Bankruptcy advice

itsallrigged

Hi all, 

I am planning to file for bankruptcy around May this year. Most of my debts are now defaulting and that’s chugging away nicely, the ones that have defaulted, I’m paying £1 to, but I suddenly realised both my pay monthly car insurance (car needed for work in remote location) and my (and my partners) phones are all credit agreements! Totally overlooked this thinking of the obvious stuff. I presume the phones won’t be aloud, I’ve already got a basic sim package for myself & £7 a month and I’ll aquire a basic phone from somewhere. My partner is going to sort her own out through her bank, no issues there. I plan to Simply send the phones back and the remainder balance goes on the bankruptcy, is this the correct procedure here? 

I’ve stopped HP payments this month, as the car is “protected goods” (over 1/3rd paid) I’ve read this buys me a few months to use the payments to buy a cheap roadworthy replacement, then the car is auctioned off and the remaining balance is on the bankruptcy is this correct pleas? 

My main question is regarding the car insurance and what’s the norm here. It’s a new policy as I’ve just done the renewal, I had simply planned to change the registration when I squire the new car. Based on what I have read online, there is a high chance the car insurance company will cancel the policy due to the credit agreement aspect. Do I push my bankruptcy to June / July to allow time for me to save and pay for either a. A new policy in full pre bankruptcy or b. Pay off my current policy, my concern here is its credit and if done right before BR the OR will see it as me not treating creditors equally. 

Any advice would be much appreciated, it strikes me not everything I have read online will be accurate and the car insurance is the most consequential due to 3 points & a claim in the last year so my premiums are over £1k a year despite 9 years “no claims” 

thank you all for any advise

Isthisforreal99

I'm no expert but won't the bankruptcy itself cause an increase in premiums or lead to cancellation if the underwriter doesn't cover bankrupts - so paying in full prior to bankruptcy may still lead to cancellation or at least an increase in premiums. Again, my understanding is that even with a fully paid up annual policy you would be required to inform them of your bankruptcy - it's a material fact.

la531983

itsallrigged said:

Hi all, 

I am planning to file for bankruptcy around May this year. Most of my debts are now defaulting and that’s chugging away nicely, the ones that have defaulted, I’m paying £1 to, but I suddenly realised both my pay monthly car insurance (car needed for work in remote location) and my (and my partners) phones are all credit agreements! Totally overlooked this thinking of the obvious stuff. I presume the phones won’t be aloud, I’ve already got a basic sim package for myself & £7 a month and I’ll aquire a basic phone from somewhere. My partner is going to sort her own out through her bank, no issues there. I plan to Simply send the phones back and the remainder balance goes on the bankruptcy, is this the correct procedure here? 

I’ve stopped HP payments this month, as the car is “protected goods” (over 1/3rd paid) I’ve read this buys me a few months to use the payments to buy a cheap roadworthy replacement, then the car is auctioned off and the remaining balance is on the bankruptcy is this correct pleas? 

My main question is regarding the car insurance and what’s the norm here. It’s a new policy as I’ve just done the renewal, I had simply planned to change the registration when I squire the new car. Based on what I have read online, there is a high chance the car insurance company will cancel the policy due to the credit agreement aspect. Do I push my bankruptcy to June / July to allow time for me to save and pay for either a. A new policy in full pre bankruptcy or b. Pay off my current policy, my concern here is its credit and if done right before BR the OR will see it as me not treating creditors equally. 

Any advice would be much appreciated, it strikes me not everything I have read online will be accurate and the car insurance is the most consequential due to 3 points & a claim in the last year so my premiums are over £1k a year despite 9 years “no claims” 

thank you all for any advise

If you are paying the phones/car insurance no issue its not worth mentioning, if you really want to lob them in thats up to you. The agreements wont just suddenly stop because you have gone BK. Trust me.

Grumpelstiltskin

Which debt charity have advised you bankruptcy is the best way forward?

fatbelly

I have commented on your previous threads and note that i wrote

If you really wanted an insolvency solution then it would be bankruptcy with a 36-month income payment order but you would lose your car and emergency fund, and any windfall.

So it sounds like you are almost ready


I think I would get the new car and a year's insurance on it before pressing the button.

itsallrigged

@ Grumpelstiltskin I have not approached a debt charity yet, but I will get that advice when it gets closer to the time, I may need to invoke 60 days breathing space yet as one creditor has started suggesting "TM legal" will be in touch if I don't increase my payments. Leaving the breathing space and therefore the advice on the table gives me 60 days (so 2 paydays) to prepare and get advice, hopefully Ill get to may/June without using breathing space and simply get advice from a debt charity in the weeks before pressing the button. 

I have left to save for the replacement car, a new insurance policy paid in full and the BR fee . Having spoken already with posters on here, with no assets at all and circa £87k debt (car included) its looking highly like BR. The debt is going up monthly with a variety of interest and fees, but I am trying not to focus on this, whatever they add at this stage its highly unlikely they are getting it.

Regarding the replacement car can anyone give a rough idea what is acceptable to spend? I'm not precious about what vehicle it is providing I can get 200 miles a week to and from work and ideally has a long MOT on it. 

RAS

I'd suggest you first research public transport costs to and from work? As you need to prove that you need a car, not that you'd prefer to use one.

Issues might be shift working, or transport routes that stop before you can use them to get home, or don't start before you need to leave for work. Or living where there is no public transport.

I'm saying this as someone who did 19.5 miles each way for years, and got "free" social travel as part of the annual pass. 

Google is definitely you friend when looking at those costs.

And at the current car value. The amount allowed to buy a new car increased recently to £3250, less then those on DROs get. 

I'd suggest you start talking to Stepchange, or at least reading their website. 

fatbelly

It's the value of the car that matters, as given on Parker's guide.

You could spend 5k on a car but it it's valued under £3250(and possibly under £4k) on the dste of bankruptcy then you can keep it provided you can show it is needed.

ManyWays

one creditor has started suggesting "TM legal" will be in touch if I don't increase my payments
are you making any payments to these debts at the moment?
If you intend to go bankrupt (and I too think you should take advice on bankruptcy before doing this) then it doesnt matter what TM Legal do. It will take months before they start any legal action and if you do somehow get a CCJ before going bankrupt, that is just wiped out in the bankruptcy.

itsallrigged

@ManyWays yes I am paying any that have defaulted are getting £1 a month at the moment, including the company threatening that tm legal will get involved soon. 

@fatbelly thanks for the top info as always 

@RAS I’ve kept an open mind researching this in the last few hours, it’s a rural area with bad bus routes (relies on 3 changes or 1 train and 1 bus), there’s a service that gets me to work 40 minutes late but I would not the be able to drop the kids off at school and they are too young to walk & care for themselves on a morning. The return journey sets off back a hour earlier than I finish in summer. Taxis are £50 each way, nearest train station is about 8 miles, but this is included in the earlier train / bus option. I guess I need to prepare this information for the OR if & when the time comes. 

Thank you all for your advice and support. 

luvchocolate

I'd payed my car insurance for the year..when I went BR I called them and they had no problem with continue to insure me...my car was exempt due to low value. 

My contents insurance were different..also payed in full but they cancelled it when I notified them