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| T O P I C R E V I E W |
| dijstra |
Posted - 31 January 2010 : 19:40:11
I'm now convinced that I'm going to have to declare my self bankrupt, I have a single debt of c£300k from supporting a now failed business. It is only a matter of time (1-2 months) before the creditor pushed the button so I prefer to do it myself.
My other business generates an income me and if I cut spending to the limits based on the OR's recommendation we have about £2500 per month disposable income. The income is very sporadic sometimes £40k gross in a month then nothing for five months. I have maybe £35k in assets including my share in the house (we mortgaged it to hilt support the failed business) .
If it wasn't for the one debt we would not be in this trouble
I have a few questions.
1) Can I prepare for the inevitable. Buy a less expensive car and hand back (defaulting on the current lease), buy the kids bd presents early, switch mobile phones for a cheaper one, cancel insurances, pensions, make redundant and pay off a family member who works for us in the surviving business before the personal BR etc... generally get ready for it or is this frowned upon. How much will the OR look at the last few months?
2) Will the OR allow me to spread my income over a rolling 12 month period so that I can support the family on the average or will a big payment one month result in us getting just the basis allowance then nothing for 4 months?
3) Do we separate our joint accounts ready and how much should I put into each pot from my income.
4) Is the maximum amount of 70% of disposable income taken from net or gross income if I have a NT tax code? i.e. if I earn £4500 gross in a month and disposable income is £2500 is the 70% take of the OR 70% of the net income after tax or before it? So do we get £750 (30% of £2500) or £450 (30% of net after tax)
The last is most interesting because we could bizarrely find ourselves with more money each month after bankruptcy as I have been taking a minimal salary and cross funding to support the now failed business.
I'm sure that I'll have a million other questions so thanks in advance for your advice.
Dij |
| 11 L A T E S T R E P L I E S (Newest First) |
| dijstra |
Posted - 01 February 2010 : 20:45:50
Get expert advice ... I am seeing my accountant next week and a specialist IP ... so I get the message.
The car def mine and will get swallowed up in BR. Bro will have to be listed as an unsecured creditor I think as we have no paperwork, the car transferred ownership 5-6 years ago just never got round to paying him and he has often suggested he gets my bike as payment he's loaded but it will sting if i default on his debt.
On buying a car I'm gonna wait till after the BR the OR has to give me money to buy one and we can establish then if my wife can top it up which i have seen in some case studies.
in the great panoply of life three years of tougher times and three more maybe of awkward times is a small blip ...
Thanks for the support guys
Dij
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| chester2005 |
Posted - 01 February 2010 : 17:06:29
i would reiterate the need to speak to an expert like Paul Johns at RevivaUK www.revivauk.com
some cases require careful consideration and planning from the outset so that you can maintain control of the situation.
I would humbly suggest that your case may be one of those.
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurhman)
RevivaUK and Paul Johns helped me through it all i can't recommend them enough!! |
| Housing |
Posted - 01 February 2010 : 16:40:37
Hi again Dij,
Agreed - as Oscar Wilde said, "Life is a bitch and then you die"
I too was successful and had 6 figure income for a number of years and then fell down last year and filed for BR - was not what I wanted, but hey, I have a fab wife, 4 great daughters and 3 fantastic grandchildren... The sun shines most days and as the song went, "...things can only get better..." And, of course, they will.
Wish you well, Richard
"Life is generally something that happens elsewhere" (Alan Bennett - author and one of my best heroes!!) |
| Richard P |
Posted - 01 February 2010 : 16:13:15
Hi Dijsta
my favourite bankruptcy song is summer breeze, the chorus is something about the tax man taking my final dues or every penny or has dementia finally set in !
ref your comment, please do not under estimate the investigative power of the OR.
you cannot show preferential treatment to one creditor against another and you def cant put £2K away for a new car
some would say that as your brothers car does not have any paper work get it back to him and anul that debt, having said that i would be nervous with that action, I suppose it depends on time frame and how active the big creditors is ?
If you are still fighting the big creditor it may take a year for issues to be resolved
but as stated above best to get correct research and planning done now
regards Richard |
| dijstra |
Posted - 01 February 2010 : 15:30:06
On the car thing. Can my wife buy me a more expensive car to use than £2000, and is it better to do it after the BR. I put in £2000 and she puts in say another £2-3000 from her savings? Also can she adopt one of my debts, I bought a classic car from my brother but still owe him £15,000 on it, he's not chasing and won't but be happy to loose it. How do family agreements work as the debt has not proof along with it .... can I not include it and pay it back in three years time? Of course I would tell the OR if I need to.
Ta
Dij |
| dijstra |
Posted - 01 February 2010 : 15:25:32
Thanks Richard ... my favourite song is ChumbaWumbba - I get knocked down and I get up again ... pretty much how its been all my life gotta get up and get on really haven't you. Whats the worst that can happen? |
| Housing |
Posted - 01 February 2010 : 11:50:52
Hi again,
Just read your bio - made me smile!!
Good luck, Richard
"Life is generally something that happens elsewhere" (Alan Bennett - author and one of my best heroes!!) |
| gettingoutofdebt |
Posted - 01 February 2010 : 07:12:04
Hi Dijstra,
1. Buying a less expensive car is no problem. You would need to give any left over money from the sale to the OR so make sure you keep any receipts from the car sale/purchase. £2k is normally the limit for a car so anything less than that will be fine.
The OR will look very closely at your finances for the last 6-12 months prior to BR so be very careful what you do with any money. Using credit without the intention of paying it off is frowned on and could cause trouble in the future. You will find that you have more disposable income (DI) once you are BR and not paying creditors so buying presents after you are BR shouldn't be a problem.
2. If you pay an IPA (Income Payment Agreement) then this will be based on monthly DI. If you are self employed and earn a different amount each month then it is normal that the average of 3 months income is taken.
3. Taking your name off any joint accounts is a good idea as you will be only able to hold a basic bank account. You can either have any money paid into your wife's account (once your name is removed) or you can open a Co-op Cashminder account as they are very BR friendly.
4. The IPA is taken from net income. If your net income is £2500 then you would be allowed a certain amount for food, utility bills, etc. and the IPA would be between 50% and 70% of the remaining amount i.e. Your net income is £2500, you spend £1500 on food, rent, utility bills. The IPA would be 70% of the remaining £1k.
Paradoxically you will probably find yourself better off once you are BR, which is the same for most people. People generally think that once you are BR you have absolutely no money and struggle to buy the necessary items but most people find they manage a lot better once BR.
I would also recommend you speak to the following companies:
Reviva UK: http://www.revivauk.com/
Jones Giles - http://www.jonesgiles.co.uk/
They both post on this board and are very highly respected. I don't have any experience with business BRs and it is worth planning the BR carefully to make sure there aren't any nasty surprises.
As you have a couple of months before the creditors come knocking at the door RevivaUk or Jones Giles will be able to advise the best course of action. |
| Richard P |
Posted - 31 January 2010 : 21:31:25
Hi Dijstra
welcome to the forum and sorry to read about your predicament.
I also found it very calming to finally make the decision to go BR.
It is best to control the buttons adn you decide the time frame
I would also support Richard (Housing)endorsement of speaking to one of the experts before you actually take the plunge.
Paul and His team at Reviva, were fantastic at helping to plan and realign my financial position, they also helped me stretch the inevitable decision until I was ready and not at the speed of my creditor ( I meant creditors and there where lots n lots)
regards Richard |
| dijstra |
Posted - 31 January 2010 : 21:24:00
Thanks Richard
I'm not despairing. I actually feel much calmer now that I've got to the point of understanding I cant fight my way out of it and am looking forward not working 80 hour weeks juggling too many things. I have to resign all my NED's (ironically reducing my income) and my chairmanship of a charity which will free up loads of time.
I've got a day booked with my accountants in February to go through it and then I'll talk to a IP, once i know the total situation.
On property my wife can buy my share of house out easily with her savings, we may have to downsize because we have a large mortgage (£300k) but a distress sale would seriously cut the equity in the house as we are currently having it underpinned following subsidence .. another reason I have no money the house cost £50k to put right last year. The mortgage payments may be high for the OR and would appreciate advice on the likely hood of OR agreeing to £2k per month payment.
Ta
Dij
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| Housing |
Posted - 31 January 2010 : 20:47:07
Hi dijstra
Welcome to the forum.
I suggest that it might be worth speaking to one of the insolvency experts that post on this forum - you will see the experts on the left hand side of the page.
It will then be possible to look at your options.
Please do not despair, there is a way through although you may feel that your situation is so severe.
I am sure there are solutions for your situation - I am happy to assist with the property issue with cyber advice - but get thge insolvency expertise first of all
Regards, Richard
"Life is generally something that happens elsewhere" (Alan Bennett - author and one of my best heroes!!) |
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