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Who can go bankrupt and what happens about renting and bank accounts?


R has around 80K in debt after years of prolific spending. She took out a IVA via a private company a couple of years ago, but somehow has continued racking up her debts. We're wondering if she would be allowed to go bankrupt, if she applied, and how would it be for her afterwards. Would she be able to get a basic bank account and rent a flat? She has been employed and on a good salary for most of her working life, but is currently unemployed and looking for a new job.
Any advice gratefully received.
Comments
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Assuming the IVA has been officially failed, its not a case of being allowed or not to go bankrupt, you pays your £680 quid statutory fee, and in the majority of cases, that's it, it takes approx. 48 hours to be confirmed.
Pre-preparation is everything, you set up a new basic bank account beforehand, with a lender with whom you have no debt, any account you owe money too will be frozen.
Any excess income will attract an IPA (income payment arrangement) for 3 years, she might have trouble renting depending on the landlord, best policy may be to organise rental first prior to going bankrupt, and then that bridge may never have to be crossed.
Goes without saying no more credit is allowed, if she does not cooperate with the OR then a BRO (bankruptcy restrictions order) might be imposed on her, which can last up to 15 years.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-letter1 -
Many thanks for your response, Sourcrates. R may not convincingly say that she is keen to avoid getting into debt in future, and I wondered if bankruptcy could be refused because of this. It would mean writing off upwards of 50K in debts at best, even if she got a good job and paid of some of it during the first year. Great ideas about sorting out a bank account and accommodation first. Thanks.0
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We were in serious debt, was considering IVA and similar. We have been debt free for over a decade. I started with that introduction because the next bit may be controversial.
The problem is not income or debt, it is not income, it is attitude or even addiction. I know people who earn many times more than I ever did who are in serious debt. I had a friend on benefits who used to be able to save (yes small amounts but he did). I knew a woman (long deceased) who somehow managed to create a second identity complete with NI number (in the days when computers didn’t check anything), she managed to get the second identity into as much debt as her original. A fresh start is pointless if nothing else changes,
R is going to have to accept she has a serious problem, R is going to have to do the hard work. Where is the money going? She might even need debtorsanonymous.org.uk . If I sound harsh how will she cope with homelessness when it comes?
We had to sit down and work out a plan and stick to it. Budgets had to made and adhered to. They were and since we cleared our debt we still live a live far less financially chaotic. One credit card on a joint account paid off each month. Cars, holidays, home improvements saved for first, nothing on credit. We were even able to retire early.
Flash phones, cars and bling etc. do not compare with living without financial worries.
I hope she can accept she needs to fundamentally change her relationship to spending.
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Thank you for your post, I_am_a_Robot. You are spot on. The problem is R's out of control spending which is addictive. She doesn't seem willing to change or even to recognise that it is her responsibility. What led to my question is that her close relatives have been bailing her out of one crisis after another for many years, to the tune of 50K so far. They can't do it any more and realise that it is money down the drain, but can't bear to see her actually hungry or homeless. So the plan is to say that they will give her subsistence money if she immediately files for bankruptcy, which hopefully would control her future ability to get into more debt in future. Then when she gets a job she'll have enough to live on without incurring more debt. If she won't do it, they will keep the offer open but not give her anything. I don't know whether it will work but it seems worth trying. Any thoughts that people who've experienced something similar are helpful.0
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The bailing out is what is known as enabling, in the world of addiction. Why make an effort when you know someone else will pick up the tab? One day the people who do this will be gone, so best if you cut her off now to see if she can turn it around, because you can never save her from herself.
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JaneMartin_2 said:Please could anyone with experience advise me on behalf of a relative.
R has around 80K in debt after years of prolific spending. She took out a IVA via a private company a couple of years ago, but somehow has continued racking up her debts. We're wondering if she would be allowed to go bankrupt, if she applied, and how would it be for her afterwards. Would she be able to get a basic bank account and rent a flat? She has been employed and on a good salary for most of her working life, but is currently unemployed and looking for a new job.
Any advice gratefully received.
Or is it still showing as current on the register?
https://www.insolvencydirect.bis.gov.uk/eiir/
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Just on the note of renting. When I had my interview, the OR told me they always write to the landlord to confirm the rental agreement (after all anyone can just download one from the internet). I'm on very good terms with my landlord and had let her know what I was planning well before it came up. She received a letter about 2 months after my BR. As others have said, I would imagine it would be nigh on impossible to rent somewhere after BR, so best to get a rental sorted out beforehand, just bear in mind that most contracts will have a clause about bankruptcy etc.
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I was told my landlord would not be informed..and he wasn't.
I had to show the O.R my rental contract0 -
luvchocolate said:I was told my landlord would not be informed..and he wasn't.
I had to show the O.R my rental contract
Maybe it depends on the circumstances. I too showed my rental contract, but was told it would have be confirmed with the landlord as it is standard practise. Not sure if it depends on area etc, amount of rental or if the wind is blowing in a certain direction
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