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

Moderators: TalbotWoods, JaneClack

Byhockeymom
#359073 Hi - This is my first post so pls be gentle!

After very careful consideration of all the pros and cons, I am going to declare UK bankruptcy from Canada.

But I have some questions that I haven't been able to answer:

I have secured car finance in Canada - I need the car for work as public transport is limited, will Scotiabank repossess my car anyway?

What will the official receiver in the UK ask me to provide? Bank statements, credit card statements??

If my income barely covers my expenditure, what is the Official Receiver's view?

None of it is new debt - it is debt that built up years ago that has now become totally unmanageable. Much of it was down to legal battles years ago.

Any tips would be gratefully received - I am terrified over the car and over the official receiver!
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ByTalbotWoods
#359423 Hi hockeymom

First things first, as Canada is a commonwealth country, there are facilities for a bankruptcy taken in the UK to be chased in Canada, but....

UK and Canadian Credit Reference Files are not linked, so a UK bankruptcy will not show on a Canadian CRF, so You UK bankruptcy should not affect your creditworthiness in Canada.

BUT it will depend on the level of debt, and what it is for. There are whole classes of debt that cannot be included in Bankrutpcy. You have intimated that a lot of your debts are form past legal costs, if these are civil legal costs then you are OK if they are criminal costs then they are not covered...you do need to be aware of that.

So if you have normal personal debts, rather than business, criminal, fraudulent, humongous horrific debts, then it should be straight forward.

For the OR to act on any asset you have in Canada, they would need the Canadian Courts to ratify the Bankruptcy in Canada. Now this costs the Insolvency Service a small fortune, so unless they are going after high value assets or a criminal bankruptcy, they more than likely will NOT even contemplate going this route, as costs far far outweigh any gain (especially in you have virtually no assets).....



Now a couple of things, you say you are going to do the deed from Canada rather than returning to the UK. Firstly how long have you been out of the UK, as there is a maximum time of three years from leaving in which to declare bankruptcy, and secondly are you using a reputable company to do this (unfortunately there are a number of "Rip you off" companies, who take your money and do the "midnight flit"

As for all the other questions, if you have statements, account numbers, agreements relating to the UK debts, then yes the OR would like them, and the more you help him, the more they tend to "not dig around"

Regarding the car, if you can maintain the repayments then even if the OR notified your overseas bank, and creditors ( which they probably wont do) then they will probably allow you to keep the car.

If your I&E leaves damn all spare, then the OR will not pursue, they only do this is there are high excesses.

You are probably going to have read this and though OMG!!!!, and have another load of questions, please feel free to ask away

Tim
Byhockeymom
#359433 Hi Tim

Thank you so much for your reply.

To answer your questions:
I have been here for 6 months, husband just arriving and will do the same as me.

I will work, he won't at first.

I don't have assets as such here - I have a car with no equity in it on a secured car finance loan. There is nothing in it to seize in order to sell, my concern was whether they would allow me to keep paying for it out of my expenditure?

And also, whether they would notify the Car Finance company as I notice in their small print that they say they have the right to retrieve the car if I became insolvent or bankrupt - do you think this applies to UK bankruptcy too?

My debts are about 55,000, on credit cards or loans. None new, all been around for years, just being switched from one zero balance card to another as I tried to continue paying until I could move then no longer and interest got the better of me. The debts were mostly built up from fighting my ex husband over my son and mental abuse.

I'm going to hand the keys if the house in. Not in arrears but have lost money on the house and was going to rent out but understand that they would put the interest rate up and take the rent payments anyway.

Income just covers expenditure - but that was my worry, would they stop $400 car payment but I'm paying almost nothing in rent and could move somewhere where I paid normal rent and actually be worse off.

Will be using Bankruptcy From Abroad as a company and do like them so think they are reputable.

I have every account number for everything, but not statements and don't actually want to give the credit card companies my address here - will that be a problem? Should I start to retrieve them?

Will they go through my Canadian bank statements too? Nothing in them, just shows my car for example.

My son has been at an academy/school in Canada for 3 years and I do still have some fees from this year to pay..... Can I carry on at least the moment with them?

Will they contact my landlord? My employer? My son's school?

I strongly believe I am doing the right thing. It had all snowballed and would still be here til the day I die!!

Thank you for your advice!

Hockeymom
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ByTalbotWoods
#359853 Hi

Yes you are doing the right thing, giving yourself and your kids a clean break, a fresh start and that is what bankruptcy does.

I've had a quick look at the company you mentioned and they dont appear to have any negative comments elsewhere, but they do not actually list their fees, and though I know it is me, I always feel odd if they are not listed, but a I say that's me.

No the OR DOES NOT contact your child's school, your employer but can contact your landlord (to prevent that make sure you have the proof of your tenancy and the rent is fully up to date).

They DO contact your banks, so depending on who you bank with you may have to arrange for a different bank account, one that allows uncharged bankrupts.

Yes the OR WILL go though your Canadian bank, sorry but they will not take your word that you only have $20 in there, they will want to see all the proof to make sure it isn't actually $20,000,000. So yes they will want to see what has gone in and out, this is very normal practice.

If the fees for you sons schooling are in line with national fees for schooling in Canada, the OR will permit them in his calculations, and most certainly if you son is in his final years then the OR will not change anything.

If you have the account numbers then that is the battle won, do not worry about the statements, the OR will get them and process them for you. So no you do not have to give the CC companies your address.

Just for the sake of clarity, and to put you at ease, the OR is not going to be draconian, especially as he will see most of the debts relate to you past divorce (HINT make that clear and show how you did this in Section 13 of the paperwork). To be honest as you do not have any assets as such, and damned all excessive income, then I suspect after an initial phone call with you, the OR may well quietly move you case to the 'Do Not Look At Again' pile, and that will be it. Remember the OR is NOT allowed to work at a further loss that is already there, so yes he may look at an IPA if there was sufficient excessive income, but with exchange rates, banking costs, etc, he will not move that way unless there is significant income to be had. In this case it sounds as if there isn't, so I suspect this wouldn't be looked at.

Now the car, that is the mystery item. If you have sufficient income, and there is a need for it (such as work) and assuming the car is on HP rather than bought with a loan, then the OR will not be interested in it so will allow you to keep it. However, it is down to the finance company to decide if you do or you dont. Now as I have said before if you can show a need, and the ability to keep all the repayments up, then most secured deals seem to let you keep the car. So to speak this is the only spanner in the works, as it is down to the finance company/bank.

Remember the ORs job is to find out what went wrong, and if possible get some of owed money back for the creditors, but in doing so they do not and are not allowed to leave you in danger of homelessness, in danger of losing your job, mess up children's basic education, leave you in a situation where you cannot pay basic bills ect, and leave you in further debt.

In this case the OR doesn't really know what the situation in is Canada, or what things cost, and yours seems to be an open/closed simple case. I suspect the OR may well move your case to the 'Do Not Look At Again' pile, as to look at it again will cost the OR money, and our government do not like that!

If the company has not you about them, there is a form that will need filling in, I've linked to it below, so you can see the type of information the OR will need (Form 6.28).

http://www.bis.gov.uk/assets/insolvency ... rm6-28.doc

Tim
Byhockeymom
#360443 Hey Tim.

You're awesome on info!!!

Will I need a contract from my job in Canada or will my pay stubs and bank statements showing income be sufficient? I have march, April and may and will have June by the time it happens.

It's far more relaxed here, hence no contract as such and no tenancy agreement so just trying to pre-empt what they will ask for so that I can avoid them contacting employer or landlord!

And do you think I will need to produce a statement for example to show my school fees for my son are fully paid?

I haven't done anything wrong but the whole process makes me feel like I have!

Hockeymom
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ByTalbotWoods
#360913 Hi Again

No the OR will not want to see your work contract, as the evidence form your bank statements will be enough to show him what you earn.

They normally contact the landlord if there is no agreement in place, but if you can show that rent is being paid then they may well forego doing that, purely as it would really not give any return.

If your sons school fees are paid regularly then yes he would need a statement.

Remember the Canadian system is different form the English system of doing things so yo will need to guide the OR in many instances, and yes it can be confusing for them, which is why as yours appears to be a simple case, with low/no assets, low/no income, that they are more likely to give you a quick call, and then shuffle you case file into the 'Do Not Look At Again' pile.

You are doing the right thing, and yes I know form personal experience that it can make you feel very very alien, but dot let it get to you, as one the deed is done (painless) and you have spoken with the OR (can be frustrating) and then wondered why the OR appears to be ignoring you (very very normal) it all ends........

In reality a simple process....HONEST

Tim
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