Advised to go Bankrupt

Debtless_2

Hi all new here, i was advised by payplan thhat bankruptcy was my best option and would like a few answers.

i currently owe 31k to 6 creditors

northern rock 19k loan
mbna 3500 Credit card
barclays 700 Credit card
Lloyds tsb 2400 overdraft
Lloyds tsb 3k Credit card
Halifax 1k overdraft
Egg Credit card 1k

my present income is around 850 a month

i live with my partner and 1 yr old daughter in rented accomodation, we have no possesions worth over £300 apart from my car which i need to get to work and thats not worth more than 3k and is 14 years old.

what i would like to know is how will going bankrupt affect me? will i lose my car how does it affect my bank accounts etc i must point out that all the debt is in my name and i have run out of money to pay my creditors anything i have a few payment plans set up as follows

northern rock £100 a month (not paid for 2 months)
egg £30 amonth
mbna £40 a month
LLoyds tsb cc £40 a month ( 2 months behind)
Lloyds tsb overdraft £10 a month
halifax wages paid into that account
Barclays credit card £16 amonth
CCJ £10 a month

at this moment in time i have no money to buy food or pay my utility bills i make sure my rent and council tax is paid every month.

any advice or help graefully recieved.

tight_jock

Hi and welcome.
Firstly, if you are decided to go BR based on professional advice then stop paying anything but rent,council tax and utility bills.
This will give you a few quid to live on and save for your fees.

The car may not be taken if you can demonstrate that you need it for work

Any bank accounts you hold will be frozen but there are other alternatives in a sticky at the top of the threads page.
Ask away if you have any other queries. Someone is here most of the time.

betterlatethannever

Hi Debtless and welcome.
Firstly, have you checked your receiving all the benefits your entitled too. try here http://www.entitledto.co.uk/. You shouldn't have so little coming in that you can't afford food etc.
The car may well be lost if you go BR, but they will allow you some money to buy a cheaper car. Its a bit of a grey area but generally if the car is worth over 1k then they take it.
Your bank account will be frozen by the bank once your BR but you can open a new one with the co-op or barclays (see the sticky on the first page about bank accounts for bankrupts)
You will have to pay a fee to go BR and thats £150 court fee (you will probably be exempt as you are on low income) but you will have to pay the OR fee of £360.
If your going BR its best to stop paying all your creditors. This will allow you to save up the money for fees and, if you continue to pay some but not others this will be seen as preferrential treatment of creditors and could cause you problems.
Any other questions then please ask away and good luck

Debtless_2

cheers for the advice, with regards to keeping a car, my work is 9 miles away and i start 2am in the morning there are no bus services or trains do you think that would be enough to keep the car, and if i have to sell it can i sell it to relatives?

i am recieving benefits forgot to add that ealier, but with the bank charges for going overdraw and what not they are gone before we get them.

G-G_4

They might ask you to sell the car and buy one worth more like £1,500 or less.. but, this depends how nice your OR is..

debt_doctor

You can sell it to who you like so long as the or gets the money and it is sold for a reasonable price. Are you sure your 14 yr old car is worth 3K ? You certainly need the car for work, I would put a strong argument to keep it if I were you.

DD

rog2

I would advise that you arrange for your benefits to be paid into your partner's account, or that of a trusted family member, with immediate effect.
Benefits will not be used for the calculation of any IPA and you are probably going to 'lose' your bank account, so why use your benefits to reduce your 'debt' to the bank?
Are you sure of the value of your car - there aren't many 14 year old cars that fetch that sort of money. As previously stated, the whole area of cars and bankruptcy is very grey - different OR's interpret the 'guidelines' differently, but, generally, if a car is worth only around £1k, and you have, as you appear to have, a strong case for keeping it, then you are unlikely to 'lose' it. If the OR did decide to 'sieze' it, then he should provide you with sufficient funds to buy a cheaper car.
If the value were, say, around the £500 mark and you were to sell it to a family member in order to 'raise the funds necessary for court fees' then there would be no problem with that - especially if the person that you sold it to was to 'allow you the use of it' in order to get to work.

josoap_2

hi there my car is worth 2000, the CAB and OR both advised they only would take it if it was worth over 2000, and because i needed it for work they never mentioned it xo

tigerfeet2006

I believe that the OR uses Parkers guide to work out car prices.

http://www.parkers.co.uk/

Though if you get a couple of independat valuations I believe they are happy with that.

Debtless_2

the problem is my car is not listed in parkers its an import.

mitsubishi delica 1994 m reg 95k on the clock.

either way i think i will go ahead with the bankruptcy do i get the forms from the court and will any county court do?

as for my creditors i will palm them off for now with letters and the likes to gain an extra couple of months so i can pay the court fees.

tigerfeet2006

You can either phone your local county court and ask them what their procedure for BR is. Different courts can operate different systems. They will send you the forms as well.

or

These are the forms so you can see for yourself. They look daunting, but an advisor and/or we can help you if you get stuck.

Debtors Bankruptcy Petition:

http://www.insolvency.gov.uk/pdfs/forms/form6-27.pdf

Statement of Affairs (Debtor's Petition):

http://www.insolvency.gov.uk/pdfs/forms/6-28.pdf

Plus you need to read the guidance notes which give some basic help in filling them in.

Statement of Affairs (Debtors Petition) (Guidance Notes):

http://www.insolvency.gov.uk/pdfs/fo...rsguidance.pdf

Any questions about filling them in just ask.

Might be worth trying to find out exactly what the car is worth from a garage.