Shall we go bankrupt?

Rosey321

dalip wrote: »

As far as what you are saying about the car i would hold fire until one of the experts comes along as not sure of the implcations.

Yes, my brother has just raised a very good point with me on this one, stating that if the in-laws paid the rent up front, they would in effect be one of our creditors. If we then paid the money straight back after the car sale, would we then be giving them (as creditors) preferential treatment over our other creditors. How would the OR react to this? I assume that if we asked a cheque to be made out to their name from a car sale, that would be classed as giving an asset over too?
I think there's not a problem as such in using the car sale to fund the upfront rent - but obviously there's a fine line to tread with who pays what to who and when!
Ideally, I guess we need to sell the car quickly ourselves so no other parties are involved. It's just a timescale thing really - the rent might be approval tomorrow for instance whereas the car could take longer to sell, cheque to clear etc etc.

If any of the experts could assist that would be great!

Persolv0

Hello again and good to see your making progress

Im certainly no expert but as already stated be very careful how you move money around just now and i think the advice will be to avoid taking a loan from your family as they will then be classified with other creditors and loan written off(It would be too demanding to repay from your surplus.

You have nt suggested doing it but do remember that selling the car under value is frowned upon also.

I think perhaps your best way forward is selling the car to raise the 6 months rent but do wait for more solid advice

best wishes R

Rosey321

Many thanks.

Yes, it's certainly a worry how to play this. On the one hand, it would be nice if it was deemed that it was common sense in that the only way that we can move and reduce our outgoings and survive - is to be able to secure this property now, which may have to be a due to a quick 'loan' which we could repay straight away on sale of the car.
However, obviously with the OR I know it's far more 'black and white' and everything is based on creditors - I'm not sure how much they would deem this a reasonable reason though?
If the above did happen, could it be deemed severe enough to impose a BRO, or is that done for real extravagant goings on and blatant squandering of money for no reason?
Failing that, could the in-laws buy the car from us? That way, it wouldn't be a loan and they could then sell the car in their own good time.

My wife is going round the garages today to get some quotes and offers - hopefully, a realistic offer may be made to her and we can get a cheque just made out to us to avoid all the above. Thanks for advice on making sure that we don't accept too low an offer as well.

Any more opinions greatly recieved,

Rosey321

Excellent - sounds like the local Renault garage are happy to buy it from us today and give us the cheque today. The quote we received today was from a different employee who offered us £500 more than one of his colleagues last week!! We have got what I would deem to be a fair price too therefore.

The in-laws are still happy to pay this rent for us and for us to pay them back once cheque clears or for the cheque to be made out to them. My gut reaction is still to ensure the cheque is made out to us today, and then by the end of the week, we will be able to write a cheque ourselves to the letting agency without involving in-laws in the payment process at all.

Does this sound much better?

Rosey321

Hee hee! - new update. We have been approved for the rent of the flat without the need for 6 months upfront!! Apparently, we passed the credit checks anyway, despite our DMPS etc!

Next interesting point now is that the car is due to be sold in half an hour! I'm guessing we shouldn't have this cash in our account when we go BR. Is it wise therefore to just pay 6 months upfront anyway? I'm guessing that OR make checks with DVLA and there's no way we could otherwise justify keeping the cash or making a cheque payable elsewhere.

dalip

Congrats on getting the flat.

I am still not sure that the OR will not see the selling of your car as getting rid of an asset. Would be very careul if i was you. Get it clarified by someone in the know before you do anything. Th OR does check with the DVLA.

Rosey321

Thanks for congrats.

I think we have decided that the car sale money must come to us - there's no point risking any non-compliance with the OR. Therefore, no aspect of this transaction will touch the in-laws.

We do need the cash for the deposit of course as well as rent, so I think this would be reasonable. This will give us the option of paying 6 months upfront too which might be the next best justifiable way of using the money wisely and legitimately (I hope).

Another thing, we've incurred a few costs lately for the credit search, solicitor fees, we are going to have to pay HIP costs as a result of our house sale inevitably falling through. We also will have the BR fees etc. Could we reasonably use these costs to pay these people or will even the likes of solicitors, estate agents be classed as creditors?

The Debtline did suggest I phone the local OR office for advice, even though we are not BR yet! My fingers may be dialling soon...!

dalip

Luckily for me i had no house involved with my bc so can not advise i'm afraid.Do know that if you do not pay crediors(should think that includes estate agent and solicitor)you must not pay anybody you owe money to as this will be seen as favouring a creditor. I am certain i have seen that you can ring the IS anonomously for advce. Yes i think the OR would be fine with you using the money for bc fees and rent.

Rosey321

Thanks for continuing advice.

I have another interesting question.
As it stands, we earn about 3 grand between us and the cost of mortgage, secure loans, credit cards, living, bills etc eats that up without any problem.

However, I've just been trying to do some kind of mental IPA in my head - and I'm a bit worried if you like that the amount of disposable income is actually a bit high!
For a start the NT code on our payrolls will raise our net pay by about £600 a month, the lack of secured loans will leave another £850 available, our rent will be £200 less than our mortgage and things like council tax, gas, leccy, petrol will all decrease as a consequence of our move.

Therefore, bearing all in mind, after living expenses we could have about £1500-£2000 disposable! Does this exceed any king of ceiling or make us not meet BR criteria in any way? The fact of the matter is that if forced to stay where we are like the loan companies want to do, we have no chance of beating the debt whereas taking the BR route 'seems' to leave us with more to spare - more than I thought it would anyway.
Obviously there will be 70% removed from this figure but the remaining 30% left at our disposal after outgoings (around £500) seems a lot?

Have I got anything to worry about? Can they raise the 70% bar? Will they recommend another course of action, or does the amount not matter as they will just deduct regardless of disposable income? (after all, high-paid celebs seem to go BR all the time as well!) Any advice?

dalip

Hi Rosey
As far as i am aware there is no such thing as bc criteria. Regardless of what your d/i will be after bc it does not alter the fact that you are insolvent now. The allowances are much more generous with bc than they are on a DMP or IVA so you may well be surprised by how much you will still have left over. When you have a few figures or you I&E post it up here an we will have a look and add our little bits of advice in order to give you the best possible shot at it.
With the NT( i think it's a NT IPA) that is paid seperate to an IPA.So that will Not make any difference to your figures for an income based IPA. Does that make sense to you:D ?. If not perhaps sombdy who is a littlemore articulate will come along.:o