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

Moderators: TalbotWoods, JaneClack

By mrsmith
#2660 Had my interview with OR yesterday.

Because I'm on a decentish salary the guy from the OR office who did my interview said that they would expect someone on my income to be able to pay an IPA. Problem is I don't have any excess income. My salary is twice that of my wifes. She is going to buy out beneficial interest with help from parents. He said that because she will own the home then she should pay the majority of the mortgage leaving me money to pay them. I disagreed that she wouldn't own the house (the mortgage and deeds remain in joint names), but agreed she would own the beneficial interest. The mortgage is slightly more than my wifes salary, and I have to pay a substantial amount to CSA. He said he was going to have to talk to his team leader about what they expect from me.

I'm quite concerend about this. We have a 10 month old baby and if they force me to pay IPO then the chances are we will lose house anyway. In effect he was saying our mortgage is more my wifes responsibility than mine because she will own the beneficial interest. As the mortgage is in joint names it is my view that I am responsible for 2 thirds of the monthly payment as my wife is on half the income which I am on - he didn't seem to agree. I had to try very hard not to lose my rag with him because I know he could make things very difficult for me.

I got the feeling he was a junior as he said something along the lines "if I go to my team leader and tell him your salary he'll want you to make a payment". Surely they must take into account the fact that the mortgage is in joint names and my salary dictates the proportion I should pay, not the fact that my wife is buying the beneficial interest?

Does anyone have any advice? Can they force me to pay IPO even though I have no spare cash when essential costs are paid? I am prepared to give them full details of my wifes income/expenditure as well as mine to show we have no 'spare' money to pay them - should I disclose my wifes details? Finally, do I have any chance to dispute if they do make an IPO, or is it totally up to them without any option to question what they decide?

Would it help if we got parents to buy the beneficial interest instead?

Can I get a solicitor to represent me if things get tricky?

Any help much appreciated.
#2661 well looks like you have dropped yourself right in it I will tell you the man to ask.......and apparantly he is not back till 03/01/2005.......Simon Wiggins on the ask the expert the man who would know .......My own belief is that there has been a coup in his office and his name has been highjacked by someone else.....i will not be back for a month and no one will remember...but your problem does not sound right......and Simon wiggins is the man......Not Mr Singh Wiggins who now has taken his place....
Can't help mate.......Simon could
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By JaneClack
#2662 Hi - there does sound to be a problem here and a junior in the office who is not looking at individual expenses. CSA has to be paid and so does a mortgage - if you were not in mortgaged accommodation you would have to rent and as Simon would say - your debt and bankruptcy is nothing to do with your wife. Basically she could use her money for anything - desgner clothes for herself and your child (although I know she isn't) - never mind paying the mortgage i.e. she should not be covering the mortgage to allow you to pay an IPA/O as that would mean she was paying for your bankruptcy by allowing you to live rent free. If she gave up her job to look after your baby there would be no spare money at all, would there? Even with some savings on child care... She is working to allow you to stay in the house - think on and good luck. Simon will be back on 4th and little can be done between now and then anyway so sit tight and work out your figures.
By mrsmith
#2667 Yeah, it did seem strange to me that he wanted IPA even though I've no spare cash after mortgage and essential costs.

Got the feeling he was after his pound of flesh because I admitted a lot of my debt was on non essential items (but at the time I did intend to repay all) - and they were incurred before April this year (i.e. before the new rules).

If I refuse IPA and have them go to court for IPO do court assess my exepnditure/income and presumably take into account mortgage?

Parents have said they may prefer to buy beneficial interest than lend wife money because they want their invetment safeguarding should OR make things worse for us. If that was the case, surely OR couldn't expect them (parents) to contribute to mortgage, and also I presume wouldn't expect my wife to pay more?
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By JaneClack
#2669 You could go for that option i.e your parents buying out the beneficial interest but remember what I said about it being your debt. It might be better as it would not look as if your wife were in a position to raise this money? Are you in a position where your mortgage could be regarded as ridiculously high for your income which I do not think is the case. If the house were sold - we are looking at this hypothetically remember - the OR would get 50% of the monies left and then you would have to rent and then if you and your wife split up you would have to pay all your rent and household expenses plus another lot of CSA. Can you see what I am driving at here? - your wife is NOT responsible for your debt. She is helping by paying part of the household bills but as I said before if she had no job she couldn't help at all. I cannot second guess the OR here but you have the facts and you must present them. Simon will be back on the 4th and will be able to give you chapter and verse so do post a question on Ask the Expert - he deserves his break but as I said before I cannot see this going any further before then anyway. Keep strong about this.
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By JaneClack
#2697 Just one more thing - the OR usually wants 50 to 60% of any surplus income for an IPA (better to get it agreed than they go for an IPO which can be enforced through the courts) but this would only be for three years during which any change in circumstances would be taken into account - and you would have a duty to let him know within 21 days. So this would be less than you would have to pay out in an IVA - (never mind compensating the creditors for the beneficial interest too). In an IVA the wife's income has to be disclosed which it doesn't in bankruptcy as I have said but the important thing to realise is that she should not be expected to pay the whole of the mortgage. She couldn't anyway but I do not want you to feel that any IPA would be set in stone and is still a cheaper option than anything else. Just emphasise the fact that you do need to pay the majority of the mortgage. If I were your wife I'd be tempted to stay at home to look after the baby! But she doesn't have to - keep the bottom line in mind - it is your bankruptcy not hers. Good luck.