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liz
Starting Member
United Kingdom
12 Posts |
 Posted - 10 March 2010 : 11:50:20
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Hi,
Looks like I'm facing bankruptcy. If this is the case, I want to be moving before the fees go up. I'm posting my SOA below, Be really grateful if anyone has any comments.
A week or so ago I got the letter demanding £44k for the mortgage shortfall after seperation/divorce. I wanted to sell when we divorced but my ex wouldn't, so the mortgage arrears built up and the house was repossessed.
I am now working part-time (20 hours per week), and live in rented accommodation with my son, he's 9yrs old. I also receive tax credits, housing benefit and child benefit.
There were no financial terms in the divorce and my ex does not pay any maintainence.
Is bankruptcy my best option as I don't believe I will be able to afford IVA payments, hopefully any IPA would be less?
I would really appreciate any help and advice. 
Statement of Affairs & Personal Balance Sheet
Monthly Budget Summary Amount(£)
Total monthly income 1,718
Monthly expenses (incl. HP & secured loans) 1,628
Available for debt repayments 90
Number of adults in household 1
Number of children in household 1
Number of cars owned 1
Monthly income after tax 650
Benefits 1068
Total monthly income 1718
Expenses Amount(£)
Rent 595
Council tax 59
Electricity 32
Gas 58
Water Rates 23
Telephone (land line) 16
Mobile phone 16
TV Licence 12
Internet services 8
Groceries etc. 300
Clothing 54
Petrol/diesel 50
Road tax 16
Car Insurance 34
Car maintenance (including MOT) 25
Childcare/nursery 180
Other child related expenses 26
Medical (prescriptions, dentists, opticians etc.) 15
Pet Insurance/Vet bills 6
Contents Insurance 8
Haircuts 15
Emergency Fund 10
Uk Holiday 30
Meals at work 40
Total monthly expenses 1628
Unsecured Debt Description Debt(£)
Mortgage 44000
Bank 250
Catalogue 180
Unsecured Debt totals 44430
Asset Description Value (£)
Car(s) 1750
Total Assets 1750
There is usually a lightswitch at the end of the tunnel. |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 10 March 2010 : 14:33:07
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Emergency Fund 10 - This isn't allowed and will need to come out of any excess you have.
Other child related expenses 26 - You may need to clarify what these are to the OR but you can do this during the interview.
Internet services 8 - You can mention that your son needs this for his school work otherwise it won't be allowed.
Everything else looks ok. The holiday isn't always allowed but it is worth a try.
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liz
Starting Member
United Kingdom
12 Posts |
Posted - 10 March 2010 : 15:06:22
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Thanks G.O.O.D. Would the Emergency Fund be accepted as household repairs? The Other Child Related Expenses are for a weekly sport activity (classed as extra curricular?). So otherwise nothing obvious missing?
One other big question I have is this:- It seems in all likelihood that I will lose my car. If so then surely the car related expenses I've claimed for would be negated. This would increase my surplus income and lead to a bigger IPA. Am I right in thinking this is the case?
Also, if I sold my car to pay the BR fees would this be a problem with the OR?
There is usually a lightswitch at the end of the tunnel. |
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Jane.l
Average Member
511 Posts |
Posted - 10 March 2010 : 15:13:25
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| I don't think you would lose the car if its worth less than £2000 and you need it for work |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 10 March 2010 : 15:18:45
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If the car is worth more than £2k you will lose it but the OR will give you up to £2k to buy another one provided you need it for work. If you don't need a car for work then you will lose it no matter how much it is worth and, in this case, you would not be able to claim for any car related expenses so any IPA would be a higher amount.
If you sold the car the OR would expect the proceeds to go to your creditors. If there is no other way of paying the BR fee then using the money from the car would be ok but make sure you keep the sale receipt so you could prove to the OR how much the car was sold for.
Most people stop paying their creditors a couple of months before declaring BR and use this money for the BR fee. |
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liz
Starting Member
United Kingdom
12 Posts |
Posted - 10 March 2010 : 15:54:35
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Oh Gosh! This is where it gets sticky and the options become less clear. The car is worth £1770 tops. I drive to work, thecar has occasionally been used for work matters. There are local buses I could take to work. Picking my son up from afterschool club will be more awkward.
It is the IPA vs IVA that I have trouble fathoming, particularly as the debt is joint and severably liable with my ex. If I tried for an IVA would it have to be for the full amount and he walks scot free? Whereas I might be able to afford an IVA for 50%. If I go BR and lose the car then the resultant IPA could be more per month than an IVA? OOPs! My brains just started bubbling again!
There is usually a lightswitch at the end of the tunnel. |
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chester2005
Average Member
United Kingdom
786 Posts |
Posted - 10 March 2010 : 16:02:56
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if you need the car to get to work etc. and it is less than £2000 as yours is then there should be no problem there or with the car expenditure.
if your DI is less than £100 per month then you will not get an IPA and if one is not set up within 12 months then you avoid one altogether
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!! |
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Jane.l
Average Member
511 Posts |
Posted - 10 March 2010 : 16:05:49
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I would say that you DEFINITELY need a car for work,  hint hint
Any debts that are joint, whether you do an IVA or go bankrupt, the liability for the whole debt will fall to the other person.
An IVA is not based on the amount you owe, but more on what your disposable income is after essential expenditure, so 2 people with the same level of debt but with different outgoings and wages, will pay back different amounts. 100% of your disposable income goes into an IVA
Bankruptcy allowances are more generous than those in an IVA and I think the maximum surplus income you would pay would be 70% and that is over 3 years not 5 or 6 as in an IVA
to be honest, with no assets, in your position, I would go bankrupt.
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liz
Starting Member
United Kingdom
12 Posts |
Posted - 10 March 2010 : 16:29:57
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Thank you everyone for the swift advice, facts and hints! I'm off to buy some bubblegum and then pore over my SOA again this evening, see what I can justify and how it looks without the car, just in case!
There is usually a lightswitch at the end of the tunnel. |
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Topic |
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SOA for single mum, Help appreciated.
