| T O P I C R E V I E W |
| carl |
Posted - 28 June 2010 : 05:22:45
Hello I’m hoping someone on here can help me before I decide what to do.
Basically I owe approximately 18k on five credit cards and one overdraft (5 different banks). The debts started following divorce approx 4yrs ago and slowly go bigger and bigger due to me not getting any professional financial advice. Over the last few years I have swapped credit cards around onto 0% balances and slowly chipped away at the debt. I am now struggling to keep this up because banks are not offering the same deals as they have done in the past on 0% balance transfers etc.
My House is valued at 80-85k approx and I currently owe 73k on it. Along with this I have a 22k secured loan on the property which has approx 12 years to run. I can't re mortgage at present because I am tied in until June 2011 and even then there isn't enough equity to pull out of the house because it will be over a 100% mortgage which again the banks aren't doing anymore.
Meeting the mortgage and secured loan payment is no problem at all and I have never missed a payment or been late paying the credit cards but when the interest charge kicks in I don't think I will be able to meet the minimum fee which gives me about three months breathing space may be slightly longer.
I live alone aged 30 and I have my 4yrs old daughter who stops with me half the week. I received no form of Benefits/ Tax Credits etc
My monthly net income is approximately £1500.00 (Annual salary is 25k)
My core house bills total £1050.00 monthly, break down is follows
Mortgage 414.00
Secured loan 244.00
Child Maintenance 150.00
Council Tax 78.00
Electric 25.00
Gas 35.00
house ins 30.00
car ins 32.00
water rates 18.00
mobile telephone 25.00
The only assets that I have are my house and my Local Government Pension which I have paid in to for ten years.
The only other account that I have contributed to is my daughters Child Trust Fund which has approx £1500.00 in it made up of contributions from Family members.
I have spoken to some IVA companies and they have suggested that Bankruptcy would be my best option because I do not really have the spare income to live and make payments into my IVA.
If I decided to go Bankrupt I am confused with what may or may not happen with me house because there is basically no equity in it?
Also do I continue to make my monthly payments (mortgage and Secured Loan) while the Bankrupcy process is happening or do I just stop paying everything?
and final question about Bank Accounts. I undertand that all my accounts will be closed but at what stage am I allowed to open a basic account for my salary to be paid in to? Can I do that now or just before the process has started as long as I declare that I will be declared bankrupt?
Thank you for advice you can give me |
| 15 L A T E S T R E P L I E S (Newest First) |
| carl |
Posted - 09 July 2010 : 12:04:36
Hello another question if thats ok and anyone can help.
I work full time at my local Council and declaring myself as bankrupt doesn't affect my role within the Council and I would sooner try to limit the number of people who know that I will be bankrupt.
Am I right in thinking that I will get a zero tax code? What is this for and who gets the money that I would normally pay in Tax? How long would this zero tax code last for? and when does it usually start from?
Also looking at my Income at the start of this thread could anyone tell me if they think I will get a IPA or not?
The only outgoings I haven't included is £40 per week in fuel and £40 per week in food shopping
Thank you |
| gettingoutofdebt |
Posted - 05 July 2010 : 18:32:28
Have a look at http://forums.moneysavingexpert.com/showthread.php?t=677875. This shows you how your credit file will look once you declare BR and how it should look once you are discharged. There is a template that you can send to your creditors once you have been discharged in order that they update your file accordingly.
It will take 6 years from the date of your BR for your BR debts to fall off your credit file.
Your BR will be advertised in the London Gazette and will also be on the Insolvency Website. |
| carl |
Posted - 05 July 2010 : 15:19:44
Can anyone explain what happens to my credit report during the Bankruptcy process?
At the minute when I view my Experian report shows
Egg Visa ..... details of my account etc
HBOS Visa ... details of my account etc
I presume when I hand my forms in at court and they go to the OR that they will contact the relevant creditors and they will then record default against the outstanding Balance left on each card?
At what point do these creditors come off my credit file and how long does it take? Do I need to do anything?
and where does it show that I am bankrupt?
Thank you once again for all your help |
| debtinfo |
Posted - 04 July 2010 : 10:49:52
You seem to have asked most of the questions, nce you have the forms complete and are ready to go the actual process is fairly straight forward. If you havent done already, ring the court and see when they are booking appointments for.
The obvious things are, dont give stuff away, dont use any new credit, check your contracts (employment, insurance etc) to see if their is any mention of bankruptcy
apart from that it is realy just waiting for the day |
| carl |
Posted - 04 July 2010 : 10:35:33
Final question if that is ok
I have now opened my CoOp basic bank account and I should have my account details in the next few days. Once I've transferred my salar all my direct debits and standing orders across I will then be handing my paperwork into court and the long windy road of Bankruptcy will being.
My question is looking at my circumstances above can anyone advise me what may or may not happen in my case?
Is there anything I should be careful not to do? or is there anything at all that I must do that I may forget?
My forms have been completed truthfully and I haven't missed anything off. I think I am just trying to prepare myself for what may or may not happen.
|
| Skippy |
Posted - 02 July 2010 : 12:28:25
You would still be discharged after 12 months even if you decided to keep the property.
View my blog at http://skippy13.blogs.bankruptcyhelp.org.uk/
Only when the last tree has died, the last river has been poisoned and the last fish has been caught will we realise that we cannot eat money.
Last IPA payment made on 30th June 2010 - it's over at last! |
| carl |
Posted - 02 July 2010 : 12:23:40
Thank you Richard
The secured loan and Mortgage payments I can manage - am I right in thinking that once the OR offers me to purchase back the property for £1.00 plus costs that means there will be no future come backs on the property?
I guess I'm like everyone else and would like to be discharged A.S.A.P and I wondering if its worth the fight to eeep the property if it means the whole process may rumble on for a few years? |
| Richard P |
Posted - 02 July 2010 : 12:14:49
Hi Carl
as the property is in negative equity you will be entitled to stay in the property
however if you do stay in the property you will have to keep paying the Mortgage and second charge (secured loan), this decision does not have to be made when declaring BR. sit down and work out your finances to make certain that both charges are still affordable.
The OR has upto three years to decide if they want to force the sale so that they can release the equity to pay your creditors, if it is in negative equity the OR will likely sell the nominal benefical interest for £1 to you, midway through your bankruptcy
regards Richard |
| carl |
Posted - 02 July 2010 : 12:00:08
I am just going through the SOA form and I am just wondering what will or may happen with my property?
The property is mortgaged for £73,000 and has a £22,000 secured loan against it which has ten years to run. The property is currently valued at approx 80,000.00
In a idea world I would want to give the property up - its close to my daughter school - handy for work etc but in reality will I be allowed to keep it when there is little or no equity in it as long as I keep up the payments on the secured loan and mortgage Whilst going through the Bankruptcy process? also if I kept the property on would it mean that it may take me longer to get discharged? I'm sure I have read something that says after three years the mortgage company or secured loan company could force me to sell it at a later date to try and recover some extra money?
I guess I'm wondering if its worth fighting to keep the property on if it means that it will take me longer to get discharged?
confused!! |
| gettingoutofdebt |
Posted - 01 July 2010 : 18:51:28
There is a spreadsheet with the guideline amounts at http://www.insolvency.gov.uk/DocumentLibrary/Policy/Excel/Household%20Expenditur1.xls
Food is normally £200 per month for a single adult, clothing £30 and petrol is dependant upon the mileage you do. If the OR thinks that your petrol expenses are too high then you can just provide receipts to them.
Don't forget things like TV licence, MoT/Servicing for the car (£25 is normally allowed), road tax, dry cleaning if you wear a suit to work, dental/medical (worth putting £10 per month down even if you don't need anything at the moment). You can also claim for the Internet if your daughter needs it for education purposes.
You should really put down the figures that you actually spend but I would also suggest putting the max allowed in case of emergencies. I went BR 14 months ago and, luckily, put £10 for medical/dental even though I didn't need it at the time. 6 months after declaring BR I cracked a tooth and needed a crown so there went £200+. Although the £10 per month didn't cover it, it was certainly better than not having the £10 each month to go towards it. A similar situation with my car, £25pm for servicing/MoT is £300 per year and normally my servicing/MoT is about £170 but 2 months ago I needed a new centre/rear exhaust so that was £150.
Emergencies do happen and even if an IPA is 50%-70% of your DI so you do have some left over each month, the last thing you want is to start getting into debt again before you are discharged. |
| carl |
Posted - 01 July 2010 : 18:46:50
This forum is an absolute god send when it comes to getting information - thank you all!!
as people can see from the top of this thread, I have listed my current out goings. (These out goings exclude the monthly payments being made to Creditcard providers)
Can anyone tell me how much is set aside to live on (food and clothing)and petrol expenses by the OR when working out your DI??
Thank you once again |
| carl |
Posted - 01 July 2010 : 18:28:59
This forum is an absolute god send when it comes to getting information - thank you all!!
as people can see from the top of this thread, I have listed my current out goings. (These out goings exclude the monthly payments being made to Creditcard providers)
Can anyone tell me how much is set aside to live on (food and clothing)and petrol expenses by the OR when working out your DI??
Thank you once again |
| debtinfo |
Posted - 29 June 2010 : 18:44:54
You can lawfully bank with anyone you want to, it is that most banks wont want to give you an account. Barclays will give you an account even if you have debts with them in the bankruptcy, but if you go with them then you should not open it until after the bankruptcy as they can take any mony you have in the account on the day of the B.O to set of against your debt. There are a couple of other banks such as the natwest that have given bankrupts accounts but they are a bit hit and miss intheir approach, barclays and co-op are more consistant in their aproach. |
| carl |
Posted - 29 June 2010 : 15:52:47
Hello - sorry another question if thats ok?
Why is it that you are only allowed to have a bank account with either the CoOp or Barclays?
I owe money to Barclays so I won't be able to use these for future Banking but I am worried about uisng the CoOp because I have no CoOp banks near me and two of my local Post Offices have now closed!!
Could I open a Basic Bank Acount with the Yorkshire Bank instead? They operate an Account with appears to be identical in every way and they have a local branch just around the corner (no overdraft facility or debit card, allows salary to be paid in and also allows Standing orders and Direct Debits)
If I did this or used the CoOp instead would I have to tell them that I intended to apply for Bankruptcy shortly? (I am getting this account open - up and running before I hand my forms in?
Thank you |
| gettingoutofdebt |
Posted - 28 June 2010 : 18:15:13
If you don't have any arrears with the mobile phone company then they probably won't cancel the contract.
You should read the contract carefully though to see if you are obliged to tell them that you have been declared BR. |
