Bankruptcy Fee's & Rental Money

Jaelor · 11 March 2006 at 9:56AM

Am in the process of going bankrupt - have decided to stay in our mortgaged house and see if they give us a few months grace to sort ourselves out.

I really want to avoid the whole 'bailiff' situation as I have a 6 month old son, but I am running out of time. I need to start paying childcare for my son at the beginning of April, and this will be £600 per month which makes it impossible for me to find money to pay my secured loan. I also don't have the money for 2 x bankruptcy fees and I also need to get a deposit together for rent plus one month in advance, which will come to around £1650.

How can I raise this? I'm sure I've heard of people on this site taking out there last remaining bits of credit for this, but surely that's something along the lines of 'using credit whilst knowing you cannot pay it back'??? Not sure what to do at the moment - very worried about a) bailiffs, b) being able to rent privately with a big black sod off mark against our names c) doing anything with money now that may get frowned on by the OR.

Any suggestions??

Addicted2Chocolate · 11 March 2006 at 1:36PM

i do not think using credit to raise bankruptcy fees would be conduct considered for a bankruptcy restrictions order. you coudl ring the central enquiry line 020 7291 6895 and make a written note of the name of the person you speak to, the date and time of the call, explain your situation and specifically ask ' if i were to raise funds for bankruptcy petition fees from credit would that be considered as misconduct for a bankruptcy restrictions order?' if they will not give you a specific answer ask to speak to someone in enforcement section who deals with BRO's.

creditcardking_2 · 11 March 2006 at 1:48PM

I would imagine that every person who ever went bankrupt would have used their last bit of available credit to pay the fee to declare themselves bankrupt. Where else would they get the money from? having to pay to go bankrupt has got to be the most ridiculous thing ever. I would aslo imagine that every person to declare bankruptcy would make sure each credit card is right up to the limit before doing so.

paul10mm · 11 March 2006 at 1:49PM

Hi ya
You will need someone as a guarantor if you try to rent while bankrupt and yes you will need the deposit in cash,We saw the OR last week and she did agree are rent was ok thats £850 a month and we were really worried about it we also asked if they needed to tell our agents it depends on the type of lease you have in our case she has said its ok and she wont need to tell them,ares comes up for renewal in june we really hope we can stay as we dont have anyone who could give us a guarantor
If you want to ask me anything you can send me a message at any time,we didnt take the money out on credit card we saved the cash took us 9 months and it was very stressfull!
Again check with someone I would have done it sooner if i could have raised the cash!!!!

fatbelly · 11 March 2006 at 4:10PM

Jaelor wrote:

I need to start paying childcare for my son at the beginning of April, and this will be £600 per month which makes it impossible for me to find money to pay my secured loan.

Two points here: don't you get 70% of childcare costs back through Working Tax Credit? Why are you even thinking about paying your secured loan (and mortgage) if you are going bankrupt and are resigned to losing the house?

Could't you save the £1650 over a few months if you didn't pay these bills?

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Jaelor · 11 March 2006 at 4:45PM

Hi Fatbelly - We don't qualify for the Working Tax Credit as we earn to much, so therefore get no help with childcare.

With regards to paying / not paying my mortgage and secured loan, I'm at a loss as to the right way around this. As of next month, my outgoings will exceed my income by around £600, which is more or less the cost of my secured loan. I guess I'm looking for the least painfree route of raising all the cash I need....yes, I could cancel the direct debits for my mortgage and loan, and that would give me the cash, but with a 6 month old baby, I don't want bailiffs etc, turning up. Also, I'll have a big black mark against my name when the letting agents do their searches.

Well and truly snookered at the mo.

im1dful · 11 March 2006 at 5:44PM

Addicted2Chocolate wrote:

i do not think using credit to raise bankruptcy fees would be conduct considered for a bankruptcy restrictions order. you coudl ring the central enquiry line 020 7291 6895 and make a written note of the name of the person you speak to, the date and time of the call, explain your situation and specifically ask ' if i were to raise funds for bankruptcy petition fees from credit would that be considered as misconduct for a bankruptcy restrictions order?' if they will not give you a specific answer ask to speak to someone in enforcement section who deals with BRO's.

I agree that borrowing to fund the deposit/fees probably won't be considered as misconduct. A large bank started to oppose the early discharge of bankrupts on the grounds that they had borrowed with no prospect of paying it back as it was for the deposit and a decision was made on high that not sufficient misconduct.

I would not advise contacting enforcement, they are not able to give advice to the public. I doubt you would even get through.

slash40 · 11 March 2006 at 6:03PM

hi, when i went bankrupt i cancelled all my loans etc for that month and withdrew every penny up to my o/d limit in order to pay the fees and pay necessary bills for that month (i went bankrupt at the beginning of the month). i also maxed out my credit card - not far from my limit anyway to stock up a bit of food.
when i had my o/r interview i admitted what i had done and they were ok. i think if i had spent the money on frivolous things it would have been different.
i was in rented accomodation, but if you have a mortgage even if they decide to take the house you will be given time to find alternative accomodation.

Jaelor · 12 March 2006 at 8:17PM

Didn't want to start a new thread, so thought I'd tag it on to this!

I understand that its difficult to rent during bankruptcy, but does it get easier once your discharged?

Sorry to ask all these 'green' questions - got so much whirring round in my head and, at the moment, I can see my and my son living with my Dad & wife in his poky 2 bed flat, whilst DH resides with his mother in her poky 2 bed flat 5 miles away :eek:

fatbelly · 13 March 2006 at 11:30AM

I would guess that there may be a problem with any agency that carries out a credit check - before or after discharge. What about getting the new accommodation lined up before going bankrupt?

On your earlier point about bailiffs - I think you are worrying uneccessarily. With secured lending the stages are as follows and you wil see that bailiffs only appear at the end of the process - by then you should have had ample time to make other arrangements. This material comes from the CAB:

stage one: a standard letter, sent by the lender, when the client has missed one or two payments. This will ask the client to make good any missed payments or to contact the lender to discuss the payment difficulties

stage two: a seven day letter, sent by the lender, when no satisfactory arrangement has been made and the client is in arrears of at least two months. This will require the client to clear the arrears or to contact the lender within seven days, otherwise the lender's solicitors will become involved

stage three: a seven day letter sent by the lender's solicitor requesting that the arrears be cleared in full or proposals for resolving the problem be made within seven days, otherwise possession proceedings will be started without any further notice

stage four: issue of a claim for possession of property, sent by the county court, approximately four to six weeks after the solicitor's letter in stage three, giving details about when the court hearing will take place and full details about the case. The lender also has to send a notice, addressed to 'the occupiers', to the property at least 14 days before stage five, stating that possession proceedings have started

stage five: the possession hearing, at which a district judge considers the claim and any proposals the client has to deal with the arrears

stage six: the judgment, when the judge will decide whether to adjourn the case, dismiss the case, make a suspended possession order, make a time order, or make an order for outright possession (with or without a money judgment)

stage seven: application for a warrant, which is made by the lender's solicitor where the judge has made an outright possession order or the client has not kept to the terms of a suspended possession order. The client does not have to be informed that the lender is applying for a warrant. Once obtained, the warrant is passed to the court bailiffs to carry out

stage eight: eviction, which is carried out by the bailiffs, who inform the borrower of the date and time of the eviction in advance. The bailiffs visit the property to make sure it is vacated and the locks are then changed.

Bankruptcy Fee's & Rental Money

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