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DJ83
Starting Member
10 Posts |
 Posted - 23 October 2009 : 13:09:59
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| I am considering bankruptcy and have applied for the papers. The only asset that I have is a car as my partner and I rent a property. If my application is approved, what actions will be taken? I have been told my bank accoutns will be frozen and closed down as the overdrafts are maxed out. How will I get my wages paid to me? Is it standard for people to open up bank accounts in other people's names so that they can still be paid? I have been advised to stop my creditors direct debt payments (Loans/Credit cards etc) as I will be going bankrupt anyway. Again, is this standard or should I wait until my bankruptcy application has been approved? How long does the whole process take, and are the repayments high? Equally, how long do the repayments last and is it all worth it? Sorry for all of the questions. I am 34k in debt (£24k is loans/overdrafts/credit cards, and £10k is a student loan). Currently I have about £60 a month left to spend after all of my direct debits come out, although these payments include Sky TV, a mobile phone and a season ticket to a football club. I assume they will make me give up going to football and having Sky TV? |
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In 2 Deep
Junior Member
United Kingdom
161 Posts |
Posted - 23 October 2009 : 13:56:53
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Hi DJ,
To answer your questions in order:
1) As long as your car is worth less than £2k and you require it for essential journeys; the OR will allow you to keep it.
2) Your application for BR will only be rejected if you are solvent.
3) Your accounts will be frozen by the OR. Have a look at the Co-Op Cashminder account - they have very good reviews and are BR friendly.You can then arrange for your salary to be paid into this account.
4)STOP using all cards / credit from now on, and save the money for your BR fees.
5) Contact your local court who will advise appointment time etc:
http://www.hmcourts-service.gov.uk/HMCSCourtFinder/
6) Any DI above £99, you will more than likely get an IPA. You will pay 50%-70% of your DI for 36months.
7)I am not sure about inclusion of your student loan. No doubt an expert will cover that topic.
8) You will have to fund luxuries such as SKY, Gym membership from your DI.
Hope this helps, and best of luck.
quote:
Originally posted by DJ83
I am considering bankruptcy and have applied for the papers. The only asset that I have is a car as my partner and I rent a property. If my application is approved, what actions will be taken? I have been told my bank accoutns will be frozen and closed down as the overdrafts are maxed out. How will I get my wages paid to me? Is it standard for people to open up bank accounts in other people's names so that they can still be paid? I have been advised to stop my creditors direct debt payments (Loans/Credit cards etc) as I will be going bankrupt anyway. Again, is this standard or should I wait until my bankruptcy application has been approved? How long does the whole process take, and are the repayments high? Equally, how long do the repayments last and is it all worth it? Sorry for all of the questions. I am 34k in debt (£24k is loans/overdrafts/credit cards, and £10k is a student loan). Currently I have about £60 a month left to spend after all of my direct debits come out, although these payments include Sky TV, a mobile phone and a season ticket to a football club. I assume they will make me give up going to football and having Sky TV?
Treat EVERY Penny as a prisoner. |
Edited by - In 2 Deep on 23 October 2009 14:38:16 |
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DJ83
Starting Member
10 Posts |
Posted - 23 October 2009 : 15:29:33
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| Sorry for being stupid, but what do you mean by 'My application will be rejected if i am solvent'? Sorry, I don't know what solvency is. My car might be valued at slightly more than £2k, but i use it for work. Would they want to take it? What is a DI and an IPA? Will they physically put a stop on my direct debits for my season ticket or advise me that I have to do this? Thanks. |
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In 2 Deep
Junior Member
United Kingdom
161 Posts |
Posted - 23 October 2009 : 15:57:13
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DJ,
IPA = Income Payment Agreement:
One of the aims of bankruptcy is that the creditors should receive part or full payment of what they are owed. Creditors often feel aggrieved when they believe that the bankrupt continues to enjoy a good lifestyle whilst the debts remain unsatisfied. To address this point, section 310 of the Insolvency Act 1986 provided that the trustee could apply to the court for an order that the bankrupt (or his/her employer) made regular payments from his/her income into the estate, from ‘surplus’ income. Such an order is known an Income payments Order (or IPO).
DI = Disposable Income.
Regarding your car, you would have to prove to the OR that it is a necessity i.e. you need it to travel to/from work etc.
I would consult one of the forum experts, and discuss your specific details with them.
Solvent = Being able to meet your debt obligations. If you have no money to pay your debts, after all essential payments such as council tax etc then technically your are insolvent, and can petition BR.
Gd luck.
Treat EVERY Penny as a prisoner. |
Edited by - In 2 Deep on 23 October 2009 15:59:19 |
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mick1972a
Junior Member
235 Posts |
Posted - 23 October 2009 : 16:15:27
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DJ83 If you have in excess of £99 after all you living costs are paid out you will have to pay a percentage of this excess to your creditors for 36 months.
Your saying that you only have £60 after all living costs are paid so you would not get an IPA and therefore no payments would need to be made.
Its worth checking to see what living costs are allowed as stuff like a domestic break, dry cleaning and work meals are allowed, stuff that I never thought would be allowed as a living cost.
Mick |
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DJ83
Starting Member
10 Posts |
Posted - 23 October 2009 : 17:27:23
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| I am meeting payments fine and have not missed a payment, but I am left with the bare minimum each month, so it was advised that I go bankrupt. As i am meeting payments (and £200 of that is a direct debit to a football club which obviously isn't essential), is it likely that they will reject my bankruptcy application? |
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 23 October 2009 : 17:43:05
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As far as I am aware, Student Loans are not included in bankruptcy.
If you were to cancel your DD for the season ticket now, and you would have to with BR, then you should be able to manage.
If your £60 is left after you have paid for food etc., then I don't think you are insolvent.
The glimmer gets brighter all the time
Jan
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debtinfo
forum expert
2826 Posts |
Posted - 23 October 2009 : 17:47:09
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| Hi DJ83, probably best to make a list of all your income and essential payments (including you required debt repayments) and see what it comes out at |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 23 October 2009 : 18:21:06
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There is an I&E expenditure form at http://www.makesenseofcards.co.uk/soacalc.html. This will allow you to check whether you actually are insolvent or not.
Student loans are not included in BR so if you do declare BR this £10k will not be included.
Paying £200 each month for a football season ticket and having £60 disposable income means that you are not insolvent. Being insolvent means that after you have paid your rent, food (£200 for 1 adult), utility bills, clothes (£43), telephone (£33) and travelling to/from work that you do not have enough money to pay your creditors.
From what you have said this is not the case as you have £60 DI and £200 for the football club. All you need to do is to prioritise your debts in order to pay them off over the next few years. It won't be easy but, from what you have said, you are not insolvent so will not be allowed to declare BR.
Have a look at the Money Saving Expert site (http://www.moneysavingexpert.com/) and forums (http://forums.moneysavingexpert.com/index.html) as there is a huge amount of information there regarding paying off debts, making savings, etc. |
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DJ83
Starting Member
10 Posts |
Posted - 23 October 2009 : 20:03:46
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| The people are advising me to go bankrupt have been bankrupt themselves, and they said that they were meeting repayments and were not rejected. I am meeting all of my payments but am left with minimal each month. I am confused as to whether I can apply for BR or not? If I mske the application and pay trhe fees, at what point are the fees payable, how much are the fees, and are the fees refunded if my application is rejected? The argument that my friends posed to me is that although I am meeting payments, I am getting myself more into debt by doing this such as being charged high interest and only being able to make the minimum repayments. To now see that Halifax will be charging me £2 a day for overdraft fees is very worrying. Am i wasting my time by applying for BR? |
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 23 October 2009 : 20:17:29
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You have disposable income - at least £260 once the season ticket is cancelled and if you have that after making your payments, you are not insolvent and won't be able to go bankrupt.
The fees are payable when you get to court and I have no idea if they are refunded if you are turned down.
The glimmer gets brighter all the time
Jan
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 23 October 2009 : 21:43:13
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quote:
I am meeting all of my payments but am left with minimal each month.
Paying £200 per month for a season ticket and having £60 DI after you meet your creditor repayments it NOT leaving you with a minimal amount. Paying your rent, food, utility bills, creditors, etc. and then having £1 left over IS leaving you with a minimal amount but even then you are not insolvent.
Being insolvent is not about having a minimal amount left over at the end of the month, it is about not having enough money to meet all of your necessary (food, rent, creditors) outgoings. By necessary I do not mean spending £200 on a luxury item like a season ticket.
quote:
To now see that Halifax will be charging me £2 a day for overdraft fees is very worrying
This makes £60 per month and with your DI of £60 and your season ticket of £200 it would still leave you with £200 excess each month that could go towards paying your overdraft off.
quote:
Am i wasting my time by applying for BR?
Yes. When you declare BR one of the things the Judge and checks is whether you have taken any professional advice. If you haven't then the Judge will not declare you BR and you will have lost the BR fee of £510. If you are declared BR the OR will check whether you were actually insolvent. The OR does have the power to petition the court to annul the BR although I am not 100% sure if they would do so if they found out you were solvent but it is not something I would chance. The OR also has the power to increase the BR restrictions so that they can apply for up to 16 years and this is not something to be taken lightly.
If you do not want to look at the websites I have mentioned in my previous post in order to try to pay your debts off or complete the I&E expenditure then you should speak to the CCCS, CAB or National Debtline. They provide free assistance with debt problems and will be able to advise you on the best course of action in your situation.
It sounds like you are looking for an easy way out of your debt and do not want to give up on the luxuries in life in order to knuckle-down and pay off your current debt. Do not make the mistake of thinking that declaring BR is an easy way out - it isn't! Practically every person who declares BR will be bitten by the action at some point. It may not be immediate but it will definitely come back to haunt you at some point in the future. |
Edited by - gettingoutofdebt on 23 October 2009 21:48:45 |
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 24 October 2009 : 10:02:22
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Well said gettingoutofdebt. I couldn't agree more.
DJ83 seems to be wanting to have his cake and eat it.
With any debt solution then there has to be tough budgeting and luxuries such as a season ticket are out of the window.
I think you are going to have to accept the fact that bankruptcy probably isn't for you, and you should carry on paying your creditors as you have been. Give up the season ticket and you should manage quite well.
The glimmer gets brighter all the time
Jan
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Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 24 October 2009 : 10:30:50
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Well said gettingoutofdebt.
DJ83, you only have a minimal amount left each month because you choose to do so. You could easily have an extra £200 a month, and if I remember your post on the IVA forum correctly there are other cutbacks that you could make as well. You would be expected to make those cutbacks if you were BR anyway, so do it without the stress of BR.
We all have to make cutbacks that we don't want to, it's called living in the real world. You borrowed the money presumably with the intent of paying it back, and as you have the means to do so, you're not insolvent.
Tomorrow is a mystery, yesterday is history, today is the present, a gift to make the most of.
View my blog at http://skippy13.blogs.bankruptcyhelp.org.uk/
27 IPA payments made, 9 to go - in single figures! |
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Housing
Senior Member
United Kingdom
1399 Posts |
Posted - 24 October 2009 : 11:10:13
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Hi,
I have to agree with gettingoutofdebt, kallis and skippy.
The luxury of a season ticket is a no no - I love rugby and I would love to go to see my team and my national team (Wales) at every opportunity - simply fact is - I cannot afford it!
Not wanting to be a martyr, we have cancelled Sky (£23) as we cannot afford it - our granchildren are a bit sad when they come to watch "Spongebob" - but it is not there now!!!
If you are going to enter BR, then you must be honest with all concerned - especially the OR!
I am not trying to lecture - not my style or even my business - simply based on experience - whatever you do, I wish you well, but think first. Richard
"There are no problems - only solutions..." |
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chester2005
Average Member
United Kingdom
786 Posts |
Posted - 24 October 2009 : 21:51:43
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as far as i am aware, you are insolvent if you owe more than you own, so in theory you are insolvent, and if you wished you could use the laws of insolvency and bankruptcy to your advantage and declare BR and wipe the slate clean as regards your debts.
the reality is though that your diposable income would be potentially £260 and you would have to pay 50-70 % of this for 36 months into an IPA towards your debts.
your choice, and maybe you would benefit from a free chat with an expert like RevivaUK (BR)or jones giles(IVA)
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurman)
RevivaUK helped me through it all i can't recommend them enough!! |
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am considering bankruptcy
