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| T O P I C R E V I E W |
| johnandmel |
Posted - 16 November 2009 : 01:21:41
hi everyone
my wife and I are both looking at bankruptcy and are both stressing out about it. We owe about £82000
I will begin by how we got in this mess
We bought ourselves a 3 bedroom massionette about 7 years ago. We took out a 100% mortgage with The Bank Of Scotland paying £550 a month.
My wife and I got married just over 5 years ago. We took out a loan with northern rock for £25000. This was to cover the wedding and any debts on our credit cards.
We could afford everything because i done regular overtime and could bring home an extra £170 a week due to this. However we had a lifestyle of luxeries - regular takeaways, both smoking and spending a lot on credit cards and the debt soon built up.
Our fixed rate ended on our mortgage deal and we went to good 'ol northern rock who offered us a together mortgage with a secured ammount of £95000 and unsecured £25000 our mortgage payments increased to £768. We used the excess ammount to pay off the 1st northern rock loan and the credit cards.
We were still a bit short so I took out another loan of £10000 again with northern rock and paid everything off
Overtime at my work got less and less and we were struggling really bad.
Things came to a head last year. We were just in an endless rut and spoke to my wifes parents who kindly took out a loan of £25000 loan secured on their house on the condition that we paid them the £263 payment each month.
Things looked good. We had our second child in may this year and took 6 month mortgage payment holiday.
Once the payments started up again in September, I reliased we were in trouble and this is where we are today.
I have looked at dept management plans and IVAs but feel bankruptcy is the only option.
Please dont judge us as we both feel what a waste of money as we have nothing to show for the huge ammount of debt we have occured.
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| 7 L A T E S T R E P L I E S (Newest First) |
| chester2005 |
Posted - 17 November 2009 : 12:13:28
as you are not considering an IVA have you considered giving Paul Johns and his team at Revivauk a call, sometimes having the opportunity to discuss your whole case in detail with an expert can put your mind at rest and stop stressing. www.revivauk.com
initial advice is free and normally very helpful.
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurman)
RevivaUK helped me through it all i can't recommend them enough!! |
| johnandmel |
Posted - 17 November 2009 : 11:47:32
We are still looking at going down the bankruptcy route.
I spoke to somebody at the insolvetary helpline and they said even though no formal contract was drawn up between ourselves and my inlaws, if we could prove we have paid them a regular ammount each month then they are included in the bankruptcy and therefore will recieve a set ammount.
Also my brother in law has very kindly offered to pay any shortful in the ammount my inlaws recieve for the duration of the bankruptcy.
This was a great relief but I am now stressed out again lol.
We are still unsure whether to open a coop cashminder account before we go bankrupt. we just dont have the option of paying for the bankruptcy court fees without borrowing more from my overdraft. So we were going to open the cashminder account and then have wages paid in there and use the money for the court fees. We are just worried that when we go bankrupt the OR might freeze that account and as i get paid weekly what will happen to my wages?
Also what is this nil tax code? |
| Reviva UK |
Posted - 16 November 2009 : 20:53:32
Hi
you are clearly going through a difficult and stressful time and hopefully you will get some answers and help from the forum.
As Mel has said if you were to petition for bankruptcy this will clear your responsibility for ALL of your unsecured debts - this includes the money borrowed from family secured on their house.
That loan is actually their mortgage and they have let you borrow the £25k from them.
If you decide that you would like to stay in the house then you must be in a position to repay the mortgage on the house. The unsecured ( together part of the mortgage ) from Northern Rock is not secured and would be cleared in bankruptcy.
In essence you would be swapping your assets for your unsecured liabilities - with the proviso that you are likely to make a contribution towards your creditors through an Income Payment Agreement for 3 years.
Potentially is you have sufficient disposable income you might be able to consider an IVA where your family would actually be creditors claiming in the IVA. This may infact be for 6 years rather than 5 because of the Northern Rock debt.
It is not worth looking at the IVA.co.uk website as you will clearly see that the company that Melanie works for is extremely highly regarded by all their clients. If you want to explore the IVA speak directly to her and she will tell you if it is viable or not.
if after speaking to her you decide that you can;t or it is not right for you then the forum will help you further.
let us know what you are doing
Paul Johns
Bankruptcy Specialists
Reviva UK
www.revivauk.com
Real People ..... Real Debt Solutions |
| johnandmel |
Posted - 16 November 2009 : 12:14:35
we have spoken to the national debthelpline and they said the inlaws will have to be named in the bankruptcy due to them being a creditor who we make payments to.
We need a definately 100% accurate answer on this.
we had our house valued today and we were told that it is worth a max of £90 000 so we are left in negative equity even with the unsecured ammount of the mortgage written off.
Does this mean we can definately stay in our house yet actually save on our mortgage due to only paying the secured ammount each month due to the unsecured part being writ off.
Also another question, do we stop paying our creditors now even though their payments are being made from another creditor - our overdraft and thus we cant use the money we would be saving to pay for court fees. If we do stop paying our creditors, how do we go about this - do we cancel direct debits, do we phone creditors up etc. |
| Melanie.n |
Posted - 16 November 2009 : 08:17:04
Your area of difficulty is the loan your parents took out on your behalf - even if you petition for bankruptcy, your parents loan is in their name and as such cannot be included in the bankrtupcy, nor will your 'disposible income' take into account your payment to your parents - You are technically unable to repay the loan to your parents as in law you would be preferring thier debt over the other creditors.
As you have a disposible income available i strongly sugget you talk to an insolvency practitioner,(see www.iva.com for a list of insolvency practitioners and read the reviews and select from there) or one of the experts here on the site, I would be only too happy to review your whole financial situation with you and provide you with all the options available to you. It is important you do this BEFORE making a decision
Melanie Nicholas
28 years insolvency experience - 23 of which in the Insolvency Service
- Insolvency Manager
Jones Giles
email me at melanienicholas@jonesgiles.co.uk
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| chester2005 |
Posted - 16 November 2009 : 01:54:52
answers in order
1
the % the OR takes is on a sliding school £450 DI will be 70% i think
2
no problem unless you have large flat screen TVs etc it sounds like household furniture etc no worries
3
yes you can but the OR may not like it, he may prefer you save the money fropm elsewhere ie.. stop paying CCs and loans
4
as long as you have taken advice ie forum experts (link on left of page) or CAB and you are insolvent ie. you cannot pay your debts , you should be accepted
5
any time before BR COOP cashminder accounts are the best very BR friendly do not declare them on the SOA just advise the OR in interview that you have opened new accounts
6
forms, court, OR interview normally over the phone 10 mins to 1 hr average,wait 12 months discharged
7
yes they might, if you havn't got them the OR can get them from the banks etc no worries
8
all creditors should recieve a pro rata share of any money paid into an IPA for 36 months
9
inform the OR and the IPA figures get re-evaluated
10
phones are ok but internet etc a bit tricky gym membership very unlikely list them as a creditor for the remaining payments due
i would suggest you contct an expert for more detailed advice and a plan of action, timing can make all the difference honestly
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurman)
RevivaUK helped me through it all i can't recommend them enough!! |
| johnandmel |
Posted - 16 November 2009 : 01:22:51
our debts are shown below
Mortgage Unsecured £25000
Northern rock loan £10000
Credit cards £14000
Parents loan £25000
overdraft £8000
Total £82000
We have NEVER missed a mortgage payment
We have NEVER missed a minimum payment on credit cards due to insufficient funds ( we have missed some payments due to late payment fees because we forgot when they were due.
Listed below are some things which are stressing my wife and I
I have done an income/expendidure sheet and we are losing about £500 a month. If everything is wiped off via bankruptcy then we have got a disposable income of about £450.
From what i have read a maximum of 70% will be made available to my creditors which relates to £315. As my wifes parents are owed 30% of the outstanding debt, they will recieve about £95. If we use our remaining disposable income of £135 then this will leave us £33 a month short which they cant make up and thus could lose their home.
Secondly throughout this year we have bought some expensive items and i dont want to be seen as buying them knowing we had no intention of paying the money back as we did and it wasnt until last week we realised what a mess we were in.
These include
Christmas presents - spent £200 just 3 weeks ago
washing machine £350 - old one broke
Fridge £180 about a month ago- old one not big enough
Bedroom furniture £1000 - old ones falling apart i.e. drawers collapsing, backs falling off.
Below is a list of questions I need to know the answer to
1. How does the OR decide upon what percentage of your disposable income to be made available
2. What effect will the expensive items bought recently have on judges decision? what will become of items?
3. Can we pay for court fees by withdrawing cash from our overdrafts which we already owe money on or will we have to find another way.
4.Are we likely to be accepted for bankruptcy as we have never missed a payment and have a largish poportion of disposable income available. Also we have not gone down the IVA and debt management route
5. at what stage do we apply for new bank accounts
6. what actually happens during the bankruptcy case as i have read that they last 2 hours - wife is dreading this as she feels she will be grilled
7. do they go through bank statements and credit card statements. do we have to provide these at the case and if so how many months/years
8. will my inlaws be shown as not a priority creditor thus recieving less of disposable income
9. what happens if our circumstances change i.e. tax credits go down, loss of job, increase in council tax/water rates.
10. I have read that you cannot include gym fees, internet, mobile and smoking in your expenditure. Is this true? I am tied into a gym membership which expies in April 2010 and i will then recieve £100 cash back.
This is all i can think of questionwise at the minute |
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