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leen.ow
Starting Member
31 Posts |
 Posted - 10 January 2010 : 18:31:30
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Hi All,
I have been running away from large debts (c.40k)for about 2 years, mainly as a result of a relationship break-up, house repo and all that joy. Now, after considering an IVA for a while, I have decided to take a leap of faith and go BR in april (april being because my new partner, who has no debts at all, and I are moving house in march...so I am waiting to see what our expenses will be after that so I am better prepared to give an accurate I&E to the OR).
I have read alot on here including the very useful blog of skippy13 which I found most informative, and further inspiration that I am doing the right thing. I have also talked about it with my new fiancee who supports what I am doing so we can have a brighter future.
Still, I have one or two queries to satisfy, and I hope you can help.
1) As i earn a decent enough wage (25k) I know I will almost certainly have an IPA. I earn about 70% of the household income, so am I right in thinking my allowances will be 70% of the recommended allowance for 2 people?
2) I need a car as I work sometimes outside of public transport hours, and travel during the job to see customers etc. I have a 56 reg vectra on HP which is probably worth about 3-4k. I understand a vehicle over 2k is excessive and often the OR sells it and lets you get a cheaper car...which would be fine....however as the car is owned by the HP company (british credit trust) I am certain they would just repo it anyway. So how could I go about getting a cheaper car before or at the point of BR? I don't want to end up with no car!!
3) I have a basic bank account with natwest with a solo card and no overdraft, would I be allowed to keep this due to it's basic-ness?
Thank you for your time, and well done Skippy13, your blog is to thank for me only having these 3 questions to ask!
Lee |
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debtinfo
forum expert
2826 Posts |
Posted - 10 January 2010 : 18:59:42
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1) Yes they will assign 70% of the household expenditure against your wage meaning your surplus will be lower than if you earnt 50:50
2) Are you up to date on the HP payments, are you certain it is HP and is more owed than the value of the vehicle
3)The OR will not close it, whether Natwest will is anyones guess
hope that helps |
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leen.ow
Starting Member
31 Posts |
Posted - 10 January 2010 : 19:08:28
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Thanks for your reply debtinfo.
Yes I am up to date with the payments, yes I am sure it is HP, and I do not expect the car is worth more than I owe as the apr is 34.9%
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debtinfo
forum expert
2826 Posts |
Posted - 10 January 2010 : 19:13:25
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| then the OR will have no interest in the vehicle. This means that it is between you and the HP company. Some have a strict no bankrupt policy and will repossess the vehicle. Some are ok as long as you keep up with the payments |
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leen.ow
Starting Member
31 Posts |
Posted - 11 January 2010 : 19:43:26
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Ok. Well, I can speak to British Credit Trust, but even if they allow me to keep the car and continue the payments (£271 a month) is the OR likely to allow this in my income/expense for working out my DI for an IPA?
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Steve Thatcher
New Member
United Kingdom
70 Posts |
Posted - 12 January 2010 : 12:05:36
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You should be allowed to keep the car I suspect that it will not be re-possesed as the creditor will be better off if you pay the finance than if they re-possess and sell it.
As for your disposible income, there are plenty of allowances that you can put on your statement of affairs to mop up "spare cash" (as if anyone has this.) You can allocate up to £80 per month for a holiday, and I always put in a contingency of £50 per month. I always tell people I counsel that your I and E in a bankruptcy is never the same as an IVA.
I worked for an IVa company for a while and one chap had £500 DI in the IVA, but when I took him through bankruptcy, he agreed and IPA for £75 a month. He saved himself two years of payments and about £25,000.
Steve Thatcher
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Edited by - Skippy on 13 January 2010 12:03:11 |
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Jane.l
Average Member
511 Posts |
Posted - 13 January 2010 : 10:52:08
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| You are not allowed a contingency in bankruptcy, I was not allowed a domestic break either but some ORs allow this |
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leen.ow
Starting Member
31 Posts |
Posted - 13 January 2010 : 17:00:15
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Yes I have not seen contingency allowed in anything I have read and a maximum of £20 seems to be the going rate for holidays. I am still none the wiser whether the OR would allow the £271 car HP.
Another thing, what about things like guitars and musical gear? would they be classed as assets and seized and how would they even know i own such things? Does somebody come to your house and see what you have?
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Jane.l
Average Member
511 Posts |
Posted - 13 January 2010 : 17:12:37
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I should think guitars and suchlike are not worth the OR claiming unless we are talking about loads of money
I would not even list them on your SOA, the OR does not come to your house, only in extreme cases whereby he thinks a bankrupt is trying to hide assets
Carwise: I do not think you would be allowed that amount, my car was on HP and was about the same monthly payment as that, it was worth about £10,000, and yes, the finance company came and repossessed it. We knew our cars (we had one each on HP) would be taken so we bought an old banger for £400 cash just before bankruptcy and had to share that for a while, it lasted 2 years in the end  |
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leen.ow
Starting Member
31 Posts |
Posted - 13 January 2010 : 17:36:58
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Ok. Well I might be better off stopping paying the HP a couple of months before I go BR and using that money to buy a cheaper car, I expect the HP company would not repossess it until I had missed 2 or 3 payments anyway.
Another different subject now, when I have to explain myself to the OR about how my debts had amassed, what sort of things would be considered unacceptable and make a BRO/BRU likely? None of my debt is through gambling or such like, it's really just serial debt consolidation over the years and the fact that a relationship broke down and I could not afford mortgage alone, or the 25k unsecured loan that was part of the mortgage deal (to pay deposit on house and comsolidate previous debts)
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Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 13 January 2010 : 18:00:33
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your last enrty is exactly what the Or wants to hear, it explains a reason and time frame
good luck Richard |
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debtinfo
forum expert
2826 Posts |
Posted - 13 January 2010 : 18:03:59
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Hi leen. First of all to get a BRO you must have been insolvent when you did things. IE if you lost £20,000 gambling but was not insolvent at that time then you would not get a BRO. The OR looks at thinks like, taking credit with no reasonable prospect of repaying, deliberatly disposing of assets to avoid repaying creditors etc etc
just a note on steves post, try and be as honest as possible with the OR. Please do not inflate your IPA, the OR will probably question you about what you have put down and it is much easier to explain what you do pay rather than notional figures that someone else has told you to put. Do try and think of everything you do spend, as usually as long as you can explain why you need it and it is reasonable the OR will allow it |
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Housing
Senior Member
United Kingdom
1399 Posts |
Posted - 13 January 2010 : 19:31:13
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Hi leen.ow
Just seen your postings
This forum is great for sharing ideas and experiences.
The experts give their time free and the insolvency experts that post here are amongst the best...
My advice is generally on housing issues - looking at ways to save a home if it is right to do so - I have seen far to many repossessions where a stop, consider and then decide may assist.
Best regards, Richard
"Life is generally something that happens elsewhere" (Alan Bennett - author and hero of mine!!) |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 14 January 2010 : 06:53:29
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Hi Leen,
I had similar debts when I declared BR; 3 consolidation loans, 4 CCs and a couple of other loans and, other than a car, I didn't really have anything to show for it.
My problem was that after getting the consolidation loans I paid off my CCs but didn't cut the damn things up so went back to my old habits of using them for everyday items. Don't think that you are the first person to do this or that this will be the first time that the OR would have heard this. I was very nervous during the interview and after explaining each of the debts and what I had used it for the OR said that it wasn't anything anyone hadn't done before, which made me feel a lot better. I didn't have a BRU and received an ED so serial debt consolidation in itself isn't grounds for a BRU.
My advice is to be completely honest with the OR and not to try to hide anything and the whole BR process will go very smoothly. |
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leakie
Junior Member
United Kingdom
158 Posts |
Posted - 14 January 2010 : 07:32:38
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Hi Leen.ow
When I had my van on HP the contract stated that the car can not be taken back from you when you have made so many payments, I think it was half way through in my case,
so it may be worth looking at the credit agreement,
to see if this is the case.
If it is then surely the remainder of the HP would be included in the BR,
I'm not 100% sure if that is the case but it is worth looking into.
All the best
Leakie |
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Melanie.n
forum expert
United Kingdom
1282 Posts |
Posted - 14 January 2010 : 08:24:12
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Just to add a few points:
These days the OR is clamping down on many expenditures and the max you would get away with is £20 for holidays and would not allow anything for 'contingencies' A good tip is to go through your bank statement and look at what goes out per month such as life insurance, boiler cover etc £25 is an acceptable amount for house maintenance and a further £25 for vehicle maintenance plus petrol costs, insurance and car tax.
With regard to the HP many OR's are now 'allowing' these to continue, in that they leave it to the HP company most of which are more than happy to continue to receive the monthly payments as opposed to collecting the vehicle and claiming the debt in the bankruptcy. Provided of course the vehicle is required for you to travel to and from work.
Melanie Nicholas
29 years insolvency experience - 23 of which in the Insolvency Service
- Insolvency Manager
Jones Giles
email me at melanienicholas@jonesgiles.co.uk
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Topic |
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I have been running away from large debts
