Bankruptcy

[Elizajo]

I think Bankruptcy may be the better option for me that an IVA but want to know what others think. I have no assets and live in rented accommodation with my husband. All my debts are in my own name. I owe 9,000 on credit cards and have two loans amounting to 30,000 - my circumstances have changed so dramatically in the last three years and I now only earn 211 pounds per week. I have been robbing Peter to pay Paul and I think I have 4 weeks left before it all goes badly wrong. I have looked into an IVA, however, I have no property, no assets worth more than 500 pounds and wanted to know exactly what will happen to me during Bankruptcy? What happens during the first year? What happens after? After 5 years is your credit record clear again? Will I be able to get a mortgage in the future? Many thanks

[phill]

hi elizajo i'm in a similiar situation and i'm being constantly told that an iva is the better option but i'm not sure as i know i'll still have to make repayments but apparently they are less in bankruptcy and you might only have to repay them for 3years so it makes bankruptcy look more attractive to me? i just dont know?

[MelanieGiles]

Hi Elizajo and welcome to the forum

Do be sure to take more specific advice before you make your final decision. Most insolvency practitioners offer a free consultation service, and you ought to go through your finances carefully with a professional before applying for bankruptcy.

As you have no assets of material value, and a seemingly low income, it appears that bankruptcy proceedings are unlikely to affect you greatly. You may be required to make ongoing payments based upon your surplus income for the next three years, but this will only be effected in the event that you have a surplus of income once your usual household bills and expenses are taken into account.

You will be subject to all bankruptcy restrictions for up to a year following the making of the bankruptcy order - the main thing likely to affect you is that you will be unable to take on any credit in excess of £500 (I imagine that will be the last thing on your mind!).

After the first year, which is sometimes shortened at the discretion of the Official Receiver, you will receive your discharge from bankrupty. At any time after this you will be eligible to seek a mortgage, although you will undoubtedly have to pay a higher interest rate as you will be viewed as a financial risk until your credit rating is restored.

The following website will probably help to answer most of your questions about bankruptcy, but do post any further ones on the site and I will try and help.

http://www.insolvency.gov.uk/


Good luck

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Elizajo]

Hello, thank you so much for your replies....

Phil - I feel the same as you, Bankruptcy feels more right for me in my current situation than an IVA but it sounds and feels so scary too - arrggh!!! I really don't want to take out an IVA then feel I have made a wrong decision, however, I suppose once I have started an IVA I could go Bankrupt anyway, but this might look much worse?? Also since posting I have found out that I have a loan jointly with my husband, I didnt realise as I have never paid it, he put me on it to gain more money at the time. He has no problem paying it - if I went bankrupt would this affect him because of that? Can they send people round and take any things we have ie TVS, furniture? As I said before we have nothing of any value really ,........

Melanie thank you for your advice. After reading your post I am really wondering if Bankruptcy will affect me that much at all.....I am not going to do anything hastily but I really don't feel I have that much to lose....maybe I am wrong?!!!

Is there anyone out there who is or has been made bankrupt and doesnt mind sharing their experience?? How bad does it get? Im so scared and want to make the right decision.

I'm so upset with myself for the situation I am in but it just snowballed and makes me feel sick everyday [:(]

[DebtDummy]

Elizajo, please seek professional assistance regarding bankruptcy. It is a very serious course of action to take. Get a free consultation as suggested by Melanie.
Think of a BR as a course of last resort because that is what it is. Seek advice and be very very sure. Don't rush into it. Make sure you have done ALL you can to pay back your creditors through other means.

I made my BR appointment today with my local county courthouse. I may be able to answer some of your questions regarding it. Post your questions in the bankruptcy section of this forum. Also, James Fellas,an IP professional here is familiar with BR. He may assist you as well.

Remember, a BR is the LAST resort.

Good luck!

All I have left is my humour.