confused about Bankruptcy

NoClue_2

Just reading through all these threads to get any idea of how to get a grip back on my life, but I'm now more confused than ever.

I have been considering Bankruptcy, but from what I've been reading here if I declare bankruptcy everything we own will be taken and I'll STILL have to pay the creditors!?

I thought the point was that I can't pay!

Can someone clear it up for me?

Cheers

Toon_Dave

good morning Noclue and welcome to the site.

firstly well done for asking for assistance. i was also very confused this week when i started enquiring what i could do, i have around £140,000 debt including mortgage and Secured loan + 50,000 unssecured.

Have you spoken to any of the free debt charities yet, either the CAB or CCCS.

links below.

http://www.cccs.co.uk/
http://www.citizensadvice.org.uk/

Bankruptcy is a massive decision, have you been able to work out you income and expenditure per month? if so post it on here and we'll have a look and see what may be the case for your self if you go bankrupt.

Generally speaking with BR, the amount you have to pay back, called an IPA - income payments arrangment, is dependent on surplus income left after required monthly spends - ie, rent/mortgage, living costs, council tax etc...

So probably best to post you SOA on here...try this link to creat one.

http://www.makesenseofcards.com/soacalc.html

any other advice we will try and offer..someone with more experience will be along soon to offer more advice.

Dave.

NoClue_2

No I haven't spoken to anyone yet - too terrified and have been doing the usual (burying me head and hoping it will all work out in the end).

I feel physically sick just thinking about the debts.

Ok History:-

My wife and I are self employed photographers. We sold our house to start our own business (sole traders) doing weddings, events, portraits, etc.
We've been living off the money from the house.
Bought all the kit with a mix of money from house and creditcards.
Money from the house ran out about 18 months ago, at which point we got a loan from Barclays (pre-approved as I was a customer for over 20 years) in the hope that the business would pick up.

It has to an extent. We have bookings for this year and enquiries for next year - but very few. This year our total income AT THE MOMENT stands at about £4000. But we're getting enquiries every day so things may get better.

Over the last 6 months we've sold of almost all our kit. When we get a job now we borrow or hire what we need.

And to top it all off the landlord has just called to say he's selling the house!

Our out going each month is almost £2000, our income is £0 at the moment. SOACALC doesn't work because I can't put an income in.

I feel so sick. I KNOW the business will work. We are getting bookings - more and more each day. But they are for 8 - 12 months away which means we don't see the moeny until then except deposits (£150).

If we could find a way to last another 12 months we'd be laughing. But no bank will touch us without a property to secure for a loan.

If the business folds we will both be on the dole, so can't pay anything anyway.

I don't know what to do for the best. Can anyone lend me a gun or bottle of sleeping pills? (sorry, bad joke! - but it can feel like that sometimes).

JCS1

Please speak to one of the debt charities for their advice, this is one of the first things you need to do.

With regards to paying money back to creditors, the OR would look at your income against outgoings, if there was a suprlus (has to be £100 p/m first) then they would look to take a percentage as payment towards your debts for a period of 36 months. NB, it often doesn't reach your creditors, the OR gets paid first.

Dealing with debts is hard to do, but there are people at the debt charities and on this forum who will help you through the process.

Toon_Dave

NoClue wrote: »

No I haven't spoken to anyone yet - too terrified and have been doing the usual (burying me head and hoping it will all work out in the end).

I feel physically sick just thinking about the debts.

Ok History:-

My wife and I are self employed photographers. We sold our house to start our own business (sole traders) doing weddings, events, portraits, etc.
We've been living off the money from the house.
Bought all the kit with a mix of money from house and creditcards.
Money from the house ran out about 18 months ago, at which point we got a loan from Barclays (pre-approved as I was a customer for over 20 years) in the hope that the business would pick up.

It has to an extent. We have bookings for this year and enquiries for next year - but very few. This year our total income AT THE MOMENT stands at about £4000. But we're getting enquiries every day so things may get better.

Over the last 6 months we've sold of almost all our kit. When we get a job now we borrow or hire what we need.

And to top it all off the landlord has just called to say he's selling the house!

because of this you may get priority with local authority, which although im sure you dont want to go that route will put a rood over your head. This is classed as being forced homeless so will be given extra priority points for rental. Its worth a try.

Our out going each month is almost £2000, our income is £0 at the moment. SOACALC doesn't work because I can't put an income in.

Can you put in a months deposit or something to at least let it work out some I&E for you? Do you want to list monthly expenditure and we'll see if can offer advice on reducing it, even in the short term to make life more bearable?

I feel so sick. I KNOW the business will work. We are getting bookings - more and more each day. But they are for 8 - 12 months away which means we don't see the moeny until then except deposits (£150).

If we could find a way to last another 12 months we'd be laughing. But no bank will touch us without a property to secure for a loan.

Any family or friends who can assist? im sure you dont want to ask them, but when needs must, pride has to be swallowed unfortunately, trust me on this, i know big style!

If the business folds we will both be on the dole, so can't pay anything anyway.

I don't know what to do for the best. Can anyone lend me a gun or bottle of sleeping pills? (sorry, bad joke! - but it can feel like that sometimes).

I know exactly how you feel with your last comment. I admit to being in hospital few weeks back because of and 'incident' with pills and Southern Comfort!...what did it solve?? nothing, still here, have to face up to the fact that i can sort things. if that means BR and starting afresh well so be it...at least im still alive to tell the tale and my family are 100% behind me.

I certainly think your first thing to do is to contact one of the free advice centres, either CCCS or CAB, these can be done anonymously in the first instance, but to be honest admiting you cant cope any more is the first big hurdle and you have leaped over that coming on here. They are trully non judgemental and actually just talking it over is fantastic therapy in itself, even coming on here has made me feel so much more positive and there is always light at the end and always some way of resolving the problems.

so please post your expenditure and lets see if we can assist in saving you some cash in the short term.

Dave.

wherediditallgo

Hi NoClue,

Don't worry about using the SOACALC link - if you have a look through other threads here, you'll see other people's figures (sometimes they're listed as SOA, or I+E, or I&E - you'll find them). The I&E is is a list of your income & then another list of your outgoings including what's supposed to be going on your debts, then you just deduct one from the other to show whether you've got any money left each month. Some of us will have a look at it for you, & then give you an idea of what the OR will allow you money for, where they may query the amount & things they may have an issue with eg cars. When you do your SOA, it'll be structured slightly differently, so that you can satisfactorily enter it on the BR paperwork.

As for how you're feeling at the moment, I can understand your frustration. Please ring the Insolvency Helpline (the number's in my signature), as I think they have a section dealing with business debts & their website has lots of info that will help you. Try not to let the situation get you down too much - even if you go BR, you're usually allowed to keep the tools of your trade, in which case it may be possible for the business to still exist with your wife at the helm, & without the other debts weighing you down you might be able to make more of a go of it.

Toon_Dave

JCS1 wrote: »

Please speak to one of the debt charities for their advice, this is one of the first things you need to do.

With regards to paying money back to creditors, the OR would look at your income against outgoings, if there was a suprlus (has to be £100 p/m first) then they would look to take a percentage as payment towards your debts for a period of 36 months. NB, it often doesn't reach your creditors, the OR gets paid first.

Dealing with debts is hard to do, but there are people at the debt charities and on this forum who will help you through the process.

hi jcs1, my IP advisor gave me the figures yesterday for paying back under an IVA for 36months and i was actually quite surprised how low a percentage you actually pay back after BR...which is good news. i will try and list them as best as i understand them.

First £100 surplus is not counted towards IVA (extra contingency fund)
100 - 250 - 50% paid out so if £200 surplus - £100 paid to OR
250 - 340 - 66% paid out so if £300 surplus - £198 paid to OR
340 + - 70% paid out so if £350 surplus - £245 paid to OR

These are all after you have paid for essential expenditure.

i think thats correct as i understand it.

Dave.

fermi

Looks about right Dave.

EDIT: I think you've missed out a band.

Short Table (Summary).



Full Table.

This is a table of IPA percentages that you can expect to pay on any surplus income:

1st Column=SURPLUS INCOME
2nd Column=% OF DISPOSABLE INCOME
3rd Column= AMOUNT TO BE PAID

Toon_Dave

Cheers Fermi,

i've learned so much more this week about everything, wish i had enlisted more help over a year ago now when it first started.

i will copy your spreadsheet data if thats ok with you for my reference and assisitance in future.

i think i will 're-jig' my SOA too looking at the full picture for paying back surplus....after all i'm sure i'll have an 'emergency' or 'holdiay' needed in next 12 months (wink wink). oh and i need regular eye checks and dentist visits - actually thats true....ish!


Dave.

NoClue_2

CAB is closed until Wednesday and then it's appointments only. So I'll have to go in on Wednesday and make an appointment which will have to be week after next as they are only open a few days each week.

Typically the CCCS say they can't help because we're self employed - grrr!

An accountant friend mentioned to me today that I should have been claiming benefits for the last 4 years because we are on a low income. Last time I was in the job centre I was told we are not entitled to anything because we're self employed! So does that mean I've been screwed over for the last 4 years!?

debt_doctor

An accountant friend mentioned to me today that I should have been claiming benefits for the last 4 years because we are on a low income. Last time I was in the job centre I was told we are not entitled to anything because we're self employed! So does that mean I've been screwed over for the last 4 years!?[/quote]


Self employed people can claim most types of benefits.

DD