Questions you have before making a decision to go Bankrupt and the Bankruptcy process

Moderators: TalbotWoods, JaneClack

By jackthelad
#8385 We have just failed an IVA and have now been told that will be petitioned next month. After reading a lot of the posts, we have a few concerns. Please help.

The biggest debt was taken, so that we could get the deposit for our present house, as the equity on our old home was so small and our new house so expensive.As we came from a much cheaper housing area, we struggled to get a mortgage, but did so through a financial adviser, who secured a mortgage that did not require employers / payslip verification. Mortgage payments were at a higher rate than most people paid and we turned to credit cards to keep us going.

Before we started the IVA process, we had opened 2 current accounts, which had overdraft facilities, which we have used for the last 8 months and which amount to £1500.


Could any of this be regarded as fraudlent or reckless ??

Whilst greatly increased outgoings, e.g. mortgage payments more than doubled from our previous house, have been the cause of most of our problems , we have not been good financial managers, exacerbated by stress and depression.

Could this be construed as reckless and could we encounter problems during the bankcruptcy process as a result ?

Any help / advice would ber much appreciated.


By jackthelad
#8397 Mel,
Yes, unfortunately I am aware of this, but no real choice now. Only have equity of £20k less fees, but I suppose they'll take that anyway.

I have a few other worries though. The hearing is close to the end of the month and if the bank accounts are then frozen, both of our salaries will probably be returned to our employer. How do we then get money to live on ? With our employers, it will be a real hassle to get the money back and could take quite a few days.Any way round this ?

Can our current bank take their overdraft from our salaries before they return it to our employers ?

If it takes 4 to 6 weeks to see the receiver, do we then have to put a case to draw our salaries, given that the receiver will not yet know the disposable income we will have until investigations are completed ?

If the creditors have asked that our current IP becomes the receiver, do we have any say in that, as we are not very happy with the way he has handled our case ?

Sorry for all the questions, but this is part of initial panic about our situation and what we will do.

Any advice would be appreciated.


By Mel_Odious
#8404 You MUST make arrangement for another way of having your salary paid. If the account is already frozen they should not accept the payments from your employer but if perchance they do accept them by accident then you won't be able to get at the money.
You also realise that your payroll depts. may realiise that you are bankrupt by you having a NT tax code for this financial year?

It would be big odds against the OR using the same IP as trustee but you could mention your concerns to the OR.

You must however make other arrangement for your salary payments. I asked for a cheque for one month as I was changing banks; they did this but didn't like it and stated it would be a one off arrangement.

User avatar
By Joannec
#8408 Ask your employers for one month to send out your salary by cheque. They you can just keep hold of the cheque until your new post bankruptcy account is opened. :lol:
By jackthelad
#8414 Yes, I have already checked about my employment status with my TU, they said it would not be affected and the security clearance people are also aware of the possibilities. So no real worries on that score.

I will try the personal cheque route and see what happens. Thanks for your advice folks.