BANKRUPTCY- Has anyone been or know anyone who has been through it and managed to rebuild their lives?

[citronella]

I think I am running out of options now. I have a stack I mean a stack of debts left over from my marriage and I have been trying to pay them off for the past three years through a payment plan. Last year I lost my job and have only been able to find a job which in itself is ok it only pays almost 10x my last job. I have reduced payments through the plan but they are not enough to keep the wolves at bay. I rent, don't have a car and raise my 2 boys by myself. I just don't know what else I can do. How traumatic is going through bankruptcy and do you ever get a chance to hold your head high again. I am 46.

Bump

(Sorry, can't help really but hope someone else can).

I can't help either, but you hold your head high whatever happens.

You've been doing all you can and raising your children alone. If the 'worst' does happen and you have to file, you have no reason to be ashamed.

Good luck (and hope someone with useful advice comes soon)

My husbands best friend declared himself bankrupt last year after his restaurant businesses were hit by the recession. It has worked out ok for him. He moved the house into his wifes name so they didn't lose it and then went back to being a full time chef. He now seems like the weight of the world has been lifted off his shoulders and he is getting on with things. I think he finds it hard not being able to get credit for everyday things but I don't think there was any alternative.

My DH was made bankrupt many years ago, and it was fully discharged before I met him so is no longer on his credit report - he paid everything in full though over time, nothing was left owing which I think affects how it is viewed in future.

We have a mortgage, and a completely healthy credit score.

Good luck, I cannot imagine how stressed you must be. Please don't feel ashamed, it sounds as though you have done all you can.

I have been through bankruptcy. I am just six years discharged now and am only just beginning to repair my credit rating.

In regards to 'holding your head up high' I always have. Dh lost his job and the temp work he did plus the cleaning job I took on to help paid nothing like the job he lost. Our bank refused to enter into a payment plan with us and I felt nothing but relief once we started going through the process as I had been ill with worry prior to this.

I didn't find the process particularly traumatic, the courts and official receiver were not judgemental and our friends were all supportive, if not slightly shocked I think.

Please don't feel this is anything to be ashamed of. As others have said there will be an enormous sense of relief once the wheels are in motion and it won't last forever (the courts/discharge process I mean).

Who gives a flying fuck if you've been made bankrupt - as you say, it will give you a chance to start anew. If anyone is unkind to you because of this then they're probably not worth wasting time on. Nobody sets out in life to deliberately become bankrupt.

Seems many "rich & influential" have done and escaped unscathed - e.g., Donald Trump, Anthea Turner's husband, The "alive" one from Two Fat Ladies (twice!) - I don't see any of them skulking around!

I've not done it myself but I got in to trouble with my mortgage a few years ago and the absolute relief when I decided to just "fuck it, I'm selling up and moving on" was glorious. I'd spent years with a beast stuck on my back whispering "what if the boiler goes?" etc., etc. to the point where I was almost scared to use the utilities at home in case I had a big bill. The day the papers were signed I started to breathe again. :)

Life does go on and nobody is giong to chip in to your headstone "nice lady, but went bankrupt in 2011".

Oh thank you all so much for your kind comments, they really mean a lot.
Wilts - what happens with the courts and do I have to pay costs? How can I pay that when I can't cover the debts?

Alibaba - Did he have to pay every last penny? How old is your DH now?

Once again thanks. Always knew MN was best place to get real answers from real people!

citronella - here is the Govt page on insolvency.

Really feel for you. It can be very frightening to face up to financial problems (I'm sticking my head in the sand at the moment) especially when you're on your own.

As well as MN, you will be able to get excellent support on Money Saving Expert and The Motley Fool's Dealing With Debt board. They will be able to help you assess what the very best option is for you and your family based on your level of debt and your incomings and outgoings. If bankruptcy is the right option, you will be very far from being alone. Good luck and here's to a fresh start.

Unmumsnetty hug coming your way. My DH went bankrupt a few years ago. The relief we felt once the decision was mad was astonishing - I dont think you can over estimate that feeling once the papers have gone in. The hounding phone calls and letters have to stop as soon as the wheels are in motion too, so at least you dont dread the phone ringing and the postman arriving.

My DH was dealt with very fairly by the court and receiver; there was no judging of him, it was just a legal process to go through. Of course the court day was tough, but then once that was over, we felt like life was starting all over again.

As for paying everything back over time, my DH certainly didnt do that, wiping the slate clean of debts was the whole point of things. I think he did have to pay for the court fees though, but best to get proper advice on that.

It all just seems like a bad dream now and one day it will for you. One other thing, you can get a new bank account - a basic one - straight away, which felt lovely for him, a bit like rejoining the real world.

Citronella- I went bankrupt in 2004 so can only go on my own experience not sure if things have changed since then?

Re costs: yes you pay to go bankrupt ( the irony) it was at least £200 when I went through it- no idea of costs now though. We did struggle to find this money.
Once you file the papers at court you will get a hearing date, from then on you cannot pay any of your creditors at all- you can't be seen to favour one over the other. Once you have the hearing date though you are able to inform them of this and I found they stopped hounding quite so much.

I sought advice from our local ' advice point' like a local CAB- I was asked by the judge if I had gained advice, so would suggest you do too to explore all of your options. When I went for advice I fully expected to be told to enter into an IVA, but due to the level of debt Bankruptcy was recommended straight away.

I was not required to make any payment back after the bankruptcy as I had very little income of my own and wouldn't have been able to afford to, I know others have had to though.

The car was in my name and the receiver set a date for it to be removed from me, however, I was able to make an extremely low offer for it, so purchased it back if that makes sense?

I had to list items of value (didn't really have any) they will not take essential items from you, or anything belonging to your children. I had visions of the TV being taken etc, but it was just the car.

With the bank account, I walked out of the court and straight to the CO-OP who opened me a basic 'cashminder' account- oh that is another thing to be mindful of, once you go into court your bank accounts will be frozen, don't open the new one until after the hearing.

Moneysaving expert has some really good information on the process.

Sorry can't link because I am on my phone but others have linked to Moneysavingexpert. Post on the bankruptcy board there and people will help you with it all. The first thing you need to do though is take FREE, PROFESSIONAL, IMPARTIAL advice. There is a sticky on the bankruptcy board on Moneysavingexpert marked LOOK HERE FIRST:Bankkruptcy Help. Click on that and you will find a list of debt charities who will help you.

The cost of going bankrupt is £700 now. You may be able to get a remission on the court fee (£175) if you are on certain benefits or a low income but the OR's fee will still have to be paid (£525).

You can open a Co-op cashminder over the phone or a Barclays Cash account in branch. These are bankruptcy friendly and don't get frozen and you can open before bankruptcy and get all your payments and stuff in order.

Hope that helped a little, but please get yourself onto Moneysavingexpert and ask questions.

thank you all for your very helpful and practical messages. I will explore this seriously although I feel so scared I can barely breath.

My DH did pay every penny, although it was a relatively small amount and he was earning a decent wage. Someone made him bankrupt rather than him declaring himself, I don't know if that makes a difference.
He is 42 now, I think he was about 30 when he was made bankrupt.

Please go and talk to CAB and discuss your options, fear of 'what ifs' is often the worst aspect of financial worries IME.

I think I'm going to have to do this too.
My debts are way out of control and the money I have coming in is minimal, because I'm waiting to be assessed for ESA and DLA.
I can hardly sleep ay night.

I have already spoken to CCC and they can't help much now as I don't know what money I'll have until everything is sorted.

I've already been served an eviction notice so have lost my home, or will have soon.

I don't care about my credit rating, it's non existent already and I don't expect to ever have to use it again, nor do I want to.

Didn't this happen to Simon Cowell - and nomatter what you think of him - he can certainly hold his head high financially.

OP hope things work out for you.

Firstly, apologies for my slow responses. I have been at work all day and didn't get many chances to MN and atm the boys are arguing.

Netto, I am so sorry that you are in such a situation. I too have pretty much got a shot credit rating which is one of the reasons I am considering this. Have you been to the CAB or I would suggest a Legal aid solicitor in your position to work on your side.

I think that is what I will do assuming none of the creditors get in first. But I first have a house to sell (out of which there is no equity left).

Bit worried about the 'freezing' of accounts though. My account is already just an ordinary account.

The freezing of accounts worries me too.
All I have is available overdraft, never credit and it's all benefits going in, as I can't work due to illness.

All the advice places I've tried have been great, very sympathetic but can't really help me until I know what I'll have coming in once my applications for ESA and DLA have gone through.

As I said earlier the Co-op Cashminder and Barclays Cash account are bankrupt friendly and don't get frozen. Just let them know you are going bankrupt when you open them. No other bank will let you keep an account while bankrupt.

The Co-op account you get DD's and SO's, talephone and internet banking, withdrawals from any link machine, a Visa debit card and you can pay money in at any Post Office as well as branches.

The Barclays account you get DD's and SO's, withdrawals from any link machine, a Visa debit card and you can pay money into any branch.

Pop over to the Bankruptcy and Living With It board on MSE and have a chat with the folks on there, they are a friendly bunch.

Ranty, thanks that is so useful to know.

I was made bankrupt some years ago - my business partner didn't pay our VAT and lied to me about it for ages. It was easier for me because my DH was very solvent and we put the house we moved to a couple of years before this into his name only as I was aware of what might happen if my business venture did not suceed.

I warned my bank in advance and they did not freeze my account - which was a few pounds in credit - but just withdrew the overdraft facility. The official receiver did a plan for me based on my income and expenditure and I paid £300 pcm for 3 years (the rules were different then) I just gave up on even thinking about a credit card for 6 years and then all of a sudden my bank offered me one again with a ludicrously high limit ( £13k!!) but I pay off the balance every month. My credit rating is now excellent.

The bankruptcy really took off the pressure and I'm relieved it happened now.

We went bankrupt in February. I spent 2 years expecting it and worrying myself mad, reading everything I could get my hands on. The moneysaving expert forum on bankruptcy and living with it is amazing. In the end we set ourselves a date to shut our business, we had to find somewhere to live too, once we moved it gave us some breathing space because nobody knew where we were.

The actual process is a lot less scary than you would think, we didn't have to see the judge at court, our papers were just stamped and returned to us, and our interview with the official reciever was ok, he was chatty and completely understanding as to why we were there. we had nothing to hide, no assets for them to take and will be discharged within a year.

The relief we felt was unbelievable. No more nasty letters, or fear of someone knocking on your door. Our lives are so much better now. We are absolutely skint beyond belief, but we sleep better in our beds at night, and our family life is so much happier.

Good luck. You will be fine.