avoid bankrupcy

[Andy2]

The bankruptcy is "only" at the petition stage, and behind the scenes the solicitors will have made sure it is watertight no doubt....they will even have sworn on oath to the fact which may make you shudder ! But they can retract the petition - again they will need to do this via the court and swear on oath again no doubt.

[MelanieGiles]

Sorry to all the other posters but I do not agree. Those costs have been incurred by the creditor in getting to the bankruptcy hearing stage, are rightly payable by you and you will probably need to pay in full to avoid an order being made. Try and do a deal before 15 May, but expect to pay the lot to avoid bankruptcy.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Storm]

I also think Melanies view is correct.

There will be legal and court costs in that figure which will be due and payable so unless you offer the full petition amount you are unlikely to be able to prevent the action.

[Andy2]

I have said the amount he needs to pay is the £5,200 with no attempt at reduction or procrastination. This is the PRE-BR amount. I would not say he has to pay the £10,000 + which is POST-BR and is indicative of the Official Receiver's charges (which would probably be a lot more than the extra £5,000 anyway). But if a BR is granted, the OR will have to look at ALL the debts and assets of the person. Just because this particular creditor has made the petition does not give them "first bite" of the cherry - they will be paid after realisation of assets. DON'T LET IT GET THIS FAR. Get confirmation that if the £5,200 is paid the petition will be withdrawn and then DO IT via CHAPS to where they ask you to pay it.

[MelanieGiles]

No - these costs are not post-bankruptcy. They are the petitioning creditors costs which they are entitled to recover. There will be additional costs post-bankruptcy - if this case gets this far. There are no Official Receiver's costs included within the petition document - this referes to Statutory Demand and Bankruptcy Petition charges only.

With regard to first bites of cherries, the petitioning creditors costs are drawn down before any repayments to creditors. You are being optimistic if you think this creditor is going to bear their own legal costs which have already been incurred.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Andy2]

Blimey Melanie, this chap is in a worst state than I thought. I did not think he would have to pay an extra £5,100 on top of the £5,200 on a debt that started at £3,000. I can see solicitors and petitioning costs adding an extra £2,000- £3,000 in the space of four months (since negotiations broke down in November) but an extra £5,000 on top of that as well. How do they justify that ?

[MelanieGiles]

Andy2

I am afraid that once lawyers get involved the costs can go sky high. A sad lesson for anyone faced with potential bankruptcy proceedings against them to act swiftly if there is any chance of settling or doing a deal. Most creditors will only resort to bankruptcy proceedings as an ultimate solution where they feel that a debtor is not co-operating with them - in this case the matter with the ex-employer seems to have got personal. There may still be some form of deal to be done, but our poster must act very quickly as the Court will have no power to exercise discretion if this gets to a hearing date.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[andy.m]

it is the full amount, due tomorrow, which we can't raise
is it worth me going into an iva to avoid bankruptcy?

[MelanieGiles]

You are rapidly running out of time with this. And you cannot do an IVA with just one creditor. Do you have any other debts? If not, and you fail to come to a settlement with the creditor, I am afraid bankruptcy is inevitable, but you could ask the Court to adjourn proceedings to give you more time to raise the money. They will only do this if you can demonstrate a real prospect of obtaining funds.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[andy.m]

Just an update and a 'thank you' for all the advice.

We went to court on the 15th - They agreed a settlement of £13,000. Which has duly been paid! How I raised this I can still never begin to understand. Savings, cutbacks and loans from family. All in all a very miserable experience. One that will take time for the wife and I a while to recover from, both emotionally and financially.

During this process of bankruptcy we lost both my mother and my mother inlaw (we buried my mother in law 2 days after I went to court and produced the funds). I am still amazed that a a debt of £2700 finally cost me £13,000. Whilst the debt and the way it was managed by myself is inexcusable, I fail to understand how something that had been going on for less than a year can cost so much. All parties were aware of the two cases of terminal cancer we were fighting during this period and no quarter was given. Whilst all is over and done with now, we have to drag ourselves out of where we are now and rebuild ourselves financially. How can courts justify the costs of making people bankrupt? It's like adding to salt to the wound, you have no money and end up going to court then end up owing even more money. If you take all the money I have paid on this I, mortgage aside, could have been completely debt free.

May I just take this opportunity to reiterate my thanks to all on here who gave me advice.

Andy

[MelanieGiles]

Andy

Whilst it is lovely to hear that you have put this matter to bed, I am so sad to learn of your personal circumstances, and can see how your attention was probably not focused on this issue for some time. Thank goodness that you have a supportive wife and family, from whom you must be taking strength during these darkest hours.

Your story serves as a warning to any other forum members who may be burying their head in the sand about their creditors. These things have a nasty habit of not going away, and in defence of the creditors they are merely attempting to use proper, legal routes to recover monies owed to them.

Sometimes these are very expensive lessons to learn, as poor Andy has recently experienced.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Skippy]

I am glad to hear that you have finally got this sorted, but I am so sorry to hear about your mother and mother in law.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[freelili]

Hi

Just wanted to say, I am really sorry for your sad loss, this must have been an incredibly hard time for you both, even without the court/bankruptcy proceedings. It will take some time but I really hope that you will be able to move on from this, its a very hard way to learn a lesson. It would seem tht owing money is no excuse for whatever else is going on in your life. I was reading on another forum how a man diagnosed with cancer was hounded to within an inch of his sanity. For any one else out there with human failings, stress, needs, bereavement or illness. The world of finance cares one for one thing, money, and have no compassion for the needs of people, whatsoever. Debt, it seems is a crime, much worse than murder. Its no wonder that so many debtors choose to end or actually attempt to end their lives.

Good luck for the future Andy and family.

LILY

fly me up to where you are beyong the distant star, I will wish upon tonight, to see you smile, only for a while, to know youre there, a breath away is not too far, to where you are.

[Adam Davies]

Hi Andy
I am pleased also that you have managed to get this sorted out and your case is a wake up call to everyone involved with debt.It,s a hard lesson to learn but you,ve done it and can move on.
Thanks for updating this forum.
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp