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Almost there
Junior Member
United Kingdom
288 Posts |
 Posted - 24 August 2008 : 22:31:02
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I have a million & 1 questions but I will just give the basics for now. I have racked up so much debt over the past 2 years but this year has been worse, mainly due to various items in the house that have had to be replaced. I live on my own and I receive a pension of around £500.00 a month, I also have a part time job and I am paid cash in hand for this, which amounts to around £400 a month.
I am almost certain that I will have to go bankrupt but I have used my credit cards very heavily recently and I am scared it will be looked on as reckless, but it has not been on luxury items or holidays, just essentials. One example is a new gas cooker, my old one was condemmed.
When I see the OR, I am worried that he will (1) Question why I got into so much debt with just a pension to live on, assuming I don't tell him about my cash in hand job, or do I tell the truth and cause more trouble for myself and my boss, because I am obviously not paying income tax and I get help with my council tax. (2) Will he frown upon the things I have bought so recently. Do I leave it a few months and not use credit cards (I have stopped using them as from today and have cut them all up).
I am scared I will be taken to court and have a criminal record, I have never been dishonest in my life before. Alot of the spending started when my partner died of cancer 2 years ago but I am not trying to make feeble excuses. Can anything be taken from me and will I end up in prison, I am so worried.
I have recently taken out a £10,000 loan, this has paid off my overdraft and a large chunk of one of my credit cards, I haven't made a single payment yet. Incidently I am not in arrears with anything at the moment, but its only a matter of time before I am.
My debts amount to around £26,500.
Thank you for reading this.
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Needafriend
Junior Member
United Kingdom
344 Posts |
Posted - 24 August 2008 : 23:04:52
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Hey there veryworried and a very warm welcome to you,
No i dont think you will be frowned upon because of your debt its all circumstancial.
I am sorry to hear about your loss which has not helped your situation.
The money you have spent has gone on essentials and not been done as an extravagance and so the OR will see that when you fill out the statement of affairs.
As for the cash in hand job I am not sure on that one maybe one of the other experts can offer their advice on what to do about that side of things.
They will take your pension into account but from what you have said you may not end up with an income payment arrangement and the debts should just get written off.
You could always try calling one of our other experts for some confidential verbal advice, sometimes that can help ease those worries too.
The OR arent monsters far from it they are human beings doing a job and wont treat you as a criminal, they just need the facts and then they get on with there job taking over what mess we have got ourselves in, the judge if you see them as its not always the case will be the one granting the Bankruptcy order and so its not as bad as you think.
What is your essential living costs that come out of your pension. Do you have any monies left from the pension to pay towards the debts and I dont mean with your cash in hand job either.
Try not to worry whilst I cant answer all your questions I will try and help where I can.
I hope that this has helped a bit.
Take care
JO
"There is light at the end of the tunnel, if you cant find it, get a brighter torch!"
You can read my blog here:
http://debtfreejo.blogs.bankruptcyhelp.org.uk/2008/08/24/my-debt-free-future/ |
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John
New Member
United Kingdom
73 Posts |
Posted - 24 August 2008 : 23:51:52
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Hi veryworried
there are a few points to be aware of here.
First and foremost I'm sure everyone on the forum will be sorry to read of your sad loss.
Here's how I see your position in respect of the other details in your post.
Debt, in itself, is not a criminal offence.
Misjudgement, burying our heads in the sand, living beyond our means (within reason), all these are accepted by the OR as common causes leading to the eventual bankruptcy of the individual.
What BR cannot do is wipe the slate clean for any and all actions taken by the bankrupt which are uncovered during the OR's investigations.
As sympathetic as we may all wish to be, and although we may all understand 100% that a pension of £500 monthly is not going to provide an extravagant existence, the fact remains that working cash in hand is evading potential tax payment which is an offence.
Claiming and / or receiving council tax relief without disclosing the full extent of the household income is an offence.
Please understand I am not here to judge you but it would be wrong of me to suggest that BR is everyone's saviour and that confessing all to the OR exonerates us from all that went before, it doesn't.
What you do or not regarding these 2 issues is a matter for you and your conscience. Nobody can, or should, advise you on these matters.
My opinion, not my advice, would be that if it were me having found myself in the same position, there are only 2 people in the world that know, me and my employer. I would not be in any hurry to let anyone else in on it.
Perhaps an equally worrying matter is the £10K loan recently taken out.
Clearly you have not done so for your own betterment but to consolidate other debts. However, the taking out of a loan of this size, making no payments and then declaring BR is very likely to be deemed an offence (fraud).
I would strongly recommend that you delay BR until you have made at least 3 payments to the loan.
www.Bankruptcyhelp.org.uk
0800 078 9367 |
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Needafriend
Junior Member
United Kingdom
344 Posts |
Posted - 25 August 2008 : 07:29:52
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Hi John and veryworried,
I must have given some wrong advice on some of the matters.
Sorry for any misconceptions I gave but John is more specialiased in this field than me and I looked at this through my own eyes.
Sorry again for any confusion I may have caused.
Jo :(
"There is light at the end of the tunnel, if you cant find it, get a brighter torch!"
You can read my blog here:
http://debtfreejo.blogs.bankruptcyhelp.org.uk/2008/08/24/my-debt-free-future/ |
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Almost there
Junior Member
United Kingdom
288 Posts |
Posted - 25 August 2008 : 12:11:03
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Hi Jo and John - thank you so much for your replies. I feel worse now and keep seeing myself behind bars, a bit irrational I know.
With regard to the £10,000 loan, I will make at least 3 payments and will try my best to make more if I can.
As far as the cash in hand job goes, I know that it is only myself and my boss that know about it but my worry is that the OR will question how I could take on so much debt with just £500.00 a month coming in, my only option is to go on the payroll but this will cause me to get into further debt, I feel as if I am in a catch 22 situation. What would the worse scenario be for me? I am really not a bad person, I have just got into a bit of a mess, surely I can't be the only one that has bent the rules a bit!
Thank you for listening |
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John
New Member
United Kingdom
73 Posts |
Posted - 25 August 2008 : 12:34:01
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Hi
Each case is personal to ourselves and your debt level can be overwhelming.
In reality your debt of £26.5K is quite low in the scheme of things and it wasn't all taken out recently.
When did you first take on credit?
Were you on £500 per month pension then too?
www.Bankruptcyhelp.org.uk
0800 078 9367 |
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Trolly-Dolly
Average Member
591 Posts |
Posted - 25 August 2008 : 12:41:00
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Help John!
I havent made a single payment to Egg (owe £1250), will that be deemed as fraud? It was only when it was maxed that we realised we had a problem and on advice of just about everyone we stopped all payments. Going BR in less than 48 hrs.
You can read my blog here;
http://drowningmummy.blogs.iva.co.uk/ |
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John
New Member
United Kingdom
73 Posts |
Posted - 25 August 2008 : 13:12:35
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Hi DM
technically this could be construed as fraud as no attempt to repay has been made. There are many cases where legally speaking fraud has been committed but often without the BR realising.
Generally the OR would look at the sum borrowed that has seen no repayments to the creditor.
In your case the £1250 is quite a small percentage of your overall debt. The OR would use their own judgement in each case so I would not expect this point to impact on you except by way of a BRU being considered, but not a foregone conclusion.
In veryworried's case £10K of £26.5K is a large proportion and quite a large sum in itself.
For this reason I advised that a minimum 3 payments be made.
Yours is a different scenario although could add weight to the OR's thoughts of BRU if it comes to that.
www.Bankruptcyhelp.org.uk
0800 078 9367 |
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Needafriend
Junior Member
United Kingdom
344 Posts |
Posted - 25 August 2008 : 13:21:55
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So John,
From what I understand anyone thinking of the BR route should at least make 3 payments to any recent credit before going to court, can they make maybe a token payment or would that be frowned upon too as like you have said it was added to there debt balance and would have increased it and could be looked at as being "fraudualant" making the OR look deeper and believe they def took it and did not consider how they would pay it back.
This subject is now starting to worry more people looking on this site and its best that they try to understand the legal implications that may come from taking credit just before and not actually making any payments back thus showing willing and then finding it harder to pay and then having no choice's left other than to declare BR.
I hope that i have made sense. I dont arf waffle a lot. :)
Jo
"There is light at the end of the tunnel, if you cant find it, get a brighter torch!"
You can read my blog here:
http://debtfreejo.blogs.bankruptcyhelp.org.uk/2008/08/24/my-debt-free-future/ |
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John
New Member
United Kingdom
73 Posts |
Posted - 25 August 2008 : 13:36:25
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Hi Jo
in a nutshell a minimum 3 payments should be made in order to lend some feasability to your explanation to the OR that when you took out the loan you were still under the misapprehension that it was affordable.
The strength of that arguement diminishes somewhat if no payments are made.
If you were the examiner would you not suspect that this was a deliberate act?
The saving grace in veryworried's case is that the £10K can be evidenced as consolidating existing debt and not having been spent on anything frivolous.The OR will take this into account.
I don't like banks much but if I were the lender i'd be more than a little miffed that, effectively, I had seemingly been duped.
www.Bankruptcyhelp.org.uk
0800 078 9367 |
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Needafriend
Junior Member
United Kingdom
344 Posts |
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Trolly-Dolly
Average Member
591 Posts |
Posted - 25 August 2008 : 14:07:35
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The problem is, is that when you live in a world of debt and rob Peter to pay Paul, NOTHING is pre-meditated. You just cant see next week let alone next month. By the time the card was maxed (on living expenses, nothing else) it was too late and we then realised that we were in deep doo-doo. A few weeks later we found the IVA site and stopped paying creditors in preparation for our IVA, had we known that BR was to be our route back then, we would have tried to pay soemthing whilst we saved the fees.
I will tell the OR all of this, is a BRU decided on your paperwork or after your interview?
P.S. also posed same qusetion on DI thread. sorry.
You can read my blog here;
http://drowningmummy.blogs.iva.co.uk/ |
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Almost there
Junior Member
United Kingdom
288 Posts |
Posted - 25 August 2008 : 15:28:03
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I started getting into debt in about 2002, it started with a £1000 loan and since then I have had various credit cards, used them, paid them off used them again and paid minimum repayments, consolidated loans etc. it has just snowballed. I have been getting the £500 pension for over 2 years now, I was working full time until 2006, didn't work at all last year, got the cash in hand job this year and everything has got out of control and I have had to replace so many things in the house, even some of the kitchen cupboards have had to be replaced but I have done this as cheaply as possible. I also admit to living beyond my means but that has now stopped. As mentioned the majority of the £10,000 has been used to consolidate, do you think I will be OK if I leave the BR for say, another 3/4 months, assuming I can keep my head above water for that length of time.
Incidently I have seen posts from people getting into debt through gambling, surely that is worse! |
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Almost there
Junior Member
United Kingdom
288 Posts |
Posted - 25 August 2008 : 15:32:05
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| Sorry to keep harping on but what would the worse scenario be in my case? |
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Trolly-Dolly
Average Member
591 Posts |
Posted - 25 August 2008 : 15:45:08
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This is an opinion and an opinion only okay?
Just from my research, I would say a BRU of 2 1/2 to 5 years would be your worst case scenario. That is of course if you keep the cash in hand job quiet, thats another thing altogether.
You can read my blog here;
http://drowningmummy.blogs.iva.co.uk/ |
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Almost there
Junior Member
United Kingdom
288 Posts |
Posted - 25 August 2008 : 16:00:03
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I think it best to keep it quiet but I am worried that the OR will question my borrowing money with just the pension to live on.
So you don't think prison would be a possibility? |
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will I end up in prison, I am so worried.
