Considering Bankruptcy

Dogsarethebest2025

Hi, I am looking for advice regarding bankruptcy. 

I owe around £55k in debt, a mix of personal loans, overdrafts, credit cards and car finance.

I need to know how my bankruptcy will affect my partner, we are not married but we do own a shared ownership home together. It doesn't have much equity in it, once the legal fees and ERF is paid, there will be around £4,000 left. We are both prepared to let it go if bankruptcy requires it. 

We have a joint account together, which is in its overdraft. other than that, she owns a car that I signed over to her a few months ago as hers broke, I got a new one on finance. no other assets that I can think of. I have none. 

I need to know what can or will be taken away from us. other than the home, will my finance car be taken away? I have only had it for about 5 months so hardly anything is paid off. the car I owned outright is now hers so I don't think it counts. 

She just had a baby so she's still on maternity leave, only receiving the SMP, also, she will not be returning to work due to nursery costs and she is not entitled to any benefits because of my salary. 

I need to know how our life will look. I am not fussed about the bad credit rating, I wont be needing it. the first 12 months I know I will be able to pay for essentials like bills etc and anything extra I will need to pay towards the bankruptcy which is fine, but what happens if my partner starts working, will her wages be taken away from her? after 12 months when you're discharged from bankruptcy do you still make payments towards it?

thanks a lot in advance, the whole thing is just a little confusing. 

ManyWays

How much is the car you gave your partner worth? 
How much is your car on finance worth and what are the monthly finance payments? 

luvchocolate

First thing read the insolvency service website...contact a debt charity  I spoke to StepChange.  Open a basic bank account in your own name. 

sourcrates

Household income is used to determine your budget, an "IPA" (Income payment arrangement) has to be agreed before you are discharged, an IPA typically lasts for 3 years.

Her wages will not be "taken away" but your budget will be formulated on the basis of household expenditure, however the allowances are quite generous, but any disposable income over £20 will mean an IPA will be granted.

You need proper advice on the legal status of the property, and the value of the car you gave away might be an issue if it was over 2k.

fatbelly

We would not normally advise a property owner to go bankrupt but with so little beneficial interest in it I can see why it is an option.

The caveat as always is that the OR has 3 years to act and none of us have a crystal ball to know what house values will be then.

You might get away with a charge on the house

The car you gave away will be looked at as an asset and I have known the OR ask the new owner for the value. Mind you, they gave up once they found the new owner was unemployed and on benefits.

Your partner will become solely liable for the joint overdraft debt

You will have to make out a case for the finance car being essential and public transport not suitable. That could go either way