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 bankruptcy postbag for january
 better to declare myself bankrupt
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Junior Member

173 Posts

Posted - 13 January 2008 :  21:24:11  Show Profile  Reply with Quote
I have approximately £17 000 worth of debt (unsecured) and have a property related Court case in April as a result of which my debt could increase by 27 000 (£15 000 and £12 000 Court costs). I have been desperately trying to avoid bankruptcy, even though my expenditure currently exceeds my income. In the event of having to face bankruptcy, would it be better to wait until after the Court case or should I consider doing it beforehand? Also, is it better to declare myself bankrupt or to be made bankrupt by a creditor, in this case, the builders/architects involved in the Court case?

Johnny Debt
Junior Member

United Kingdom
265 Posts

Posted - 14 January 2008 :  13:12:42  Show Profile  Reply with Quote
Well if they make you Bankrupt, it will save you £480!! Having said that though, I am not sure they would take the risk, cos they might just end up with nothing.

As to when to go BR, what creditor pressure are you currently under?

You say that you have a property related court case, are you saying that you own the property?

What other assets do you have?
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Junior Member

173 Posts

Posted - 15 January 2008 :  17:27:42  Show Profile  Reply with Quote

At the moment I am simply making token monthly payments of £1 to 4 creditors, on the advice of Payplan.
3 of the 4 debts have been passed to debt collectors/solicitors who seem to be insisting on a review of my circumstances within 3 month period, when I will be expected to increase or resume payments.
Since my expenditure currently significantly exceeds my income, this will not be realistic.
I do own my own property-there is an outstanding mortgage of approx 127 000 on it with an early redemption fee of 8 000. the value of the property is approximately 135-140 000. I have been told my one bankruptcy source that I can definitely expect to lose my home. However, another source has told me that it would be very surprising if the OR was interested in my property given little equity and that OR s usually assess the relevance of property as a realisable asset, based on about 80% of the value of the house. If this should be the case, the equity wouldn't be enough to pay the mortgage off, even. Have you any further guidance on this?
Also, in relation to the timing aspect, would I have to wait for the outcome of the court case I mentioned before petitioning for bankruptcy, or could it be included amongst my debts with a "pending court case" note attached?
Another thing I am unsure of, can a creditor, in this case an architect/builder pursue their claim, once I am discharged from bankruptcy, if this is the course of action followed?

Edited by - Lnd on 17 January 2008 23:02:55
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Johnny Debt
Junior Member

United Kingdom
265 Posts

Posted - 16 January 2008 :  06:43:47  Show Profile  Reply with Quote
It is good that you are at least making an effort to make payments towards your debts - even though it is a £1. Yes it will be reviewed in the near future, but you may find that they will allow this to continue when you submit an income and expenditure in the future.

With regards to your property is it jointly owned?

The property will be passed over to a trustee to investigate further. Just looking at the figures you have produced it may be the case that they may not force a sale on the property as there is very little equity in the property. You may be able to get a relative to purchase the beneficial interest for £1 plus legals. Make sure you inform them of your intention to do this!

Make sure that the sums are correct on your property before deciding to go BR! A sale can be forced if there is a certain amount of value in the property.

Personally I would not rush into BR, I would wait and see what happens with regards to your court cases.

It looks as though you are doing the right thing so far.
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Junior Member

173 Posts

Posted - 16 January 2008 :  14:45:46  Show Profile  Reply with Quote
Thank you for that advice-I think it is probably wiser not to rush headlong into BR as you suggest but sometimes, I think the relentless stress of the situation gets overwhelming and a desperate need to allieviate the stress takes over. Understanding all the available options and the implications of each of them can also seem really confusing.
In response to your question, I am the sole mortgagee of the property and live in the house with my 18 year old daughter who is a full time student.
I have arranged for 2 estate agents to come up and give me an idea of the value of the property-would you know if these kind of valuations would suffice for the purposes of a potential BR petition, or would I need to pay for a full valuation by a surveyor?
Also-if it is the case that I had up to £5000 of equity in the house for arguments sake, after the early redemption fee and mortgage were paid, would it be likely that a third party could pay the "beneficial interest" on my behalf in order for me to keep the house? I don't know what the kind of thresholds are in terms of equity as far as the OR is concerned?
I'm still confused about the "best" time to declare myself bankrupt if this is inevitable ultimately-if I wait until the court case is resolved and I lose the case-would I still be able to do it at that point or would it be viewed as a "cynical" act by the Court and could the creditors involved be able to put a charging order on the house?
Sorry for all the questions-this thing has taken over my life and I hust need as much clarity as possible in order to know the best course of action.

One other question- in terms of an IVA-are you aware if a "guarantor" can act to guarantee a payment, even if my expenditure currently exceeds my income and I would not be eligible for the terms of an IVA myself at this time?

Thank-you once again

Edited by - Lnd on 17 January 2008 23:00:34
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Johnny Debt
Junior Member

United Kingdom
265 Posts

Posted - 23 January 2008 :  07:48:00  Show Profile  Reply with Quote
With regards to the IVA, I know nothing.

It sounds to me like you are progressing in the right direction. Personally I would wait - I get the feeling that you do have time.

If you have creditor pressure, you can offer token payments, to ease some of that pressure.
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Johnny Debt
Junior Member

United Kingdom
265 Posts

Posted - 23 January 2008 :  07:49:31  Show Profile  Reply with Quote
You might as well know what all your problems are before deciding to go BR.
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Starting Member

United Kingdom
1 Posts

Posted - 22 June 2010 :  12:19:21  Show Profile  Reply with Quote
Try to make payments towards your debts. I would not suggest bankruptcy. Do try loan modification, debt consolidation or loan re-finance.

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Average Member

511 Posts

Posted - 22 June 2010 :  12:24:41  Show Profile  Reply with Quote
stop ressurecting these old threads with your spam, grrrrrrrrr
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Junior Member

United Kingdom
112 Posts

Posted - 22 June 2010 :  13:09:40  Show Profile  Reply with Quote
Hi LND...not sure if this has already been mentioned, but ask for a valuation based on a quick sale due to relocation. That way, you will get a proper valuation that would suit you, for free!
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