Advice before I have a heart attack!

[Katharine Norton]

I've been looking at my finances and it seems best that I sell my share of the house as soon as I can as I won't be able to keep up the mortgage and rent payments, even whilst working out here in Saudi. (I would still keep up my payments to all my creditors). If I sell and there is any equity, I would give it to my father towards his costs of helping me out of my situation. If I then come back to the UK in November and declare myself bankrupt rather than try for an IVA, will the OR want this money? If I have an interview with them I can put my case that I tried for as long as possible to keep up all my payments, even working abroad (which is making me ill with stress), but that in the end I couldn't keep it all going.

Thanks for any advice everyone, I know BR is drastic but realistically I don't think I would be able to keep up an IVA...

Kate x

[MelanieGiles]

If you sell any of your assets at a time when you are insolvent, and use the money to pay off any one creditor - especially a relative - this will be viewed as a preference, and the Trustee in bankruptcy is empowered to trace the money and recover it for the benefit of all creditors.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Katharine Norton]

Thanks for clarifying Melanie, So would it be okay to sell now whilst I am still carrying on paying everyone and keeping up with all my commitments?

[carlmcmullen]

HI Katharine,

If you sell the house now, retain the equity then go bankrupt in November the OR can still come after you for that money so i would suggest you avoid this.

How much equity do you have in the property ?

You could look at the possibilty of doing a full and final which basically means if you could raise, for example, £25-30k you could approach your creditors through an IVA to accept this amount as full and and final settlement of your debts.

You could of course do this yourself however it would take longer and you dont have the support of an IP.

If you were considering this and you had enought equity i would you could look to kick start this in April when you are back in the UK.

There is always a risk by approaching an IVA this way that your creditors could still ask for 5 year contributions but if your IP drafts the proposal in such way you could get away with it.

Keep possitive there is a way out[:)]

[MelanieGiles]

"but if your IP drafts the proposal in such way you could get away with it"

Carl - Could you explain what you actually mean by that comment?


Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[vickir]

Oh Carl, cant believe you said that x

[carlmcmullen]

Apologies if it was misunderstood.

If you are offering a full and final then your creditors would still expect to see a full income and expenditure breakdown and should you be able to afford to make payments in an IVA then you would be expected to do so.

You need to make demonstrate to your creditors that you are making your best endeavours to reapy as much debt as possible, but obviously if you not able to make income payments they may accept a lump sum in final settlement.

[Katharine Norton]

Thanks for the replies. My problem is that I need to sell now because I won't be able to afford the rise in mortgage rate in July. I also can't do anything until I have paid my brother back (October) as it would jepordise paying him back in full. So I have to sell, but will keep any equity separate so that it can be fought over when I get back to the UK in November!

Also, do you think that I won't get to keep my end of year bonus and repatriation money that I am due at the end of my contract if I decide to go down either route of IVA or BR? It will be around 2.5K. If not, then there doesn't seem much point in staying out here past the final payment to my brother.

If I can be a warning to anyone reading this who is feeling their finances slipping away - don't leave it until the point of no return - you make it so much more stressful on yourself. Also, your family will be much more supportive than you initially think and often they have an idea of the kind of trouble you are in...

Thanks for everyone's replies and postings of support.

Kate x

[MelanieGiles]

I can only echo my previous comments about preferring associated creditors, but if you maintain the full contractual repayments to your other creditors in the meantime this will be fine.

If you receive the bonus and repatriation money prior to bankruptcy/IVA and this is held in your bank account at the time you make your application, the money will need to be declared. In bankruptcy it most certainly will be taken from you, unless you can argue that it is needed to pay your ongoing expenses until alternative employment is sought.

How much equity is there in the property?

[Katharine Norton]

I guess that if I put these monies into my dad's account that would be looked on poorly? Am I reading Melanie's reply wrongly if it seems that if the money isn't in my bank account at the time of declaring, then it might be safe? I won't have a job when I get back, so won't have anything else to live on.

I don't think there will be any equity that could be used to pay a lump sum, I'm on a 50-50 with housing association property. I am even thinking maybe I should just default on my mortgage and rent payments - if I don't get sold by July I won't be able to make these payments anyway. Although I haven't checked what would be the position re: my tenants.

Well, thanks again everyone!

[MelanieGiles]

Hi again Katherine

I would market the property now, if you can with tenants in situ, as this will not cost you anything until it is sold. If it does then sell before you return, I would put the money into a separate savings account, paying no-one in preference, until you return to the UK and decide what you are going to do.

[snowy]

Hi Kate

Just wanted to say well done for facing up to things, it took us a while to finally unbury our heads but the relief when we did and started to realise that there were people out there that could and wanted to help us it was all a big relief. Also wanted to say I really admire you for being honest with your family. We haven't said a word to ours and have been suffering in silence for the last 12 months whilst trying to sort things out, which is why this forum has been an absolute god send! - I really admire that you were brave enough to be honest - well done! - good luck

[Katharine Norton]

Hi everyone, wanted to catch up and ask another question re: the house and selling it. My folks have told me that they are not prepared to sell it for me or afford the upfront costs (valuation and homeowners pack). Does anyone know what would be the situation with my tenants if I came home now (I would move in with my folks)? I'm pretty much done in now with all the worry of it all and am thinking about just coming home this month and letting it all collapse.
Kate x
Thanks Snowy for your lovely message - I really could just cry now except I am at work and pretending all is fine...

[MelanieGiles]

Your move back to the UK will not affect your tenants if you move back in with your parents, Katharine.

[snowy]

Hi Kate

I totally understand that one - nobody knows of the situation me and my husband are in, I usually find myself bursting into tears in my car on the way to work and then have to sit in the car park for 10 minutes while I try and sort my face out. The difficulty with my job is I actually work for someone who deals with debt recovery for the Claimants so I find it extremely difficult to even look them in the eye each day, I have on so many occasions desperately wanted to tell them everything but am too ashamed and scare of what reaction I will get. It is getting increasingly difficult to put a brave face on for everyone in an attempt to hide my true feelings. - keep smiling!