avoid bankrupcy

[andy.m]

I am going to court on the 15th of May for a Bankrupcy hearing.
I have a money coming through prior to this that should settle all my debts. Is it possible to pay the debts off when this comes through (obviously before the hearing), and thus avaid bankrupcy?

[aguise]

Hi Andy
I cant answer your question but would have thought if you can pay all of the debts there would be no need to go bankrupt. Be patient someone who knows will be along to give advice, bet6 there all earning the pennies to pay their creditors I'm one of the strange ones with weird hours of working.

All the best
Ang

[andy.m]

Many thanks Ang.

The actual debt that we are being taken to bankruptcy court was actually only £3000, now with all various costs it's closer to £5500. It is not a route we want to take as we will lose our house. I looked at a IVA but was told I would have to do a 100% IVA and that this would, in turn generate expense, so I would be paying off more than I owed.

Just some further background.

[MelanieGiles]

Hi andy m and welcome to the forum

Why are you going bankrupt if you have monies coming in to pay your debts? Presumably this is a creditors petition? Speak to the petitioning creditors solicitors to advise them of the situation and absolutely get those debts paid.

If the timings look tight, then be sure to attend Court on the day to seek an adjournment of proceedings. This is usually automatic so long as you have good evidence that funds will be forthcoming over the following 28 days.


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]

Melanie, indeed it is a creditors petition. The only problem now is that we fear other lenders, that we have no issues with at present, may get the fear and start petitioning also.

Is this the norm? Or am I over fretting. The monies we have can cover the origianl petiton, but not if others start falling into suit.

[Skippy]

Hi Andy, are you being made bankrupt by your creditors? I seem to remember reading that you can avoid BR, but you will need help from an expert on this. I hope it all works out for you.

Onwards and upwards!!!

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

[Skippy]

Oops, none of the other posts were there when I replied!

Onwards and upwards!!!

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

[andy.m]

No worries Skippy, many thanks for your help and thoughts.

[gimmewine]

If I were you, I would seek expert advice relating to all the debts, not just this one. If you have a lot of equity in the house, remortgaging may be an option, alternatively a dmp. You read a lot on here about preferring one creditor and as I am no expert I don't know how you would stand if you paid this one debt and ignored the others.

[andy.m]

But the other debts have never been an issue and are paid, essentially, on time.

This is the only creditor petitioning me. Surely if this is paid and the original apyments with the others are being adhered to nothing has changed. I am only guessing of course.

Also does anyone know why I would be quoted a 100% IVA?

[aguise]

Andy someone will correct me if I'm wrong but in an iva you would have to include all your unsecured debt and if your income allowed after bills going out £1 in the £1 return then you would be paying the IP fees on top so that is why it would be more expensive. You need to be insolvent for an iva (more going out than coming in) so if you earn enought o pay the bills an iva would not be an option. In an iva you pay back all of your disposable income for the five years that is how it is worked out, so if you have enough disposable income to pay it all back in the five years then thaat is why you were told this.
Someone please correct me if I have it wrong.
All the best

Ang

[go_4_broke]

Hi Andy

It seems odd that one creditor is annoyed enough to bankrupt you if you are paying generally. Is this a tax or other statutory debt, or possibly a trade debt ?

It is not normally the style of high street lenders to issue petitions, unless they are one of the US outfits.

It is theoretically possible to reverse yourself out of bankruptcy even if the order is made, if you have enough to pay off the petitioning creditor AND the costs AND are not insolvent generally.

However as Melanie advises you don't want to go there if at all possible and as she suggests you should seek an adjournment. If you can provide your creditor with some tangible evidence of the money coming in they should agree anyway as it would not be in their ultimate interests for you to go bust.

It seems extremely unlikley that any of your other creditors would go anywhere near petitioning you if they are being paid and still rare even if not, assuming they are regular lenders.

I cannot see any need for you to get involved with an IVA unless you can't avoid the bankruptcy (a post bankruptcy IVA is possible) or are insolvent generally, or both.

-Best

Please view my blog at www.go4broke.blogs.iva.co.uk

'6 years sticking my head into the Lion's mouth of debt !'

[andy.m]

It was a massive boo boo on my part, and even slightly embarrassing to tell (even within the anonymity of an email forum).

I changed jobs in May last year; I had £3000 outstanding on my company credit card. I kept failing to make the payments on it. They then became heavy and the ball started rolling.

They came to me first saying that I had to pay £3000 a week over 3 weeks. Something which I couldn't do. I made a counter offer of £1500 a month over 2 months, which they duly accepted. The first cheque bounced, this through no fault of my own (my bank took 2 lots of loan payments out in one month leaving insufficient funds in my account). I even have a letter from my bank to both me and my ex company admitting to the error and accepting responsibility for the bounced cheque. My ex-employer, having been explained this and sent the details, didn't care. The next thing I knew I was served an SD. Stupidly (due to death of mother) I didn't act quickly enough and I now find myself being petitioned for bankruptcy.

I am solvent to about £500 a month.

[go_4_broke]

Hi Andy

Sorry to hear about your mother passing on and well done for coughing that up !

It's a perfect example of how easy it is for things to go awry even with the best of intentions.

What a shame you couldn't get the £1500 through.

I think your best bet would be to proceed exactly as described previously by trying to get the adjournment, but you need to do the work to convince the creditor/judge of the forthcoming availability of funds given the history of the case.

If there's any doubt about getting the funds, raid your credit cards or even get a high street loan. Drastic step I know, but it seems unlikley the situation will have affected your credit record (yet) and you would probably have no problem getting the credit if needed.

Not ideal but got to be better than being bankrupted.

-Best


Please view my blog at www.go4broke.blogs.iva.co.uk

'6 years sticking my head into the Lion's mouth of debt !'

[MelanieGiles]

Hi Andy

It is a great shame that your former employers, who I am sure you gave great service to over your period of employment, have chosen to pursue such a punitive route with regard to recovering a relatively small debt.

I had misunderstood your post - you said you could afford to pay all debts, but now you say that you have other debts which could not be paid off in full but which you could continue to maintain contractual repayments. Therein lies the answer - get the former employer paid off (unfortunately now the debts will include petitioning costs, so probably be more like £5,000) and continue to make the payments on the others. Even if you do eventually have to enter into some form of insolvency process, the payment to your former employer would not be be treated as a preference.

Make a payment to them as soon as you can, and try and get the remainder paid off by the time of the Court hearing, the case against you will then be dismissed. In theory it is possible that other creditors might jump on the back of the petition and support it, but as the hearing has been advertised some time ago I imagine, I doubt anyone will come out of the woodwork at this stage.

Good luck!

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