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

Moderators: TalbotWoods, JaneClack

By peter 1974
#1862 hi i have debts of of 30k curretly on income support and have no surplus as i have a family and have a failed i.v.a behind me which i have paid £7500 into
will i still have to find the money to go bankrupt and if i do have to find the money can i use any of the money that i paid into the i.v.a
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By Nicky
#1864 You can either petition for your own bankruptcy at a cost of £450 or let the creditors do it for you.

The money already paid into your IVA should still go to your state, except the IVA fees I would think. Therefore, your creditors will still get the money one way or another minus the fees for your IVA.
By peter 1974
#1865 how do i let the credtors do and how long would i have to wait
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By Nicky
#1867 The creditors should be informed regarding you failed IVA by whoever was your case officer with the IVA company. It will be up to the creds then to decide whether to go for bankruptcy.

Depending on how long ago it was when your IVA failed, it could be that your creditors have already been informed. It might just take anywhere from a few days to a few weeks before the creds start to contact you. As long as you explain when they ask the reasons the IVA failed, and inform them that you have no surplus, you should soon find out what action, if any, is taken.

Do you have any assets?
By peter 1974
#1868 the i.v.a failed in june and case officer sent out letters just after that but up to today i not any letters of any creditors
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By Nicky
#1869 Well, it might be that they figured it wasn't worth petitioning for bankruptcy if they are not getting anything out of it. What has happened to the money you paid into your IVA?
By peter 1974
#1870 the company that was running it still have it there is about £7200 in the fund and i owe about £27000 but when i was paying back the i.v.a i was self employed but the work dried up and i was left with more debts and could not afford to pay my i.v.a as i am now on benfets so as off today my debts are about £30.637 and would like to get this all over and done with and start to rest a bit easy but if i go for bankrupcy i no at the moment i cant afford to pay the courts the money is they any other way i can do it or would i be able to get a grant of the social as i am on income support
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By JaneClack
#1874 As you are on income support the court fee of £140 will be waived but you would still have to pay the "bankruptcy deposit" of £310. There are some charitable funds that can help - I can think of the electricity supplier EDF and some of the water companies such as Anglian Water. It seems unfair that you should be precluded from going bankrupt because you cannot afford it but you are one of many in the same boat. You need to scrimp for the next couple of months to get this figure together. You will not get any refund from the Insolvency Practitioner as they need their fees and if any was left over it would have been distributed to the creditors. This is the normal procedure. Often there is money in the arrangement to make the client bankrupt if it fails but it looks as though this hasn't happened. Good luck.
By peter 1974
#1891 hi sarah and thank you for the informaion after being lookin at the money coming in and out and its not a lot with two children if i was to get a job full or part time would that effect me going backrupt and would i have to pay any of my creditors back as i owe over £30k
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By JaneClack
#1893 If you went bankrupt and then found a job you would need to let the Official Receiver know within 21 days. This is so he can re-assess your ability to pay - and to be truthful is the reason that a lot of people do not look for well paid employment during bankruptcy or work overtime. However, from being on benefits to earning enough to keep a family of four is quite a jump and remember the OR will only want about 50 - 60% of any surplus income anyway. If it is a simple first bankruptcy there may well be an early discharge anyway - within 6 to 7 months of the order and if no income payments arrangement or order has been set up in this period you could win the lottery the next day with nothing more to pay! If you do have enough to make an IPA it would last 3 years which is still a pretty good return for wiping out £30K worth of debt andwould make no difference to credit rating as that stays on file for six years anyway! Only you can see what difference it would make to the household whether you worked or not. Remember that your partner is not responsible for your debts and her income should not be included in the petition! :wink:
By peter 1974
#1895 thanks you for the information just need to find the money now the easy bit :?: