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Original poster

bankruptcy question. Can anyone help please?

24 replies

justworried · 09/12/2008 16:40

I am concerned because my friend and her partner have decided to go bankrupt.So she ran up her credit card to its limit in the last few days, and also has a £14.000 loan. It is in his name and he bought her a car earlier this year with it. Also spent it on some home improvements.
He is going to apply for bankruptcy. Will she get to keep the car?, as its in her name. He got the loan but bought her the car.
And also will they allow him to go bankrupt if they have spent up to her limit on the credit card, on a mad christmas spree.
They do not own their home.
My dh says they will not,and they will take the car away because they live together.
And he says if it was really this easy to go bankrupt then people would do it all the time. Especially with the credit crunch affecting us all.
She seems to think it will be easy. and they will not have to pay anything at all, so they get the car for nothing and all that spending on the card they will not have to pay back.
It actually seems unfair to me. Does anyone know?

OP posts:
DLI · 09/12/2008 18:00

i dont know alot about it but i know if they have to pay to go bankcrupt!! I also think that if you start working or are working they will take some money off you to pay towards your debts. I think it is that easy to declare yourself bankrupt but you cant get credit for a very long time, not even £10! I think that they are very silly and if he goes bankrupt she will still hav to pay her credit card unless she goes bankrupt too and am sure they will certainly take their care and any other non-essential items they own! that only my thoughts anyway! not sure legally though

Original poster
justworried · 09/12/2008 18:35

Thanks DLI.

She knows they will have to pay the bankruptcy fee. The credit card is in his name also, but she has been using it.
It just seems ridiculous to me, because they were behind on two payments for the loan so they decided to go bankrupt, so she went out and spent nearly the limit on the card!!!!

He works, but not highly paid.
My husband says they maybe will do an attachment of earnings on him. I think its called that.

I tried to tell her that I did not think it would be so easy,and was not such a great idea, but she is convinced she now has all the stuff she bought, and the car for only the bankruptcy fee she has to pay to the court. Then the car belongs to her.

I am sure it cant be that simple. can it?

OP posts:
Ivykaty44 · 09/12/2008 18:45

www.debtadvicebureau.org.uk/bankruptcy/petition.html

Is your friend under the impression that the court will actually sign the order? The court may not agree and dismiss the case....

retiredgoth2 · 09/12/2008 18:52

I read that link as saying the car will be the property of the credit card company.

Rightly, as they should be able to recover whatever of the debt is possible.

Bankruptcy is not a free pass to spend, and I suspect your friend may have a rude awakening...

Saxy · 09/12/2008 18:54

They will take the car, it does not matter what name it is registered in. the OR will investigate how all the money was spent and will see that the car was purchased with the loan in his name. If the CC's are in her name and she is not going BR then she is stuck with them. If they are in his name then the OR is likely to ask for the purchases they have made as they were purchased when he knew he was insolvent. He may be slapped with a BRO which will inforce restrictions on him for up to 15 years (but more likely 3 - 6). He/they will have to pay the OR 60% of his disposable income for the next 3 years.

It is relatively easy to go bankrupt but only a fool would do it as a quick fix. You will not get credit of any kind for many many years, not even an overdraft. Some jobs are affected by bankrupcy (financial institutions for example).

I don't think bankruptcy is unfair as it is there to help the people who have no other way to turn but OR's do not take kindly to the sort of actions your friends have taken.

Saxy · 09/12/2008 18:58

It's an IPA not an attachment of earnings. The OR will also take a percentage of any bonus which may be paid out and eveytime you get a payrise you will ahve to let them know so they can adjust your IPA accordingly.

Drusilla · 09/12/2008 19:04

One of my friends declared herself bankrupt a few years ago and they went through everything. In particular she had to justify things she had bought in the last 6 months, apparently so people cannot do as your friends have done. Most of her debts she had taken on from her ExH and about 3 years prior to this she had taken out a consolodation loan to pay back her mother who had paid a lot of things off for the ExH. But the courts did try to get money back from her mother.

Original poster
justworried · 09/12/2008 19:04

Thankyou IvyKaty44.
I will read through that. I do think she thinks they will just sign it.
I was wondering if they will see she spent nearly the whole of the credit available on the credit card in just 3 days. Surely that speaks for itself.
I said to her, have you tried to speak to the credit card people, and she said no, she would just see a solicitor and go bankrupt.

Retiredgoth2, I am quite cross about it because we are both struggling to make ends meet,and she now thinks she is very clever and keeps boasting because she has a new car and all her Christmas presents sorted. It makes me a little upset because we have very little.
I do not think she has thought this through, and even though I dont want to see her in huge debt, I do think she needs to realise you can not do this.

OP posts:
Drusilla · 09/12/2008 19:05

I think lots of people assume that once they are discharged that means they will have no problems getting credit/mortgages again, but it's not that simple

Original poster
justworried · 09/12/2008 19:12

Saxy, sorry for my ignorance, but what is OR and BRO. This is all new to me. and what is a IPA?

OP posts:
Original poster
justworried · 09/12/2008 19:21

She has just rang me, and said that the solicitor (she has not seen him yet, but they have talked on the phone) said she will be able to keep the car, as it is in her name, and her partner does not drive. And she will be able to go bankrupt!!
She does not seem bothered at all. I am quite annoyed to be honest.
She is not one of my good friends, which is good really because my opinion of her is changing rapidly.

OP posts:
Original poster
justworried · 09/12/2008 19:23

That should read... she probably will be able to go bankrupt.

OP posts:
LadyLauraStandish · 09/12/2008 19:28

The Official Receiver has a Hotline number you can call to report this kind of behaviour if she does go bankrupt.

WingsofaChristmasTreefairy · 09/12/2008 19:41

If she goes bankrupt then they will take into account her assets which would include a car. If there is value in it she would be made to sell it.

Their landlord will also be informed of the bankruptcy.

They will only be allowed a basic bank account.

The Official Receiver will look at their case with a fine tooth comb.

LadyLauraStandish · 09/12/2008 19:55

Hotline 0845 601 3546

or write to your nearest OR's office (once the bankruptcy has gone through, obviously!!!). Here is a list list of offices.

I'm not joking - people like this deserve to be grassed up.

Original poster
justworried · 09/12/2008 20:03

LadyLauraStandish. Thankyou, but I am afraid because what if she finds out it was me?
I have small children and I do not want anyone to get hurt.
If I am honest I was wondering if there was anything i could do. But now if I do anything she will suspect me wont she?
I agree though I do not think it is right at all.

OP posts:
LynetteScavo · 09/12/2008 20:16

I don't see how she can keep the car if she is going bankrupt. Unless she is signing the car over to someone else first, such as a family member, who will then let her drive it.

She won't' be able to have a credit card again in the forseeable future, and will only be able to have a basic bank account.

With the credit crunch affecting so many people, I think there will be many more people going bankrupt.

Original poster
justworried · 09/12/2008 20:35

LynetteScavo, it is her car but her partner got a personal loan to pay for it. I am not sure it was a car loan though.
I think she has been really silly to be honest. And maybe she does need a wake up call. But she thinks its all done and dusted and she will keep everything.

OP posts:
WingsofaChristmasTreefairy · 09/12/2008 20:56

If it was a personal loan rather than a car loan then they wouldn't necessarily take the car off her. They would want to see what assets he has.

If she goes bankrupt and the car is considered an assets then she will have to sell it.

It really not a simple as writing your debts off just because you can't be bothered to pay.

They do ask how this situation came about and what you have done to try and pay your creditors.

So if they have racked up debt and just think they can write it off then they will get a shock.

Idrankthechristmasspirits · 09/12/2008 21:03

If the car is worth 2k or more it will be taken and put towards her debts unless she can prove that it is absolutely essential. To do that she would have to be disabled/have a disabled child or partner etc, or it would have to be a work van or similar.

When your friend goes to court she will have to put her case forward. Wanting to go bankrupt because you have spent up to your limit is not a valid reason. Hopefully she will be refused. If not, she will not be using credit for 6 yrs, she will lose her car, she will find it difficult to rent anywhere, she will have her bank account frozen and will have to open a basic one. She will not be able to have a switch card, visa electron or cash card only.

LynetteScavo · 09/12/2008 22:06

If she does get to keep everything - I'd really like the number of her solicitor in case I ever need to go bankrupt!

LadyLauraStandish · 09/12/2008 22:11

justworried, you can grass her up anonymously you know.

angelinspain · 04/01/2009 12:52

There is a whole section of pros and cons of declaring yourself bankrupt on www.helpful-ideas.com
Hope things work out ok.

angelinspain · 04/01/2009 12:56

for you that is not your silly friend!

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