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SKA
Junior Member
180 Posts |
 Posted - 28 March 2008 : 11:34:46
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I've been advised that bankruptcy may be the best option for me and I have started to seek more information. My main reason for considering an IVA was so that I could keep my car on HP (required for work). If i do proceed with bankruptcy am I right to assume I would lose the car or would I just have to maintain payments?
Thanks, |
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 28 March 2008 : 12:23:20
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Hi SKA,
Welcome to the forum,
It would depend on certain factors.
What is the value of the car?
What is the outstanding Finance?
What are the monthly payments?
If the car is worth more than the finance then it is likely you would loose it in Bankruptcy.
If it is worth less than the finance then it would depend on you need for the car.
If you require a reliable car for your work and travel a great deal of mileage then there would be an argument for you to maintain the payments of the car, but this would depend on the payments and whether they are considered excessive within your income and expenditure.
I hope this helps
Kind Regards,
Brett England
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
View my story at:
http://www.bankruptcyhelp.org.uk/forum/topic.asp?TOPIC_ID=594
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SKA
Junior Member
180 Posts |
Posted - 28 March 2008 : 12:54:59
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Hi Brett,
Thanks for your reply.
The car itself is worth no more than £10k now, the loan outstanding is about that much and the payments are £300 pcm. If i sell the car i would not be able to pay the loan and the only choice i have is to give it back. However this leaves me with no car which is essential to my job and i cannot afford to buy one.
Also would you be able to advise on whether owning a property and then transferring it to someone else's name (due to costs) would have a negative impact? I co-owned a property that is rented and was not able to pay my half of the ground rent and maintenance costs, and also costs when the property was not rented out. My dad helped me with this so i put the property in his name. If i sold the property it would not even have provided equity to pay the legal fees involved let alone the penalty to the mortgage lender. I thought it was in my best interests to sell the property as keeping it was pushing me into debt, would this be seen as acceptable?
Thanks |
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 28 March 2008 : 13:37:40
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Hi SKA,
If you hand the car back there is likely to be a shortfall to the finance company which would form part of your unsecured debt in your Bankruptcy.
The monthly payments are fairly high, however you are entitled to keep a car of a value of no more than £2500 so if you were to have automatic discharge after 12mnths then the total you would have paid towards your car would be £3600 which could cause an issue.
As far as the property is concerned I would need further information to advise on this position.
What is the value of the property?
What is the outstanding Mortgage?
What are the ground rent and maintenance costs?
When was the transfer made?
The key to Bankruptcy is being honest and declaring everything to the OR, if you do not inform them of something they would assume there are further dealings you have kept from them, so it is best to declare the transfer to them and explain your reasons for doing this.
With further information I can give you an idea of how they would look at this transaction and whether they feel this was done at an undervalue.
Hope this helps,
Kind Regards,
Brett England
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
View my story at:
http://www.bankruptcyhelp.org.uk/forum/topic.asp?TOPIC_ID=594
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SKA
Junior Member
180 Posts |
Posted - 28 March 2008 : 13:40:39
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Thanks Brett, really appreciate your help!
Prop value is £235k, mortgage balance is £249 (int only). Ground rent is £250PA and maintenance costs are £800PA. Transfer of deeds has just been authorised as the tenants gave notice to leave and I couldn't afford to pay my half of the mortgage whilst we find other tenants.
Thanks once again for your help. |
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 28 March 2008 : 14:00:14
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It appears the property is in negative equity, so I would not see this as a major issue, however I would keep a copy of the mortgage statement and any valuation that has been done to present to the OR at the interview.
Keeping a good paper trail and being able to present this in advance of being asked will show good conduct on your part and full cooperation with the OR, and that you have nothing untoward to hide
Hope this helps
Kind Regards,
Brett England
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
View my story at:
http://www.bankruptcyhelp.org.uk/forum/topic.asp?TOPIC_ID=594
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melanie_giles
Senior Member
1191 Posts |
Posted - 28 March 2008 : 22:41:12
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The key to the car issue is to check the terms and conditions of the HP agreement, as it is likely that this will terminate in any case upon the making of a bankruptcy order, giving the finance company the right to repossess the car. That does not necessarily mean that they will do this - often they are happy to see the ongoing payments made, but this of course also needs the Trustee's permission.
With regard to the property transfer, the transfer to your father for a nomincal consideration is unlikely to be of issue, given the figures you have quoted. |
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introuble
Junior Member
United Kingdom
226 Posts |
Posted - 29 March 2008 : 09:01:54
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Sorry to hijack a thread but I cannot seem to post questions and keep getting an error messgae I have just a few questions regarding my impending bankruptcy which fit loosley with this thread:
1, All the debt is in my name bar Car. Do I declare the car debt repayments on my petition outgoings. The car and finance is in my wifes name. My wife is not declaring BR. We are trying to keep the car going. Even leaving the repayments off my outgoings far exceed incomings so I do not think an IPO is going to happen. The repayments are currently £230.00. Car value £12000. Finance settlement £11000. We have 4 children so need something safe and reliable. No payments have been missed.
2, If we try and keep the car going we are looking at reducing the repayment amounts i.e. downsizing to a car about £6000. Will the OR allow this or will he review it as preferential over a creditor even though it is my wifes debt.
3, Do I declare that I have access to a car that is not legally mine on the petition form or do I declare it as a car that I own?
4, Can a judge throw out a bankruptcy case and if so is another court fee payable for resubmitting.
5, The reason I ask question 4 is that I am currently Self Employed and looking at getting a job. So as it stands my income level is not good. Therefore should I get a job first to prove income or should I file then get a job (iam obviously looking all the time regardless). I am concerned over this but as I want to get on with this I need to know that I am defo BR to confirm to prospective employers. I fully understand the implications of the BR and restrictions to employment types.
6, Regarding disposal of cars. All private cars have been in my wifes name and have been disposed of and then just refinanced. Do I declare these.
Regards
David
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Edited by - introuble on 29 March 2008 10:13:19 |
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melanie_giles
Senior Member
1191 Posts |
Posted - 29 March 2008 : 14:38:16
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Hi there introuble and welcome to the forum
I am sure that the site administrator will be along shortly to sort out your access issues. Turning to your specific queries:-
1 As the finance is in your wife's name, she will be responsible for paying the ongoing payments, and you should therefore not declare that as an expenditure item personally, but it is of course a household expense.
2 The OR has no call over your wife's financial position, but you will not be allowed to fund any of her expenditure.
3 Declare that you have access to the car.
4 Yes - bankruptcy is not an automatic right, but if it does not proceed you will receive your deposit monies back.
5 The timing of your employment has no real relevance, you just need to accurately put down your earnings (whether they be from earned or self-employed income) at the time you make the application.
6 Again - if the cars belonged to your wife then they have no relevance to your bankruptcy.
Hope this all helps and good luck with the application. |
Edited by - melanie_giles on 29 March 2008 14:39:16 |
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introuble
Junior Member
United Kingdom
226 Posts |
Posted - 29 March 2008 : 14:49:51
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Hi,
Many thanks for reply. With regards to my putgoings obviously my wife and I are resposible for these as well as the income that is coming in is shared between us both. How can the OR determine where I have not helped with the repayments of the car or not?
introuble |
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introuble
Junior Member
United Kingdom
226 Posts |
Posted - 29 March 2008 : 14:52:48
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Can I also add:
On my form I have detailed all the outgoings as a family we incur except for the car. The incomings are everything we have coming in. Therefore do I need to adjust these figures to apportion to my side and Wifes side i.e. split them 50 50 or something like that?
Also if I cannot prove that I currently have enough income so satisfy even my basic outgoing i.e. prior to me getting a job could the judge throw it out because how can you possibly continue. Also I am getting help from parents do I need to declare that also?? |
Edited by - introuble on 29 March 2008 14:59:05 |
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melanie_giles
Senior Member
1191 Posts |
Posted - 29 March 2008 : 16:30:09
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You just need to tell the OR what you pay for and what your wife pays for, and if the expenditure is deemed to be shared they usually operate on a 50/50 split basis.
The judge will not deny you a bankruptcy order because you have negative income - but clearly you cannot afford to continue to live like that for very long. If you are being funded by your parents at the moment you should mention that in the documents. |
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introuble
Junior Member
United Kingdom
226 Posts |
Posted - 29 March 2008 : 20:45:13
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Many thanks for this info, another question if I may:
What is the difference in real terms between Discharged and Undischarged. If I am Undischarged I understand the protocols exist. Once discharged does that mean the restrictions on gaining employment in say Financial Services come into play again.
Just try to get a handle on the differencies between the two terms. |
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introuble
Junior Member
United Kingdom
226 Posts |
Posted - 29 March 2008 : 21:09:35
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Sorry still having trouble posting new messages:
As part of my debt I have secured lending an a van and some plant equipment. I have detailed this on my petition.
I may have two options. Is there anyway at all of me keeping hold of this equipment but being able to have it in the pot but then buy it back for a nominal sum??? Or am i being a bit of an optimist seeing as doing what I do got me into this trouble through lack of work but with a clear slate and additional employed work it may now work?
Or alternatively there is potentially a good chance of selling before petitioning. Is there any issue over this aslong as the money is used to pay back the debt. Should I try and get what I can for it and any shortfall pass as an unsecured debt. We are talking around £18000.00. Possibly a little equity in it.
Or alternatively can it pass to the Creditor pot but I could still try and sell it for the OR i.e. I can find the best place to sell it through business contacts and then any shortfall passed as a unsecured debt??
If I think that it may be sold with a shortfall after the petition should I include a figure of potential unsecured debt?
Mainly wondered if I should try and sell first.
Regards |
Edited by - introuble on 29 March 2008 21:18:07 |
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melanie_giles
Senior Member
1191 Posts |
Posted - 30 March 2008 : 16:36:01
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First of all to your first post - getting discharged from bankruptcy means that you are discharged from the restrictions imposed by it - such as they taking of credit, the need to declare your bankrutpcy to suppliers, and the denial of carrying out certain occupations.
With regard to the secured charges on your assets, if they are essential to your business the OR may well allow them to be retained, so long as you can afford to make the ongoing finance payments and that the secured lenders do not want to take posseession of the assets under the terms of their loan agreements.
If a sale of the assets is likely to create a shortfall, I would leave that side of things to the OR to sort out to be honest. |
Edited by - melanie_giles on 30 March 2008 16:37:06 |
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introuble
Junior Member
United Kingdom
226 Posts |
Posted - 30 March 2008 : 16:49:23
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Hi Melanie,
Many thanks for that. Additionally with regards to my accounts for business as I have been using an accountant how do I close down my final accounts if I am no longer trading. i.e. If I have not got the money to pay for it how do I declare my income etc. Also I have to do something as I have Child Tax Credits so defo need to tell them my income as declared on my return. Or is this something the OR will deal with. I obviously cannot incurr a debt re accountancy fees as in my mind that is preferential treatment.
I also have a VAT bill that will become due in a few months only a few hundred punds about £300.00. Should I use this money to pay creditors or defo keep this money apportioned to the VAT man.
Regards |
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Topic |
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Secured loans/HP?
