bankruptcy question
Discussion
Hi
Please dont flame me, but after going down several avenues I now believe I need to look into bankruptcy. I got myself into this situation via my ex gf, I should have said no to giving her second names on credit cards and she has now defaulted on a loan that I was guarantor for. I have nothing on paper showing that the majority of the debt in my name is actually hers and she did a runner at the end of 2008. I have tried and been rejected for an IVA and a DMP would take until I am late 60's to clear the debt as not everyone will freeze the interest. I have looked into re-mortgaging the flat but due to the late payments on un-secured debt I can not do this and I have tried selling to free up the cash in the flat but since the leasehold is less than 50 years no one will touch it.
So.. if/when I go bankrupt I know that I will loose all assets that have value, ad accept that it has to happen to pay my creditors.
What happens next ? I have been told that there my be a charge put against my wages, I was wondering how much this would be. based on a take home of £2000 any idea how much they would take from that. Also do my employers need to know ? I work in IT so it is not one of the jobs that being bankrupt would prevent me from doing.
Also if I have nothing to loose I (as I would have already lost it) would I be permitted to go contracting under the rules relating to bankruptcy ?
cheers
Ed
Please dont flame me, but after going down several avenues I now believe I need to look into bankruptcy. I got myself into this situation via my ex gf, I should have said no to giving her second names on credit cards and she has now defaulted on a loan that I was guarantor for. I have nothing on paper showing that the majority of the debt in my name is actually hers and she did a runner at the end of 2008. I have tried and been rejected for an IVA and a DMP would take until I am late 60's to clear the debt as not everyone will freeze the interest. I have looked into re-mortgaging the flat but due to the late payments on un-secured debt I can not do this and I have tried selling to free up the cash in the flat but since the leasehold is less than 50 years no one will touch it.
So.. if/when I go bankrupt I know that I will loose all assets that have value, ad accept that it has to happen to pay my creditors.
What happens next ? I have been told that there my be a charge put against my wages, I was wondering how much this would be. based on a take home of £2000 any idea how much they would take from that. Also do my employers need to know ? I work in IT so it is not one of the jobs that being bankrupt would prevent me from doing.
Also if I have nothing to loose I (as I would have already lost it) would I be permitted to go contracting under the rules relating to bankruptcy ?
cheers
Ed
As Eric says, you cannot be a Director, but only until discharge which will most likely be <12 months.
The Official Reveiver will determine if you have anyhting to pay (an IPO) by working out your neccessary monthly costs (food,rent, home bills, car costs, etc, etc) and then will take a share of your surplus income. On this basis it is impossible to say how much of your £2000 would be taken as it depends on your living costs.
Another point is the OR will not look to take household assets etc (TVs computers etc) unless they have significant value, and you may also be allowed to keep a modest car (£2K or so) if it is required for work. If you have little equity in your property it may even be possible to keep this.
Just out of interest, why can't you do an IVA? I would have though with a net income of £2000 it could be worked out?
The Official Reveiver will determine if you have anyhting to pay (an IPO) by working out your neccessary monthly costs (food,rent, home bills, car costs, etc, etc) and then will take a share of your surplus income. On this basis it is impossible to say how much of your £2000 would be taken as it depends on your living costs.
Another point is the OR will not look to take household assets etc (TVs computers etc) unless they have significant value, and you may also be allowed to keep a modest car (£2K or so) if it is required for work. If you have little equity in your property it may even be possible to keep this.
Just out of interest, why can't you do an IVA? I would have though with a net income of £2000 it could be worked out?
Have a look at this website www.debtquestions.co.uk it also has a forum that should be able to answer all of your questions.
Hi
Thankyour for all the advice, spent a fair bit of time down at the CAB today going over things. Its quite amazing how much better the impartial advice is. I had been told that every avenue had been blocked by a well known DMP/IVA company I had contacted for help. they have now been told where to go and the CAB are going to help get plans in place, they are going to put me in contact with a debt charity so maybe I can get out of this situation without loosing everything and paying the debts off in full.
cheers
Ed
Thankyour for all the advice, spent a fair bit of time down at the CAB today going over things. Its quite amazing how much better the impartial advice is. I had been told that every avenue had been blocked by a well known DMP/IVA company I had contacted for help. they have now been told where to go and the CAB are going to help get plans in place, they are going to put me in contact with a debt charity so maybe I can get out of this situation without loosing everything and paying the debts off in full.
cheers
Ed
When you say "rejected" for an IVA, did you actually prepare and issue proposals that your creditors rejected or was it that the advisor said that it was not appropriate for you?
If creditors rejected proposals then bankruptcy is often the best course of action. As already said the bankruptcy itself is unlikely to exceed a year and any contribution you have to make will be for 3 years rather than 5 years for an IVA. The creditors will get less return but they have effectively chosen that by rejecting the proposals.
If you have not already proposed an IVA then there is nothing stopping you from doing so. Your advisor (see below) should check what is a realistic level of contribution based on your income/ outgoings. An IVA will usually need to account for any equity you have in property. If there is equity that cannot be released then simple IVAs often have a term extending the duration of income contribution from 5 years to 6 years with the equity remaining in the property.
Ignoring DMP's and depending on your assets/ liabilities there is a third option, a Debt Relief Order. This is like a streamlined bankruptcy but is only available if you have assets of less than £300, liabilities of less than £15,000 and income after outgoings of less than £50.
I assume that the debt charity is CCCS. While they are a charity, they are also a commercial organisation and part of their income is derived from IVAs. Your IVA is likely to be what is termed a "protocol" IVA. The costs associated with this are standardised and you should not be asked to make any payment specifically towards the costs. All costs should be drawn from the IVA on the basis set out in the IVA and approved by creditors.
If creditors rejected proposals then bankruptcy is often the best course of action. As already said the bankruptcy itself is unlikely to exceed a year and any contribution you have to make will be for 3 years rather than 5 years for an IVA. The creditors will get less return but they have effectively chosen that by rejecting the proposals.
If you have not already proposed an IVA then there is nothing stopping you from doing so. Your advisor (see below) should check what is a realistic level of contribution based on your income/ outgoings. An IVA will usually need to account for any equity you have in property. If there is equity that cannot be released then simple IVAs often have a term extending the duration of income contribution from 5 years to 6 years with the equity remaining in the property.
Ignoring DMP's and depending on your assets/ liabilities there is a third option, a Debt Relief Order. This is like a streamlined bankruptcy but is only available if you have assets of less than £300, liabilities of less than £15,000 and income after outgoings of less than £50.
I assume that the debt charity is CCCS. While they are a charity, they are also a commercial organisation and part of their income is derived from IVAs. Your IVA is likely to be what is termed a "protocol" IVA. The costs associated with this are standardised and you should not be asked to make any payment specifically towards the costs. All costs should be drawn from the IVA on the basis set out in the IVA and approved by creditors.
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