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sj10
Junior Member
New Zealand
175 Posts |
 Posted - 12 March 2008 : 09:03:23
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Hello to everyone,
I am REALLY hoping someone can help me and shed light on this situation.
I have debts to the total of £36,000 or thereabouts, which originate from a failed business which wound up about a year ago.
These are roughly as follows:
£17k loan with the bank
£15k loan with a finance company (Joint loan with wife)
£4k credit card bills (perhaps a little more)
We have recently moved to another country and due to the exchange rate it is almost impossible for us to pay anything back after we pay our basic bills.
We rent and dont own our house and have a car which is worth very very little. (Only just gets us from A to B for work.)
Because of all of this I am considering filing for Bankruptcy in the UK. I know it will effect my credit rating but the worry and strain is starting to effect my health and I cannot see any other option as we cant afford to pay the repayments and dont have equity etc.
My question really is, I dont mind going Bankrupt and facing the consequences myself but I am extremely worried about dragging my wife into this as well. If I declare bankruptcy what will happen with the joint loan we have for £15k? Will it transfer to just her name? Will it half and she pays her half? Or will I be able to include it in our bankruptcy?
Please, any help or advice you can give will be hugely appreciated.
Thank you.
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sj10
Junior Member
New Zealand
175 Posts |
Posted - 12 March 2008 : 09:05:15
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| Sorry I meant to say "Will I be able to include it in MY bankruptcy" |
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 12 March 2008 : 09:24:59
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Hello sj10 and welcome to the forum
JOINT LOAN
Unfortunately the joint loan is just that, so if you defaulted on the payments then the creditor would pursue the other party on the loan agreement for the full amount .
Is there any likleihood that in the future your wife / your financial position might be better? If so it would be possible for you to enter br leaving your wife with a 15k debt, then potentially she could enter a debt management plan to eliminate that over time.
Obviously with debts of 15k or more she could also enter an IVA or petition for her own Br as well.
An IVA would need to be in the region of 250 per month so if you are nowhere near that level of disposable income then you can eliminate it from the options.
Are you now permenant residents in NZ - just wanted to check on the emigration status re insolvency.
Also you might be surprised that potentially the credit position in NZ might be substantially different and not linked to the system in the UK ( although if you were in Br you should clearly not borrow 500 or more during the period of Br without advising them that you are currently bankrupt)
Hope this is of help
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
www.revivauk.com |
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 12 March 2008 : 09:36:12
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I agree with Paul,
The important thing to do is check the emigration status first.
Do you have any plans to move back to the UK?
As paul mentioned potentially the credit position in New zeland could be different and not linked to the UK therefore your declaring Bankruptcy may not affect your position in NZ, which would give you the option to both declare Bankruptcy and give you a fresh start
Kind Regards,
Brett
View my Blogs at:
http://HelpfulAdvice.blogs.bankruptcyhelp.org.uk/
Bankruptcy Specialist
England,Jackman & Spacey
E-mail be@ejands.co.uk
WebSite www.ejands.co.uk
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sj10
Junior Member
New Zealand
175 Posts |
Posted - 12 March 2008 : 09:37:08
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Thank you for your help, I have answered your questions in red below the best I can.
One other question.
How exactly does BR work? Would we have to pay an amt each mth after bankruptcy (on top of the remaining loan) and if so how long do the payments last for and how would they work them out? (Trying to work out if we could afford the payment son the £15k loan which would be left)
quote:
Originally posted by Reviva UK
Hello sj10 and welcome to the forum
JOINT LOAN
Unfortunately the joint loan is just that, so if you defaulted on the payments then the creditor would pursue the other party on the loan agreement for the full amount .
Is there any likleihood that in the future your wife / your financial position might be better? If so it would be possible for you to enter br leaving your wife with a 15k debt, then potentially she could enter a debt management plan to eliminate that over time.
I think if we were to go BR and then this would leave us with the 15k then we may be able to make the repayments on that loan per month. They are currently just over £200 per month. This means if we scraped together we should be able to cover that.
Obviously with debts of 15k or more she could also enter an IVA or petition for her own Br as well.
I thought you needed 3 or more creditors for an IVA? (May be wrong) if so then would she still be able to enter into an IVA as the £15k loan is with one creditor?
An IVA would need to be in the region of 250 per month so if you are nowhere near that level of disposable income then you can eliminate it from the options.
What would our options be if we tried to pay the remaining £15k loan but due to changes in future in our circumstances, perhaps a child or illness or something else, what would then happen if we could not afford £250 per month? (or to pay the £200 for the loan each mth?) Would this then mean that my wife would also then have to go BR? (Or is there another option?)
Are you now permenant residents in NZ - just wanted to check on the emigration status re insolvency.
I have my spouse visa as we are married and she is from NZ so has NZ nationality. The spouse visa took about 3mths to get intially and I have had it for around a year. I take it this couldnt be taken away now I have it if I went BR in the UK??
Also you might be surprised that potentially the credit position in NZ might be substantially different and not linked to the system in the UK ( although if you were in Br you should clearly not borrow 500 or more during the period of Br without advising them that you are currently bankrupt)
Do you mean that perhaps me going BR in the UK may not effect us getting a house over here eventually? (We wouldnt want credit again apart from a mortgage anyway.)
Hope this is of help
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
www.revivauk.com
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sj10
Junior Member
New Zealand
175 Posts |
Posted - 12 March 2008 : 09:42:18
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re coming back to the UK.
We have no plans of returning, as we would like to effectively make a life for ourselves here. We would maybe visit one day to see family if we could ever afford it but not in the near future. |
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 12 March 2008 : 09:52:02
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Hi Sj10
In Bankrupcty you would have to declare your income and expenditure so I wonder if you could let us know what your joint income is?
If after you expenditure there is a disposable income the Insolvency Service would look to take a proportion of this towards your debts, this is known as an income payments order and would last for three years, however if you wife decided to continue to pay the loan this would be an allowable expenditure within your bankruptcy, therefore I think the choice is for you to both go Bankrupt and perhaps pay the IPO for three years or for you to go Bankrupt and your wife to continue paying the loan.
I doubt vey much your declaring Bankruptcy would effect your visa status, but an an anonymous phone call to emigration should answer that question.
I hope this Helps,
Brett
View my Blogs at:
http://HelpfulAdvice.blogs.bankruptcyhelp.org.uk/
Bankruptcy Specialist
England,Jackman & Spacey
E-mail be@ejands.co.uk
WebSite www.ejands.co.uk
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sj10
Junior Member
New Zealand
175 Posts |
Posted - 12 March 2008 : 11:40:35
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Thank you. I will try to find the number and call them.
With BR do they take both incomes into act (household income of me and my wife) or do they take my income into account and whats left over to pay my debts?
We basically are just trying to work out a way to live and pay for essentials so we can have some sort of life and perhaps one day have a child. (Whilst not really wanting to enter into BR as it would cause us alot of guilt and feelings of shame etc but there doesnt seem to be many options.)
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JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 12 March 2008 : 12:17:33
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They would take into account your income firstly and then any contributions made by other members of the household towards the joint household expenditure, this would mean if your wife had other credit debts she was having to meet or high fuel costs for work or perhaps a vehicle on finance she would be able to make allowance for these and then put the balance down as a contribution towards the household expenditure.
Bankruptcy is a fresh start for individuals who can not afford to repay their debts, if you can afford to repay your debts you should, but you should not leave yourself in a position whereby you are struggling to survive and you should not feel guilty declaring Bankruptcy if you find yourself in this position.
I hope this helps
Brett
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
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JulianDonnelly
Junior Member
United Kingdom
325 Posts |
Posted - 12 March 2008 : 12:21:52
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My apologies I meant to say Brett was correct in his advice, however that your first point of conatct should be emigration services, to check on whether this would affect your visa.
All The Best
Julian Donnelly
Spokesperson for www.Bankruptcyhelp.org.uk |
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 12 March 2008 : 12:31:56
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Yes Julian is quite right if you find your debts are overwhelming then this is what Bankruptcy is for, it is clear you have investigated other avenues and are doing your best to calculate whether it is affordable to repay your wifes debts, if is not then you should not consume yourself with guilt.
Good to see you on here julian and the updates to the site are looking good.
Regards,
Brett
View my Blogs at:
http://HelpfulAdvice.blogs.bankruptcyhelp.org.uk/
Bankruptcy Specialist
England,Jackman & Spacey
E-mail be@ejands.co.uk
WebSite www.ejands.co.uk
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 12 March 2008 : 19:57:25
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As Brett suggests the most important thing is to investigate all the options to debt and see how each applies to your situation.
From what we have seen Br is an obvious option for yourself. The next consideration is to see if Your wife ( now responsible for the total 15k) should go Br, enter into a debt management plan or try to maintain the standard payments.
I suspect that the standard paymentswould have a very serious impact upon your monthly existance so you the decision if ultimately yours.
In a Debt Management Plan I would look at your monthly income & expenditure and make an offer relative to the disposable income. The plan would be to freeze the interest on the loan and repay over time. For example a 15,000 would take over 7 years to pay off. However your wife would retain a better credit history in the UK than yourself.
This should then be compared with Br where if you were both to petition at the same time then I suspect that neither of you would be required to pay any disposable income contribution for 3 years.
You would need to petition at the High Court in London and the court fees would be 485 each. You would also need to be there yourself or have someone represent you. In this regard you have 2 options
1. Hire a solicitor - suspect quite high fees
2. hire a bankruptcy specialist to represent you in the high court and at the oficial receivers interview directly afterwards. Both Brett and myself have considerable experience in this area and have both been to the high court more times than we care to remember.
Hope this helps
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
www.revivauk.com |
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sj10
Junior Member
New Zealand
175 Posts |
Posted - 14 March 2008 : 12:23:22
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Thank you all for your advice. It is hard to not get bogged down with guilt for the situation we are in. We never really felt like we were irrisponsible with money. It is unfortunate circumstances which have got us here.
The worry we have now is if we were to go BR then we most definately could not afford to pay for flights back to the UK (otherwise we would not be in this position.) and are also worried if we would even be able to pay the joint costs involved in actually going BR. What happens in this situation? It seems to mean unless we can find a minimum of £970 plus costs for someone to represent us then we actually have literally no options?
Also you mentioned that "I suspect that neither of you would be required to pay any disposable income contribution for 3 years." if we both go BR? Does this mean we will not be liable to pay an ipo or whatever it is called? (We are trying to find a way through this so we can just be happy with a roof over our heads, we are happy if we have spare income to pay an ipo but it seems increasingly like we would have next to none.)
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Reviva UK
Advanced Member
United Kingdom
2452 Posts |
Posted - 14 March 2008 : 15:03:48
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I would suggest that you let the experts here review your I&E before the forms go in to make sure that you have actually thought of everything.
I realise that you actually want to pay back some or all of the debt but in the current situation it seems highly unlikely so the important thing to remember is that you have tried, investigated the options and chosed Br not to hide from repayments but simply because you are unable to make any.
There is nothing wrong there.
Re the fees the options are fly back and go through the process yourselves or take the less stressful option ( and probably cheaper option ) of outsourcing it.
The plan - having decided that this is probably the way forward - is to work on a budget and calculate how long it would take to save the appropriate funds.
Paul Johns
Assisted Bankruptcy Specialists
Reviva UK
www.revivauk.com |
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 15 March 2008 : 13:08:38
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I agree with Paul, to be sure that you have thought of all expenditure post your Income and expenditure and we can look through it.
Most people who find themselves in the position of having to declare themselves Bankrupt feel guilty so try to present an I&E that is a very conservative estimation of expenditure, and leave themselves short of living costs.
View my Blogs at:
http://HelpfulAdvice.blogs.bankruptcyhelp.org.uk/
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
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confused - will my wife be ok???
