Not sure what the best course of action is

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Post by gaminggossip » Thu Jun 28, 2007 3:30 pm
I was made redundant in March 2006 and have struggled to find work ever since - in the process racking up about £20,000 in credit card debt on top of a £10,000 personal loan I already had - a total of £30,000 of debts. I don't own a house, have no assets and the banks are currently ringing on a daily basis to ask how I am going to pay them. I have the possibility of taking a job abroad in August but the salary for that will only just about cover my priority debts (rent, bills, living expenses and child maintenance).

Not sure what the best course of action is - should I tell banks I hope to take a job in August? Should I try and take out an IVA or should I go bankrupt? If bankruptcy is the best option, how do I do it? Sorry for all the questions - hope you can help!


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Post by Oliver » Thu Jun 28, 2007 3:40 pm
On the face of it with no assets Bankruptcy immediately stands out as a viable option. There are obviously serious implications from going bankrupt such as a negative effect on your credit file and a certain amount of publicity involved, but the benefits will be that your financial problems will be taken care of by the courts (although you may have to make a contribution to your creditors for three years if you are earning). You will need to make an appointment at your local court and also pick up the application forms as well as paying an application fee of c£500.

You will not be able to propose an IVA without a job.

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Post by iva experts » Thu Jun 28, 2007 4:41 pm
Welcome to the Forum Gaminggossip,

Thomas Charles is correct, you will not be able to propose an IVA to your creditors if you do not have employment.

Dont be sorry for asking questions, as i said to another forum member today ask as many questions as you like. This is what the forum was created for.

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Post by Skippy » Thu Jun 28, 2007 5:43 pm
If you do opt for BR, you will need to contact your local court to find out whether you can just attend or whether you need to make an appointment. You can complete the forms online ( and print them off just before you go to court. Don't sign them as this is done at the court. The fees for BR are £485, but if you are unemployed you are entitled to a reduction of £150. You will be asked by the judge if you have taken professional advice regarding BR so I would recommend speaking to the CAB or the CCCS as if you cannot answer yes, the s/he can reject your BR petition.

I petitioned for BR 3 months ago, and it's not as bad as everyone thinks. I have posted as much info as I can in my blog.

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Post by iva_squirrel » Thu Jun 28, 2007 11:22 pm
Good evening,

I agree with Oliver that on the face of it with no assets Bankruptcy immediately stands out as a viable option. For someone in your position, Bankruptcy is not as bad as it sounds.

• The responsibility for paying your debts will be away from you

• You will normally be Bankrupt for just 12 months. After that period you will be discharged.

• If you can afford to do so, you will have to make monthly payments towards your debt for 3 years. However, after these payments are completed, any outstanding debt will be written off by law.

• If you declare bankruptcy, you will be allowed to keep reasonable household items. You will not have to give up reasonable goods such as your washing machine, fridge freezer television and DVD player.

However, as discussed, you should be mindful of the following:

• If you are declared bankrupt, your name and address will be published once in the local newspaper and the London Gazette

• The record of your bankruptcy remains on your credit file for 6 years meaning it will be difficult to obtain further credit during this time. In reality many people are able to borrow again within this period, particularly for a mortgage.

• You will have to give up your share of any equity you have in a property. This may result in the sale of the property unless a friend or family member can raise a similar sum on your behalf which can be given to the Court in lieu of your equity.

• You may have to trade in a car worth more than £1500

• You will be unable to act as a company director or be involved with the management of a limited company while you are bankrupt


In order to declare your self bankrupt, you will need to pay Court Fees. These normally total a one off charge of between £460-£490. However, you may be eligible for a reduction of you currently claim certain benefits.


If you decided to proceed with bankruptcy, you should take the following steps:

1. Identify the local County Court and Tel Number
To declare bankruptcy, you will have to attend the County Court local to where you live. You can find out where this is through the local telephone book, directory enquiries or by searching on the Court Finder web site:

2. Contact Court and Request Bankruptcy Application Form
Telephone the local County Court and ask them to post you an application form. The Court will do this free of charge. At the same time, confirm the charge with the Court (normally £460/person) and whether you need to make an appointment or whether you can just turn up at the Court at any time.

3. Complete the Bankruptcy Petition Document & Bankruptcy Application Form
Bankruptcy application forms are c30 pages in length. They need to be completed fully and correctly. This will normally take between 1-2 hours. Make a photocopy of the completed forms for future reference.

Note: The Court is unable to give advice on completing your Bankruptcy application forms. If you require additional advice and help to do this, Thomas Charles can help. You will be charged a fee of £200 for this service.

4. Present Completed Application Form at Court
Once your forms are completed, you must take the forms together with your fee in person to the Court. Once at court the following process will happen:

• A Clerk of the Court will take the fee, ensure that the application forms are correctly completed and witness your signature on the Petition Document.
• You will meet with a District Judge (private room). The Judge will ensure that you are eligible for Bankruptcy (i.e. insolvent) and will determine whether bankruptcy is appropriate. If the Judge agrees with the Petition, they will declare you bankrupt the same day.
• You will be asked to make an appointment with the Official Receiver. Depending on the Court, this may be on the same day or a different future date.

5. Meeting The Official Receiver (OR)
The Official Receiver (OR) (or Trustee in Bankruptcy) is responsible for deciding decide on a number of things:

• How long your bankruptcy will last. This will normally be 12 months although the OR has discretion to shorten or lengthen this.
• If you can afford to make a monthly payment towards your debt and if so how much (known as an Income Payment Order which will normally last 36 months)
• If you have any assets or property, how these will be treated. I.e. if and when they will be sold to realise the asset value for the creditors

I hope you find this information useful.

Kind regards,

Julia Simavi

Shortlisted with special commendation for Debt Counsellor of the Year by Credit Today Awards 2007

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Credit Today Awards 2007


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Post by lily » Thu Jun 28, 2007 11:46 pm

Just wanted to say, now that you know that your options involve insolvency proceedures do not use your cards anymore, dont pay your creditors, the phone calls are a problem but firmly and politely tell them you cannot make a payment at this time.

I really wish you the best of luck.



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Post by gaminggossip » Fri Jun 29, 2007 10:34 am
Thanks for all the advice!

I stopped using all my credit cards in March and have no assets (not even a car) over £1500 in value. I live in rented property to equity is not a problem.

I'm looking to move abroad in August. Do you think it would be better to apply for bankruptcy now before I move (not sure how long the process takes) or can I apply once I am over there? Equally, would it be better to hold off my creditors until I am over there and then try to arrange a payment plan.

I anticipate, however, that my new job will only just cover the priority debts and I will not be able to offer them a large amount each month...


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Post by lily » Fri Jun 29, 2007 1:21 pm
I am not an expert but as you no assets to protect going BR ASAP would end this nightmare for you. You can then rebuild your life. If your new job does not include enough disposible income for IVA (which would last 5 years) Then you could be repaying the debts on a DMP for a very long time, plus there is no obligation for the creditors to freeze interest. If you read skippy, scaredkez, coco's blogg you will see what the process is like and what it all involves. Good luck to you.


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Post by monday s expert » Fri Jun 29, 2007 1:27 pm
How far abroad? - your case has similarities to my own - in that I am trying to struggle thru an IVA - when in reality - I should have declared bankrupt and then flew back to Australia and started again...

Now I am in the proceess of trying to offer my creditors,via my IP a deal to end my IVA early (with money from relatives in Australia)
so when our baby arrives we won't be struggling and "they " say that they creditors won't take less than 25p in the pound. 20p would probaly be what we could get together but they seem to think that the Eversheds/Max recovery won't take it...???

So "sod them" I will pay what I can for the next few months and enjoy the summer,spend the cash on a ticket to Brisbane - might even have a holiday in Thailand or Bali on the way!

AND They can worry abourt the 20p in the pound they could have had - they can't imprison me, can they, as the jails are full - and they are letting people out today!!

Monday's Expert
- everyones an expert on Monday after the games been played or the race has run
Last edited by monday s expert on Fri Jun 29, 2007 2:04 pm, edited 1 time in total.
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