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

Moderators: TalbotWoods, JaneClack

By debtdevil
#471918 Hi all,
This is my first post on this forum, I am going to be going to court next week to declare myself bankrupt and also my partner. I have contacted several places for advice for information and intend to do so before I go to court next week. I am still a little vague on the process and what happens. This is a quick breakdown of the situation.

I earn 1500 a month my partner (not wife but mother of our children) earns about 500 all in. we hav 2 young children both at school.

We have about 12 creditors (inc. 2 loans) £60,000 debt. this as increased over approx 10 years but has now become unmanageable.

My job is steady but recently had to change jobs due to health and take a pay cut which has made things harder. my partners job may not be safe in a couple of years as her boss is winding down to close shop.

We do not own our own home and rent a small property which is more undersized for our needs and justified.

I don't work in a money type of job and don't plan becoming or have never been a company director.

we both have cars that are worth under £1000. I use mine for my job as it involves travelling between areas and she uses hers for school run and travelling to and from work approx 35 mile round trip.

We don't own excessive amounts of valuables these include example e.g. 3 x bikes, xbox one, ipad, laptop, probably about 500 quid of hobbyist tools/stuff and normal furniture not excessive value.

Im pretty set in that the best option is to go bankrupt. the main questions are:

1.Will we be interviewed by the official receiver together as we will both declare but don't think u can do a joint bankruptcy its complicated because even though we aren't married and don't have joint accounts we have always shared money all in the same pot?

2.With this history of debt, what should we expect, will we be discharged in a year and have pay monthly for 3 years or could it possibly go on for longer.

3. My children have about £2000 and £1500 that we have never really paid into and all the money is from birthdays and christmas. almost all is in kids bonds in there names but with my partners name on the account. what will happen to my kids money as this is not ours?

4.What items will i be expected to give up, i have read about whats required but cannot find anyone who as actually given a list of what was taken from there home. don't know what items to declare and how much detail. In some respects would be better have someone come to my home to look! do i count the number of spoons in the kitchen? what i think doesn't count they might consider, we just have that much stuff but nothing that is really worth the effort putting on ebay for what it would sell for???

5. Before considering bankruptcy in the last 12 months i have sold two items, one was £350 and the other was £600 this money was used to pay car bills and general living. I have no records of transactions as they were sold for cash but they were purchased originally in the last 12 months and show on my card statement. Is this an issue because they may think I'm trying to hide things.

6. my partner is making a compensation claim, i will inform them of this but does the pain and suffering part have to be given or just the loss of earnings. probably won't be massive amount just a general whiplash leg injury.

7. I have a number of tools which I can't see being profitable to sell, but if they claim them do they pull up outside in a van in front of the neighbours or can u arrange to buy these back at some point or take them somewhere save the embarrassment

8. I know I'm in debt but don't really want them take anything, whats a realistic picture I don't want to be left sitting on the floor watching a black and white TV lol with kids wearing bin bags

Thanks to anyone who can shed some light on these questions

Thanks
User avatar
By TalbotWoods
#471919 Hi and welcome

Form what you have said I strongly suspect that both of your bankruptcies will be considered simple and straightforward. You certainty have not said anything that rings any alarm bells.

Going to cover you main questions first.

1.Will we be interviewed by the official receiver together as we will both declare but don't think u can do a joint bankruptcy its complicated because even though we aren't married and don't have joint accounts we have always shared money all in the same pot?

It is possible from what you have said that you will both get a telephone interview, rather than a face to face one, it doesn't matter one bit if you are married or not. The bankruptcies will be treated as individual, but the sharing of costs would be normal if you live in the same house. So no concerns here at all.

2.With this history of debt, what should we expect, will we be discharged in a year and have pay monthly for 3 years or could it possibly go on for longer.

The OR will ask you what the debt is, how you came about getting into debt, what you did about it. No Concerns from what you have said

With regards any payments, called Income Payment Agreements, it will depend on what you have left from your income AFTER legitimate expenditure. If you have an excess of more than £20 then you may get an IPA, but if you both adjust what you both pay out and shares, you may find you are surprised how quickly that excess may disappear. The aim is to make sure you are sustainable after going bankrupt! As I say it depends on your Incomes and Expense Sheets, but I don't think you would get a large IPA if one at all.

OK depending on if you pay tax out of your income, you may have to pay a Nil Tax IPA until the next Financial Year (FY). This is where HMRC stops collecting tax from you, and you have to pay it to the OR. It goes back to normal and you stop paying if you cahnge job, stop working or the end of the current FY arrives! Doenst alwasy happen as HMRC sometimes forget to set your tax code to NT.

3. My children have about £2000 and £1500 that we have never really paid into and all the money is from birthdays and Christmas. almost all is in kids bonds in there names but with my partners name on the account. what will happen to my kids money as this is not ours?

You MUST tell the OR how you came into this money, and list it in Section 13. If any of this is Child Bonds ect, let the OR know. If you have the account books, statements you will need to show them to the OR. Normally if you explain where the money came from, and it is obvious you are not hiding you money in there it will be safe. No concerns here if you are open, honest and have not suddenly stuffed a couple of grand in there to hide it from the OR

4.What items will i be expected to give up, i have read about whats required but cannot find anyone who as actually given a list of what was taken from there home. don't know what items to declare and how much detail. In some respects would be better have someone come to my home to look! do i count the number of spoons in the kitchen? what i think doesn't count they might consider, we just have that much stuff but nothing that is really worth the effort putting on ebay for what it would sell for???

Unless you have the odd Bently car, or Constable Picture, the OR wont take a thing. When you list your assets you just need to list it as Normal Furnitures and Fixtures. So unless you do have that 300 Caret Diamond ring, then your safe. So no concerns here.

5. Before considering bankruptcy in the last 12 months i have sold two items, one was £350 and the other was £600 this money was used to pay car bills and general living. I have no records of transactions as they were sold for cash but they were purchased originally in the last 12 months and show on my card statement. Is this an issue because they may think I'm trying to hide things.

Unless you sold the items seriously undervalue, then no concerns. Just add a note to Section 13 explaining what they were and what you uese the items for (Bills, etc) No concerns here.

6. my partner is making a compensation claim, i will inform them of this but does the pain and suffering part have to be given or just the loss of earnings. probably won't be massive amount just a general whiplash leg injury.

OK the injury part is safe, but if there is an element towards loss of pay, or loss of entitlement to pay, that would be considered as an asset. Injury compensation he gets to keep, pay bit would be lost, even if it takes another 5 years to sort out!

7. I have a number of tools which I can't see being profitable to sell, but if they claim them do they pull up outside in a van in front of the neighbours or can u arrange to buy these back at some point or take them somewhere save the embarrassment

DO NOT HIDE ANYTHING! If they are tools of his trade, he will be allowed to keep them, if not still list them, and you may well find the OR will not be interested.

8. I know I'm in debt but don't really want them take anything, whats a realistic picture I don't want to be left sitting on the floor watching a black and white TV lol with kids wearing bin bags

STOP WORRYING. A lot of people enter into Bankruptcy, and then wonder what the fuss was about. Unless you have something of value the OR ain't going to be interested, and the kids stuff will be safe they wont loose anything, so you don't worry they will still be able to annoy you by watching late nite TV!


OK back to the bits I want to mention to you.

Bank Accounts - please read this sticky as it is VERY important. DO NOT CLOSE THE KIDS ACCOUNTS, but make sure the details are listed separately to yours in Section 13 and NOT in your accounts!

https://www.payplan.com/debt_questions/ ... =24&t=9905

:?: You say you have sought advice, can I ask what options to deal with the debt you have considered.

:?: Have you contacted other advice organisations such as The Money Advice Service

Ans stop worrying (which I know is natural) believe entering into bankruptcy is a LOT easier than you thing, seriously easier!

Tim
(c) All Spelling mistakes are my own design, infringement of them may result me sulking!
By debtdevil
#471920 Thanks for the reply!

I have considered both DMP (26 years + payback) and IVA but again longer payback and I don't have a house or expensive cars. Gone on now for years Just feel these options are more stressful over the long term and not in the best of health anyway just want rid to be honest.

With regard to my in and out goings is there any sites that give allowance amounts e.g.. acceptable food bill etc. ( I've done some reading around and seems to be £450 for a family of four or is it more / less) school trips etc. haven't really budgeted properly before so want to know what amounts I could use to cover my wage and not get into a situation again where I need extra or to borrow. Might sound like I don't want be paying back for the three years but not concerned about it be honest just want to be able to support my family.

Thanks Again
User avatar
By TalbotWoods
#471921 Budgeting is not that difficult, the thing to remember is you just to be honest about what things cost. For example, if you use £50 a month on electric put £50 don't try and cut down to £40, it is £50 nothing less, maybe a bit more, especially as winter is coming on.

There are no set figures, the OR look at each case, in each different area, and use that as a starting point. It will be different in London compared with sleepy Wiltshire.

There are things they don't allow for, such as Booze, etc. Some allow for a small amount for holidays, some don't, some allow more for fuel in a car others don't. And so on....

A lot of people forget things such as prescription, hair cuts, car MOTs, Fuel, TV Licence, Kids Clothes, etc.

Here is a simple I&E that you could have a go at filling in, and seeing where you end up. Do one for each of you, I suspect one will be a minus figure, don't worry, that is normal with people who live together, so that is why it is called balancing the budget (between yours and partners)

https://www.payplan.com/wp-content/uplo ... e-form.pdf

Just a thing to bear in mind, Student Loans, Court Fines, some parking fines CANNOT be included, so they must be classed as priority debts, so must be paid first before you have any other expenditure coming off!

See where you end up, and from that we can guide you, as to what the OR may find excessive, without good reason.

Tip you may want to type it up and save it, it will allow you to change things when it comes to balancing the budgets, etc.

Tim