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nathan 2
Junior Member
United Kingdom
192 Posts |
 Posted - 01 January 2009 : 12:53:34
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Hi there guys.
I have spent the last few months (some may remember my earlier questions) trying to fight my way out of potential bankruptcy. My, seemingly, last glimmer of potentially turning my part time business around has been dashed when I had failed to secure a lucrative framework contract with the local council. I have now promised my wife that, for sanity's sake, I will declare bankruptcy when I am made redundant from my PAYE "day job" in February.
As a "thank you" for putting my heart and soul into the project that I have just completed, my employer (soon to be - ex employer) has awarded me and others in my team a completon bonus.
This has amounted to putting around £12,000 in the bank.
In February I will be jobless, although I do not envisage this being for a long period.
I intend to go bankrupt in January.
What can be done to protect the money, as it may have to last me a while until I do find alternative work.
Also, for the last few months, my wages have been paid into my wife's account (she is not going bankrupt)as this is the account where our domestic outgoings are sourced. Is her account likely to be looked into? All of my debts stem (one way or another) from my taking loans out for business purposes and allowing us to live a decent (but not decatant) life whilst our business ventures came to fruition. Unfortunately, with the economic downturn, it never has come to fruition!
About 6 months ago, before bankruptcy had been a must, I had repaid my mother in law back for the money that she had leant us for our wedding. I know that, if bankruptcy had been on my mind I shouldn't have given back preferential payments, but, the shame and self disappointment is enough just knowing that my "in laws" know of my financial mess, never mind owing them money for my wedding on top. Is this money (£4k) likely to be reclaimed by the OR as so many months have passed? During this time, I have been getting further in to debt with my bank to maintain payments to other creditors (mortgages on buy to lets, domestic bills and loan payments).
Sorry for the extensive dialogue. I could probably go on and on, but I wont!
Many thanks in advance.
Nathan |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 01 January 2009 : 13:43:19
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Hi
Sorry to hear about the situation but hopefully the end of contract bonus will keep you going until you find other employment.
Couple of things to consider.
The repayment of the wedding fund will definately be classed a a preferential payment and the OR will definatley try to reclaim this.
Secondly if you declare Br in January and receive the money in Feb ( in whichever account ) you must declare this and it will definately be lost.
I would strongly suggest that the Br is postoned, and that the family use the rediundancy fund to cover basic living expenses until such time as a new job is obtained and then review the position then.
Incidentally how much is the total debt? it might be possible is some circumstances in offering this pro rata to the creditors as a final settlement.
Have you taken any advice from either the helpline or a bankruptcy specialist
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
Real People ..... Real Debt Solutions
www.revivauk.com |
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nathan 2
Junior Member
United Kingdom
192 Posts |
Posted - 01 January 2009 : 14:56:56
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Hi Paul,
Thank you so much for the prompt response.
Firstly, I'm not sure how they will reclaim this money from my mother in law, as it was a private loan from her savings. I have paid her the exact same amount back, via cheque, into the same account that she had withdrawn it from originally.
The bonus from work has already been paid in my Decemeber wage slip into my wife's account. We now have a positive figure in her account (approximately £13,500).
A summary of our arrangement is as follows:-
My wife does not work, as she is a full time mother to our son.
Our domestic outgoings (usual bills, utilities, rent, food, fuel, etc...) totals around £2,600 per month. This would include a little "just in case" money, but would not cover any savings. All of our domestic outgoings are debited from my wife's account, which my wage is now paid into.
My PAYE (day job) nets me (currently) around £3,400 pcm. Obviously, if it were not for my investing in the housing market and taking so many gambles, our domestic situation would be more than comfortable. When I am forced to seek alterntive employment in Feb, I envisage my net income to reduce to around £2,400 pcm, at best, as employers have really tightened up spending on profesional prelims.
My travel expenses for my work (PAYE & Own Business)comes out of my account. (RBS). All of the mortgages and loans and any other associated outgoings and incomings to do with my buy to let properties (3 in total), my development (1 property to be converted), rents received and expense payments received from my employer goes into my RBS account.
Currently, as my development has been hit hard and the bills have stacked higher and higher since the latest in a long history of potential buyers fell through in the summer of 2008, my RBS account is approximately overdrawn by about £8,500. I have been using the credit cards where-ever necessary and I have around £23,500 between 4 different cards (amassed over the last 2 and a half years or so). I have an overdraft loan of approximately £11,600 and an unsecured loan of around £13,000.
All in all I would estimate my total owing (incluing the properties and the development) to be IRO £380,000.
Compartmentalising the properties (which are owned personally, not through a business) and the development (which is owned through my business, but I have personally guaranteed), I would estimate that the level of unsecured debt is IRO £90,000. (included within the £380k, not in addition to it).
I have racked my brains out considering various options that may be available to me to fight my way out of all of this. "What if this" and "If I could just" that... The bottom line is that, after a hard couple of years of stress and some very trying personal grievances during the same period, I am just about ready to capitulate.
My profession (the construction industry) is taking a beating at the moment, but, things will improve in the future. If I could just get myself back into a "normal" situation, professionally and personally, whereas I go out to work, earn a wage, which pays for my family and thats all, then we'd be fine.
It's been my naivety of jumping on the "the bubble will never burst" bandwagon that has been my undoing into all of the debt and sleepless nights that I have suffered along with many of my, once, "high flying", "big thinking" chums. I just want to have a normal job that pays for a normal lifestyle and put all of this behind me.
I think that the bank that has funded the development purchase will write this off in favour of acquiring the property for their own portfolio. Knowing that I have no tangible money, nor assets worth money, I don't think that they'll persue me.
The buy to lets will, obviously, be consumed by the OR at the initial stage of BR. They all (theoretically) have money in them (approx £25,000 in total), but the reality is that it's a buyer's market and so, the money would not be acheived. At best, they'll break even.
The only other thing to take from me would be the funds in my wife's account (approx £13,500) but this is required to cover our outoings during this precarious time. Also, with it being in my wife's name, shouldn't it be exempt?
If I hold off of bankruptcy until the money has been consumed, then that will only take a few extra weeks anyway, as my combined ougoings are over £6,000 pcm with all things considered.
I'm just very confused, don't feel that I can trust anyone to give me the right advice and would love to just run from all of this now that I know that fighting my way out is not an option.
I am frightened by committing to BRTCY, as it signifies the point of no return, but don't see any other option but to take that route.
Thanks again for your advice and opinions.
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 01 January 2009 : 15:57:18
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Hi
The 6k per month outgoings will I assume include all the debt repayments in addition to the living expenses.
It is very easy to get the 2 confused .
We are working with numerous buy to let landlords and builders / developers at present and in some cases they are clearly better off drawing a line under things while other situations warrant a different approach and there are certainly occasions where you can develop a strategy which will put the unsecured creditors into a holding pattern while plan B is developed.
Plan B may include renting out property to cover mortgages, and holding tight until there is an upturn in the market.
A few people we are working with are in a holding pattern and hope to be clear within 3 years without going Br.
The last thing you need to do is to ruch into things. As I have said on the forum before you are guaranteed to have a disaster.
I would also guarantee that the OR will pursue the money from Mother in law as clearly on the face of it it is preferential treatment for her over and above other creditors / banks. They will simply ask for the money back and will clearly see that the money has been paid to you and has left your account and been given to her.
Secondly even though the current pay in in your wife's account it is not the best plan to mislead the OR on the documents. Even though the money is not in your account it is still yours and will clearly be seen on your pay slips / p60 etc etc.
I again would recommend you not petitioning for Br in Jan, take some professional advice as you have an awful lot to lose, and use some of this 12k to live off until you find alternative work.
Do you have any other assets such as cars or high worth valuables, other items purchases on credit cards over the last 12 months?
Have you sorted a new bank account out yet
do you have any pensions, endowments, insurance policies,
have you got your accounts up to date for the biz?
what is the level of trade credit for the development
quite a lot going on.
Please slow down a little and get a solid sensible plan. You will feel much better when you have
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
Real People ..... Real Debt Solutions
www.revivauk.com |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 01 January 2009 : 16:18:18
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Sorry one other quick question
do you have a Ltd company or are you a sole trader
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
Real People ..... Real Debt Solutions
www.revivauk.com |
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nathan 2
Junior Member
United Kingdom
192 Posts |
Posted - 01 January 2009 : 17:44:15
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| I have a limited company. |
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RHB
Senior Member
1159 Posts |
Posted - 01 January 2009 : 18:19:08
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cOULD YOU LIVE IN ONE OF YOUR BUY TO LET PROPERTIES for less than you are paying for rent now possibly? I believ your mortgage rate is less as well, if it is classed as a home rahter than an investment.
I think Paul is right, if there is a way round it & you can weather the storm you could maybe then seel all your properties, have a decent amount for a deposit to buy the house you want & could then live off a normal wage as your wife wants. |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 01 January 2009 : 18:24:55
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Hi Nathan
just as a note even if Br is the right solution it can be handled in such a way as to minimise the stress and aggravayion for the family.
Additionally I have found that in the event that Br is the right solution the OR is usually "much happier" ( if that is the right phrase) that every opportunity to avoid Br has been taken and one can demonstrate the lengths that have been followed.
In terms of fees I do not believe that any reputable business would or should charge to discus the situation. It might be that Br is right for you and you are comfortable in going through the process alone.
From the little I have read an IVA is not possible and it seems a little strange to have to pay £1000 knowing that it is doomed to fail.
Moving forward:-
I would suggest you either call the helpdesk on the number above or choose an assisted bankruptcy company to have a detailed discussion with.
At the very least the issues with Br are:-
your car as the OR won't allow you yours PLUS a company car
the preferential payment to mother in law
the £12k currently in the bank
Whichever way you eventually decide to go you need to get a detailed plan, a timescale, and work out what to do with the issues above.
hope this helps a little
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
Real People ..... Real Debt Solutions
www.revivauk.com |
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nathan 2
Junior Member
United Kingdom
192 Posts |
Posted - 01 January 2009 : 18:48:31
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Hi RHB,
Living in one of my buy to lets is not really an option, as they are not big enough nor in a suitable area (109 miles from where I currently reside and work). The mortgage that I pay on each buy to let is marginally lower than the rent that I pay to be where I am currently, however, not substantially lower.
2 of my 3 mortgages on the properties are currently on a "home-owner" basis, rather than a "buy to let" deposit, as I had remortgaged them to accrue the deposit for the development.
I would like nothing more than to keep my investments ongoing, so as to reap the benefits in a richer climate in years to come. I don't see this as a possibility in light of all of the facts surrounding my circumstances.
Regards
Nathan |
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nathan 2
Junior Member
United Kingdom
192 Posts |
Posted - 01 January 2009 : 18:59:04
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Hi Paul,
Yes it does help ever so much, Thank you.
I do think that, unless something came to fruition with my income situation (i.e:- I landed another good, long term & well paid PAYE contract and sorted some additional form of rental income out), the only way forward is to throw in the towel and make a fresh start.
I would feel much more comfortable having a reputable company help me go through this process of elimination and, if / when necessary, help me to file for the necessary arrangements.
Many thanks for your advice and time.
I appreciate it, especially on New Year's day!
Kind regards,
Nathan |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 01 January 2009 : 20:12:24
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no problem at all
nothing on TV
too much turkey
and even if there was something on TV I couldn't hear it over my wife & 4 daughters.
Happy to help
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
Real People ..... Real Debt Solutions
www.revivauk.com |
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