How does bankruptancy affect?

[cherry_pie]

As soem of you may know, my husband walked out a few days before Christmas, leaving me with £150,000 mortgage to pay and another wealth of debt (including an eternity ring to pay off in MY NAME). My son was 5months old. I have moved into my parents house and have got back on my feet. I am healthy and happy and so is my son and I am better off without my ex. However, it still doesn't get rid of all the debt I have. I have decided not to let money matters upset me, my son is the most amazing thing that ever happened to me and this has been the best time in my life ever despite what has happened in my marriage, I don't want money to cloud this special time with my son. I have decided to let the house be repossessed, it is in too much negative equity and it would be a noose around my neck for the next 30 years. I have been advised by a financial advisor to just stop paying the mortgage, after three months (legal grace period) she is going to ring and say I can't pay an dlet repossession proceedings begin. The chances are I will have to go bankrupt down the road. Does anyone know anything about bankruptancy? How it will affect me other than a bad credit rating and not allowed credit? Can they take my wages and benefits off me? I don't care about credit but I need money to ensure a good standard of living for me and my son. If anyone has any experience I would be very grateful.

 

[MrsRH]

don't know anything about bankrupcy but could you rent out the house to pay the mortgage if you are living with your parents

glad you are feeling better
x

 

[My_First]

Okay, you can actually hand the keys back for repossession whenever you like. Now, the good thing is, if there is joing debt, i.e. the mortgage and you go bankrupt, your OH will also be jointly responsible for the debt, and if you cannot pay it off, your husband will have to.

Remember, though, with bankruptcy, you will have to justify all expenditure you have incurred over the last x amount of years, i.e. the eternity ring, and any other credit cards. If you are seen to have been 'negligent' you can have whats known as a bank ruptcy restrictions order (BRO) enforced on you which means you will not be discharaged for (can be up to 15 years - in extreme fraud cases), normally between 3-7 years if you have been irresponsible.

Now also remember that you will not be able to have a full bank account, with overdraft etc. it will only be a basic account. Any other assets you have will have to be sold to pay your debtors, and any other debts you have will form part of your bankruptcy and will be repossed, this could be car on finance, sofas, computers etc.

Finally, if its simple and you dont have anything, you could be discharged in less than a year. It will sit on your credit report until it drops off after 6 years and you will struggle to gain credit. This could even be a credit check for private renting. Any income you have an income and expenditure plan will be put in place and any disposable income you have will be put into a plan to pay off debt.

If you have any other questions, please do ask/pm me, I have lots of experience in this area...

 

[Mummy2B21]

No advice but i do know before you go the bankruptcy route make sure you are 100% sure. Bankruptcy really should be a last resort decision.

You may find it difficult to private rent within the next 6 years.

 

[frantastic20]

Hi there! I would recommend that you call Consumer Credit Counselling Service on 0800 138 1111 for advice about this. They are the UK's leading debt advice charity - all advice is free and they will advise you on the best way to deal with your debts, including in-depth advice on bankruptcy. As they're a charity they have no agenda other than finding you the best way to deal with your debts

When you call, have details of all your income, expenditure and debts (both unsecured e.g. credit cards, personal loans, and secured e.g. mortgage) and this will enable them to give you the best advice as quickly as possible. They'll be open at 8am tomorrow (Monday).

Good luck with everything! It sounds as though you're managing everything pretty well anyway!

 

[Pearls18]

I'm really impressed with your postive attitude good for you, lucky little boy

I would just say research thoroughly, being bankrupt affects a lot more than you may realise, my aunt has just gone through it, she almost went homeless because it is very difficult to private rent when made bankrupt (the council wouldn't house her but you have a child so different), a lot of jobs will be closed off to you where they require good financial history, to even have a TV is difficult because you can't pay in installments so if you don't have money up front for a licence you technically can't have a TV, plus it's not as easy as it seems, you can go bankrupt but you still have to pay some things back I think I am right in saying- if you are earning you could be expected to pay back some of the debt (I think there are different types of bankruptcy that could determine this?) and you even have to pay to go bankrupt ironically!! So while it may be the best option for you I would research it THOROUGHLY so there are no nasty surprises for you, I'd also look into where your ex stands in terms of responsibility. Good luck to you

 

[MADLYSBOYS]

Hi there! I would recommend that you call Consumer Credit Counselling Service on 0800 138 1111 for advice about this. They are the UK's leading debt advice charity - all advice is free and they will advise you on the best way to deal with your debts, including in-depth advice on bankruptcy. As they're a charity they have no agenda other than finding you the best way to deal with your debts

When you call, have details of all your income, expenditure and debts (both unsecured e.g. credit cards, personal loans, and secured e.g. mortgage) and this will enable them to give you the best advice as quickly as possible. They'll be open at 8am tomorrow (Monday).

Good luck with everything! It sounds as though you're managing everything pretty well anyway!

I recommend exactly the same thing as frantastic I`ve been looking at the CCCS website for help too. There are several different solutions/options to managing debt on the website. Goodluck hon

 

[Feltzy]

Okay, you can actually hand the keys back for repossession whenever you like. Now, the good thing is, if there is joing debt, i.e. the mortgage and you go bankrupt, your OH will also be jointly responsible for the debt, and if you cannot pay it off, your husband will have to.

Remember, though, with bankruptcy, you will have to justify all expenditure you have incurred over the last x amount of years, i.e. the eternity ring, and any other credit cards. If you are seen to have been 'negligent' you can have whats known as a bank ruptcy restrictions order (BRO) enforced on you which means you will not be discharaged for (can be up to 15 years - in extreme fraud cases), normally between 3-7 years if you have been irresponsible.

Now also remember that you will not be able to have a full bank account, with overdraft etc. it will only be a basic account. Any other assets you have will have to be sold to pay your debtors, and any other debts you have will form part of your bankruptcy and will be repossed, this could be car on finance, sofas, computers etc.

Finally, if its simple and you dont have anything, you could be discharged in less than a year. It will sit on your credit report until it drops off after 6 years and you will struggle to gain credit. This could even be a credit check for private renting. Any income you have an income and expenditure plan will be put in place and any disposable income you have will be put into a plan to pay off debt.

If you have any other questions, please do ask/pm me, I have lots of experience in this area...

I agree with all of this. Be prepared for all of your assets to be sold and any excess income will have to go into the bankruptcy estate. Even after the Bankruptcy drops off your credit report after 6 years, certain forms will specifically ask if you have ever entered into a bankruptcy/arrangement with creditors i.e. mortgage forms.

 

[womblemum]

I would always advise someone to talk to their lender about the situation to come to an agreement where possible. If you are joint tenants rather than tenants in common the full mortgage is in your name just as it is in his - ie you are not only responsible for half as it were. When you bought the house you would have had to say which type of tenants you were (assuming it is in both your names) so this is separate from the mortgage.

Renting the place out if that would cover the mortgage would be the best option - that way you still have the asset should it come out of negative equity and you are not defaulting. Even if the mortgage is not covered in full it should make it much easier to keep up with repayments.

You would likely not be able to work in financial services potentially ever if you were made bankrupt (some may say this is no bad thing!) and some jobs where you come into contact with money (eg retail) may also wait until a certain number of years before employing you.

Lenders have to help you come up with a repayment plan or discuss how they can help if you contact them. Most will try and be reasonable as it is better to get some money than have a default.

With regards to the ring: loan agreements often have a halves and thirds clause or the ability to return the item and walk away from the loan. It is worth checking out the loan agreement or phoning the company to see if you could do this. Again, this would likely not be marked as a default so is a better option than just defaulting. If it is an eternity ring you may not be that attached to it given your ex

Good luck

 

[frantastic20]

Hello again...

I just wanted to clarify some of the post below. The part about whether you are tenants in common or joint tenants is actually not related to the mortgage - that's how you register the property with the Land Registry and affects what would happen to your share of the property if you died. It is not connected to the mortgage as such. If the mortgage is in joint names you are both joint and severally liable - which means that you are both individually responsible for the whole mortgage amount. This is not affected by the status with the Land Registry.

The part near the bottom about halves and thirds of a loan agreement - this only applies to hire purchase agreements. If you look at the original agreement from when you bought the ring and it says either 'Hire Purchase' or 'Conditional Sale' at the top then you may be able to hand the ring back - there are often lots of clauses with these so read carefully!!!

Hope everything is going well. If you haven't contacted anyone for help and still want information about bankruptcy, you can always go straight to the horse's mouth - the Insolvency Service!

I would always advise someone to talk to their lender about the situation to come to an agreement where possible. If you are joint tenants rather than tenants in common the full mortgage is in your name just as it is in his - ie you are not only responsible for half as it were. When you bought the house you would have had to say which type of tenants you were (assuming it is in both your names) so this is separate from the mortgage.

Renting the place out if that would cover the mortgage would be the best option - that way you still have the asset should it come out of negative equity and you are not defaulting. Even if the mortgage is not covered in full it should make it much easier to keep up with repayments.

You would likely not be able to work in financial services potentially ever if you were made bankrupt (some may say this is no bad thing!) and some jobs where you come into contact with money (eg retail) may also wait until a certain number of years before employing you.

Lenders have to help you come up with a repayment plan or discuss how they can help if you contact them. Most will try and be reasonable as it is better to get some money than have a default.

With regards to the ring: loan agreements often have a halves and thirds clause or the ability to return the item and walk away from the loan. It is worth checking out the loan agreement or phoning the company to see if you could do this. Again, this would likely not be marked as a default so is a better option than just defaulting. If it is an eternity ring you may not be that attached to it given your ex

Good luck