. 1000

Other assets............................ 0[b]

Total Assets............................ 1450[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 54000....(0)........0[b]

Total secured & HP debts...... 54000.....-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

gas and electric...............5500......0.........0

water..........................2000......0.........0

council tax....................2500......0.........0

pay day loans..................1500......0.........0[b]

Total unsecured debts..........11500.....0.........-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,079

Expenses (including HP & secured debts). 2,091

Available for debt repayments........... -12

Monthly UNsecured debt repayments....... 0[b]

Amount short for making debt repayments. -12[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 1,450

Total HP & Secured debt................. -54,000

Total Unsecured debt.................... -11,500[b]

Net Assets.............................. -64,050[/b]

sourcrates

First things first, are you being chased for any of these debts ?

Because, there should be no need to go bankrupt over an old mortgage shortfall debt, as they are seldom chased that hard, and even if they are, if you tell them you cannot pay it due to affordability issues, they tend to just back off, and eventually forget about it.

Large debts like that seldom ever get repaid unless those who owe it have regular income that can cover such payments.

Richard1212

I am so very sorry for your troubles and hope that you keep strong out smiling-----wanting to get things back on an even keel after your dreadful 3 years is certainly a good start.

It is really difficult for anyone on this forum to advise you in any detail , even if they say can. I think you should use up the first session with a solicitor, which is free and seek his/her opinion. That might point you towards a financial adviser recommended by the solicitor or may lead you along other avenues. And, don't forget Citizens Advice Bureau who can also start you off in the right direction. Very very best wishes. 

tatty1985

@sourcrates I gave the keys back to the house in January 2020 because of Covid they couldn't class it as repossessed until Aug 2022 and then sold it earlier this year so the debt for the house is only really 6 months old. They have sent letters and I haven't done anything about it yet.

If its the case that that debt goes away I would only really have about 10-15k worth of debt, would I be better considering a DRO?

also the house and some of the debts are in the ex partners name as well so I'm not sure if they split the outstanding between us or how that works.

The electricity, gas and water are chasing and the pay day loans just send emails (the pay day loans are almost 5-6years old now) I just want a clean slate with the finances I will do what it takes as the rest of my life is slowly improving and I just want to give my son the best life possible. 

I will try to get an appointment with citizen advise or call step change and see what they advise

Thank you

Brie

I think that as long as you have the mortgage debt a DRO won't be possible as your total debt amount is above the £30k limit.  So bankruptcy is possibly the only solution at this time.  

BUT if the debts are in your name AND your ex partner's name you are both liable for them.  If one person can't pay they will chase the other.  So the bank will happily chase both you and your ex re the mortgage and not care which one pays the money off.  If you paid £40k and your ex nothing you would both still owe all the remaining debt.  Doesn't seem fair but that's the way it works.  Same is true for the other bills if they are in both names.  

NationalDebtline is another place to try if you can't get through to CA or StepChange.  Your local foodbanks might also have debt advisers available.

sourcrates

@tatty1985 No, it doesn't just go away, I don`t want to give the impression they just give up on collection, sometimes they can play hard ball, but these companies do have a tendency to not chase large debts such as this, when there is no realistic chance of them ever being repaid.

Having said that, if it`s piece of mind you want, then bankruptcy would take care of things, although you might get an IPA for 3 years, depending on your actual disposable income.

The other route, if you fancy a battle, would be debt management, you wouldn`t be able to do a DRO as your total liabilities will include the mortgage shortfall, so you would be well over the 30k threshold.

With a DMP you could fight the shortfall debt, by telling them its just not affordable, and instead concentrate on the other, smaller debts you have, but that would leave the large debt hanging over your head for another 10 years till it went statute barred.

Really its all boils down to how quickly you want to sort this out.

Can we just clarify something, as it`s not quite clear in your original post, you are only liable for debts in your name, any debts not in your name, you do not pay for obvious reasons, are you saying the house was not in your name either?

Keith60

Contact step change they are Great helped me when I needed them with 100k debt

fatbelly

Your soa looks good enough to me. The mortgage shortfall is now an unsecured debt

Obviously the bankruptcy fee will take £680 so will take most of your savings. You are allowed to have money to last you to the end of the month but not savings as such.

You will be allowed to keep a car worth up to 2k as long as it is needed.

You don't need a solicitor. The application is frighteningly easy and if Cab/ stepchange recommend anything other than bankruptcy on that soa, let us know.

Comments on the shortfall debt are correct and if that was your only debt then i would not rush to bankruptcy. But council tax is a nuisance of a debt.

Oh, and you won't get an IPA if your available income is less than £20 per month

luvchocolate

I was in a similar position to you and went BR for peace of mind..a fresh start. 
It's unlikely you will have an IPA on those figures. 
Life insurance can be claimed from the OR and they may offer you the chance to buy it back. 
Get some content insurance sorted before BR..for some strange reason it's difficult to get then. 
Call one of the debt free charities I used Stepchange. 

tatty1985

Thank you everyone I am off work today so I will make some calls and see what I am advised.

The house is in both of our names. He is currently
making payments towards the council tax for the old house ( so they aren’t chasing me for that) 

the pay day loans he took out in my name to pay for his drug habit. I have no problem making payments in an ipa if it means I have no one chasing me and I get my life back in order. My credit file is at zero as it is. I just want to in the 6 years be able to start building that up and getting myself back on track.

I just want to live and have enough money to pay everything and not have to stress about bills and finances xx

tha ks for your help everyone xx

fatbelly

tatty1985 said:

The house is in both of our names. He is currently
making payments towards the council tax for the old house ( so they aren’t chasing me for that) 

Bankruptcy removes your liability so if he stops paying, it's not your problem.

One option you might consider is delaying your bankruptcy till April 2024. Bankruptcy removes your liability for council tax for the year you are in, so you wouldn't pay any till April 2025