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

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ByVanessa
#2474 Hello. Can anyone advise or share experience here ?

I was made bankrupt this April and own a property with my partner, who was also made bankrupt. His mother lives with us and contributed to the purchase of the house and is due roughly 50% of the sale proceeds once the mortgage is paid off - there is a legal document drawn up for this and the trustee has accepted it. However, the trustee has asked for approx £ 30,000 as my partner and my share of the interest in the house, which we simply do not have.

It is a high figure anyway - if the mortgage were redeemed tomorrow with all its costs etc and taking into account a 'fast' sale price there would be about 20,000 in total, of which 50% is our combined BI - about £ 10,000. There are no further assets and based on the trustee's breakdown of costs, this would still not return a penny to creditors - the trustees ( and OR ) costs are estimated by them at about £ 20,000. The total ( combined ) debts of the bankruptcy were about £ 100,000 - before OR fees etc!

WE may be able to ask my family to put forward a lump sum, or combine a lump sum + monthly payment from both families ( neither of us have a surplus income ) and an insolvency solicitor suggested that if this were the case we may be better proposing a fast track VA and asking for both bankruptcies to be annulled.

As I understand that this is a relatively new possibility in this year's EA, could anyone advise whether this is a possibility and how we would go about it ? The insolvency solicitor was very knowledgeable and pleasant but suggested an IVA almost immediately - having tried one once and had it thrown out at the Interim stage ( one creditor is due 40% so has overal voting rights ) I don't want to go for a paid - for IVA at all again !

Sorry if this isn't very clear - I'm a bit out of my depth here !
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By Nicky
#2475 Here is a little information regarding Fast Track VA's.

If you are able to offer a lump sum to your creditors, it would make sense to go for a FTVA as if the creds agree to the settlement figure, then once the payments are distributed, it will all be done and dusted. If it fails, you lose nothing but basically end up where you are now.

A good indication of whether the FTVA will be accepted is by the OR agreeing to act as nominee. If the OR declines, it could indicate they dont feel your offer would be accepted.

FTVA is a new concept, but does accomodate for people in similar situations to yours, so it is worth looking into, especially if it means you dont have to have the implications of bankruptcy for the next 2 and a half years.

Hope this helped a bit.
ByVanessa
#2481 Hi Nicky and thanks for your help so far. If the case has been passed on to a Trustee rather than the OR does this change the position ?
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By Nicky
#2483 Are you living in England or Scotland?
ByVanessa
#2484 England
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By Nicky
#2487 I'm not sure what you mean when you say things were passed onto a trustee. It wouldn't make any difference anyway. If you are currently bankrupt, you can apply for a Fast Track VA and if accepted, your bankruptcy would be nullified.
ByVanessa
#2488 Sorry, perhaps I didn't explain very well - I was initially dealing with the OR in my local area, which was then passed on to the Regional office and then assigned to a Trustee in the private sector.
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By Nicky
#2499 Hi Vanessa

I think you will find the same still applies, so you should be fine.
ByVanessa
#2511 Nicky - thanks - your advice is great ! How would I go about making this offer ( which would obviously be through a 3rd party ) to the Trustee / OR ? If the creditors aren't actually going to benefit anyway ( the trustee / bankruptcy costs take precendence I think ? ) do I stand much of a chance with this if it is only covering the expenses ?
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By Nicky
#2512 I've just realised, in my first response I was supposed to put a link after the "here is a little info re FTVA" but forgot to put the link there doh@me :roll:

So here it is:

http://www.fcl.org.uk/fast_track_volunt ... gement.php

That should give you a bit of info which hopefully may help.