Has anyone ever gone bankrupt? Do you have any advice?

[bytheMoonlight]

Looks like we are heading down this road and we will lose our house.

Wondered mif anyone had been through this process and had any advice.

Was it complicated?
Did you find it difficult to find accomodation if you lost your house?
Did you find things returned to normal when you were discharged?

Any other advice, experience etc would be gratefully recieved

It will be dh going bankrupt not both of us

bumping for evening crowd

Oh dear, doesn't sound too good then. That was a fast prognosis though! Who did DP see at the CAB? Was it a volunteer or a debt expert?

Finding accommodation is do-able but quite a bit of work (very much worth it though). And things can return to some semblance of normal post BR/house loss except without the stress! (well and without any credit at all so life can be a bit lean but still enjoyable)

One of the best bits of advice that I was given was that once you know 100% that the house is definitely not being kept, then don't pay another penny to your mortgage company, they won't look at you more favourably for doing so! Same for you credit cards and loans. Save save save all you can for your 'new life' and for your rental deposit/ or if you are really lucky 6 months rental in advance.

If you are going down the BR route it is entirely possible that you will be able to stay in your existing property while the OR (official receiver) decides what to do with it. This could be for some time, and although you may want to move on, it gives you a good chance to save for your deposit. Remember to save the deposit in your name as cash is of interest to the OR!

The rules with regard to making yourself intentionally homeless have changed, your lender may tell you that by not paying them you could be deemed to have made yourself intentionally homeless...this is not the case. (shelter will help you put your mind at rest with not paying and saving for a rental deposit).

Don't fret that the OR is going to come and take your dishwasher and TV away...they are very busy people and will have much bigger fish to fry! Unless you have extremely expensive jewellery or portraits and antiques then they are not really interested.

If you can see a CAB debt expert they will walk you through the whole process, you may have to wait a while to see them but they are worth taking the time off work to see.

Remember that the really nasty letters come from the companies that legally cannot do much to get you money...they do it because it is all they can do! Don't let them harass you. Make sure you use your answering machine to call screen, they tend to call in the evening. Just ignore them if you are not in the mood for them. If you tell them that you are going BR they are meant by law to back off.

Find out if you can get a Housing Benefit top up. Find out how many bedrooms you would be entitled to. Then go to the website below and put in a post code of the area that you will probably live, it will tell you how much rent your local authority would be expecting you to pay. Then go to entitled too.com and find out how much you would get.

Go onto right move and start looking a rentals. Get an idea of how much you will need to pay and start looking at areas (its good to have something to look forward too). Don't get you heart set on a specific property though. Remember what is mean for you , won't pass you by!

Triple check every bit of information that you are given. The amount of incorrect information that I was given was scary, and from 'experts'. The CAB debt women was the ONLY person who 100% correct with her facts! So go with your gut because you will be patronised at times and people will assume that you do not know what is best for your situation.

I won't lie, it will be shit at times, but it won't last forever.

Sorry rather long but its all still at the front of my mind.

lha-direct.voa.gov.uk/Secure/LHARateSearch.aspx?SearchType=PostCode

www.turn2us.entitledto.co.uk/entitlementcalculator.aspx

Thanks for writing such a comprehensive post livingbytheriver, its much appreciated

dh hasn't seen CAB yet. We are being sent through a pack from them which we have to fill in, return and then we will get an appointment from a CAB debt expert.

I phoned the debt helpline and went through the inns and outs of our finances and she said an IVA wasn't an option due to the fact dh is actually insolvent - so bankrupty is the only option.

We are resigned to losing the house but in some ways it feels like this will be a big weight lifted from around our shoulders. Although can;t help feeling guilty that we are letting dd down by not giving her an inheritance and a stable place to live.

The woman at the debt helpline said we should keep paying the mortgage. I'm not sure if this is because its only dh going bankrupt and the house is in both our names.
Who was it that told you to stop paying? I'm hoping the CAB debt expert will tell us to stop as every month we save is one more month that could go towards saving a months rent in our new place. Did you have to put don a higher deposit on your rented accomodation?

I think we earn too much to get Housing benefit. The lady from the debt helpline said to go on the social housing list but I'm not holding out any hope of that!

Thanks again for your help Livingbytheriver

That's ok...very difficult not to write too much as there is quite a bit to it IYSWIM.

CAB sounds positive...seem to remember the lady visited, took down loads of info from us and then returned a week or so later with a definite prognosis, at that point she told us to stop paying. I guess no one will be able to tell you to stop until they know for sure that the house cannot be saved IYSWIM (plus most of the financial help lines seem to have quite strict guidelines as to what they can and cannot say).

Ha ha to social housing though...its about a 10 year wait here! We just needed a standard deposit, I would have ideally gone with 6 months rent up front plus deposit but we had redundancy thrown into the mix too so it was a no go. Landlord was happy with a guarantor on top of the deposit though so that is another option to consider.

Tenancy agreements tend to mention bankruptcy, but in reality if you are moved in and paying when the BR goes through a landlord is unlikely to kick you out (after all, if you have no debt left you only have the rent to worry about). If you rent from a professional landlord they won't be fazed. (always ask about the landlord when you call up, you are quite within your rights to do this, you want a long term let from a decent professional who isn't mortgaged up to the hilt and about to have the property repossessed. You also don't want to rent form a family that might want their property back when they have finished abroad and then want to keep back your deposit because you haven't repainted in quite the right shade of cream!).

I?m sure it will all work out, I hope your debt expert was as good as mine. Add to the post if something irks and if I see it and know the answer I'll post back.

bythemoonlight and strawberrysam, please don't be scared of BR. It really isn't as bad as you will be thinking it is.

DH and I filed BR in January 2007, and were discharged in August and October 2007 respectively. We were able to keep both our (old) cars, and didn't have to make any payments for an IPA.

It was very simple for us, because we had no assets, so nothing to lose.

Why will you you lose the house? Are you unable to meet the mortgage costs? It can be possible to keep a house.

My other concern is that it is only your DH that is filing. Are you aware that if you have joint debts, they will just chase you instead?

Lougle- re the house, presumably because if they have equity in the house (i.e house valuation less outtanding mortgage = positive), then the house would be sold to pay off the other creditors to the extent possible.

In declaring yourself bankrupt, you are basically saying you cannot meet your liabilities as they fall due, so you cant really hang onto assets which could be used to repay your creditors.

Strawberry Sam if you open a Co-op Cashminder or Barclays Cash account , let them know it is for BR then it won't be frozen and you can carry on as normal.

Get yourself OVER TO HERE and ask away with any questions, the guys are really good.

Why do you think you may lose the house?

I went bankrupt in 2006 when I was pregnant with DS. It was far less complicated than I thought. The insovnecy people that deal with everything afterwards were extremely helpful and friendly and I never felt that I was being looked down on at all.
I did lose my home as a result of it, but it wasn't a huge issue for me because I moved in with my partner. However, it still hangs over my head in the sense that we still don't pass credit checks to rent through an agency so we rent privately in DH's name.
I was lucky enough to be discharged within 6 months.
I'm not sure what you mean by things getting back to normal. I have never tried to apply for credit since so I don't know if I could or not (I doubt it).
But it was a huge weight off my shoulders and it meant I could live. Before I did it, all my wages went straight to creditors and I was reliant on inviting myself to friends' houses or stealing in order to eat. Once I had done it I was able to actually buy things live a normal life.

I know someone who has just gone bankrupt and it does not seem to have affected him in any way. Infact he regularly mocks my DH and I for paying our bills. He went bankrupt last year, he rents a house no problems, has a new bank account, credit cards, overdraft and according to him will be buying a house next year.

If the house is in both names, half the equity if there is any ,will be yours and they can't touch that

StrawberrySam - check your payment dates. Basically, the best thing to do is aim for a court date that is as far away as possible from any important dates for either debits or credits. So for us, the debits all came out at the end of the month, so we asked for a beginning of the month court date, then we were all set up by payday. The official receiver can in any case authorise you to draw from an account that is 'frozen' if you find that your money still goes into the wrong account.

With work, simply say that you need to change the account that your wage is paid into.

Re the house: BaggedandTagged is right about the equity being used to pay off debts. And usualsuspect is right regarding the half of equity being yours. However, there are two issues.

Firstly, if you wanted to keep the house, what you would need to do is purchase the equity that your DH has from the Official Receiver. The OR doesn't have to get a £ for £ value, but is charged with getting a 'fair' price. Bear in mind that his costs in selling the property would be taken into account, so they may accept, say, an offer of 60% of the value of the equity.

The second thing, is that although Usualsuspect is right about half the equity being yours, the OR can force sale of the property to release the remaining equity that was your DH's if you choose not to purchase it yourself.

Yes thats what I meant if they force the sale you get to keep your half of the equity ..sorry if I didn't make that bit clear

This is a response from my dh, I hope it helps.

I've been reading this thread and am very sorry to hear about your situation bytheMoonlight. To be transparent, I have a debt counselling company and am dealing with people in dire straits every day. We also have a legal department because bankruptcy involving property can become complicated.

I'm unable to give any specific advice because I'm unaware of your precise personal financial situation position, however, I can make some general comments that may be of assistance to you and other posters and readers.

1. Bankruptcy where there is a property involved will complicate the situation. I notice that usualsuspect mentions "If the house is in both names, half the equity if there is any ,will be yours and they can't touch that". This is not necessarily the case. Methods of holding title to property vary. It depends if you are Joint Tenants or Tenants in Common.

1. There are circumstances where a bankrupt may not lose their home. The OR (or an appointed a trustee) will take control of the assets of the bankrupt. This control usually continues for 3 years, even if the bankrupt is discharged sooner. In most cases, if the property is in negative equity, then the trustee will not benefit from the sale of the property. However, if the value of the property rises over the period in which the trustee has control and this results in the property being in positive equity, the trustee may then act to realise the equity to distribute to the creditors. Two common forms are disposing of the property or assigning beneficial interest.

1. bytheMoonlight, you said " I phoned the debt helpline and went through the inns and outs of our finances and she said an IVA wasn't an option due to the fact dh is actually insolvent - so bankrupty is the only option". Insolvency means the inability to pay one's debts as they fall due. One of the reasons IVA's exist is to help people who are insolvent avoid bankruptcy. If you have property, assets or a profession that prevents you from filing for bankruptcy, an IVA or some form of debt management are better routes if possible. The best place to read up on bankruptcy is on the Government website www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/Bankruptcy/DG_187323.

1. Even is there is some equity in the property, for various reasons, the property may not be sold, for example: a) If after the sale there is unlikely to be any surplus left after transaction costs or b) assigning beneficial interest.

1. It is essential that anyone who is being discharged from bankruptcy or completes an IVA to full term takes proactive steps to repair their credit file. If property is involved, it is important to ensure any restrictions or assignment of beneficial interest are dealt with properly.

While good debt counselling is naturally essential, so is a good lawyer. If you use a debt counselling firm, ensure they have a legal team that understands property law. You may pay a bit more for their fees, but it will pay dividends to ensure your legal loose ends are tied after bankruptcy or an IVA.

If anyone has any questions, I'd be happy to try to help.

A good debt counselling firm do not charge for their services and if National Debtline have advised bankruptcy over an IVA then I am inclined to believe them.

For free, professional,impartial advice please contact National Debtline 0808 808 4000 or CCCS 0800 138 1111 or your local CAB and speak to a specialist debt advisor. Please also sign up to Moneysavingexpert.com and talk to the guys on the Bankruptcy board and they will steer you in the right direction.

The house is not complicated and yo do not need a legal team. If you can afford the mortgage and running costs when you have no debts and want to keep the house then if it is in negative equity you would pay £1 plus £211 fees to buy the OR's interest. If there is equity and the house is in both names then you would have to find 50% (depending on the mortgsge arangement) of the equity plus the £211, though you may be able to negotiate a bit on that.

BUT THE BEST BIT OF ADVICE I CAN GIVE IS DO NOT PAY FOR PROFESSIONAL ADVICE WHEN THERE ARE CHARITIES WHO WILL HELP YOU FOR FREE.

Hi thanks for the advice everyone really appreciate it.

My computer has been playing up, hence the delay in replying. Borrowing a friends atm.

Have sent the forms back to CAB so hoping to hear for an appointment asap so we can make the final descion and get things moving.

Have posted a couple of questions on the MSE site and they have been really helpful.

I'm not sure what would happen to our house tbh, this time last year we had 5k equity in it so not sure if OR would sell it or want to hold onto it for three years and see if the prices increase. If they do hold off for three years does anyway know if we have to stay in the house?

Although I am very upset at losing our home because of the loss of the stability, I am glad to be away from this area and our neighbours from hell in particular. I am trying to look on the bright side and at least we will be away from them!

When renting do letting agents what all the details of the adults renting the house or will I be able to deal with them by myself and then hopefully not have to mention dhs BR? Or am I better off renting of a private landlord?

Thanks again for all your help and advice, we havent told anyone in RL yet so its good to able to discuss it on here

ABSOLUTELY AGREE with MrsGokWan. However well-meaning Bunny3's DH is, you have ABSOLUTELY no need to seek advice from someone who would charge you, and if your DH is insolvent, the last thing he needs is owing more money!

National Debtline are fabulous, as are CCCS.

Incidently, one important fact is that a judge WILL NOT make you bankrupt unless you can assure her/him that you sought advice and that was your only option. So you MUST make sure that your DH gets advice from either the CAB, NDL, or CCCS.

Message from Bunny3's dh

Lougle & MrsGokWan. To clarify, we don't charge any fees to give advice. My offer of help to you and others is given in good faith.

There's a great site called www.talkaboutdebt.co.uk which gives lots of useful information about debt, bankcruptcy and options of helping with debt through charities only, it is free advice.Lots of people write in with their own personal debt queries and one of the professional insolvency practitioners from one of the charities will answer the questions or you can call and talk to them. Well worth a visit. Goodluck.

One thing for the OP to note - and anyone else who's going through bankruptcy - if you come to getting house insurance at a later date, lots of the insurance companies have a small clause asking whether you or anyone in your household is or has even been declared bankrupt....

I discovered this when I recently tried to buy home and contents insurance for our new house.

My DH went through bankruptcy although I didn't know anything about it at the time... Four years later I feel like we have finally been able to rebuild our lives but trying to get insurance has been a bit of a 'mare and SO unfair as the house is in my name and I am paying the mortgage etc, and he has nothing to do with the money side now!

[rant mode off]

I'm hoping someone can offer us some advice.

One year ago we took on an IVA with Freeman Jones.
We are struggling to pay for food each month let alone anything else & really feel that the IVA was not the best option for us.

Is there anyway out.... Can we declare BR without paying extra fee's?

I have had to cancel my gas & electricity direct debit's this month just to have money for food.

I'm hoping someone can offer us some advice.

One year ago we took on an IVA with Freeman Jones.
We are struggling to pay for food each month let alone anything else & really feel that the IVA was not the best option for us.

Is there anyway out.... Can we declare BR without paying extra fee's?

I have had to cancel my gas & electricity direct debit's this month just to have money for food.