Advised to go bankrupt ! Help

[chrisp1968]

I have just over £15000 worth of debt, mostly with DCAs, I have a car on HP but it's not recorded on my Credit Report, and I'm scared the HP company will take the car back if I'm bankrupt, im not in arrears and have 2 years left on agreement, do I really have to admit I have this car to the OR ? And admit bankruptcy to HP company ? Any help appreciated

[FlamingParrot]

Re: Advised to go bankrupt ! Help

Welcome aboard

I personally wouldn't chose the BR option for £15k worth of debts which as you say, are with DCAs, in fact, I do have just over that amount on credit cards I've not paid since 2010 (just one year to go before they are statute barred :grin: ) and I wouldn't have considered that option, sounds a bit too drastic unless they were things like tax debts who don't go statute barred or mortgage shortfalls where the limitation period is 12 years rather than six, or for larger amounts. £15k may sound like a lot but when you put it into perspective it really isn't, I know someone who's got £150k worth of debt! :scared:

it would be good if you gave us more details about your debts, such as:

• what they are (card, loan, overdraft, etc.)
• original lender (bank, finance company, etc.)
• who owns them now
• approx date you opened the account, took out the cards, loans, etc
• approx date when you last made a payment
• any other account history

I posted on another BR thread the other day, I'll dig that up rather than repeating it all here.

[FlamingParrot]

Re: Advised to go bankrupt ! Help

Below is the general info I posted in the other thread:

Bankrupcty is a big step and should be the last resort when dealing with debt. I know someone with £150k worth of unsecured debt who wouldn't be looking at BR due to being a property owner so everyone's circumstances are different. BR can be a way to get a fresh start but it can also have serious consequences that will impact your life in more ways than just your ability to obtain credit.Bankruptcies are a matter of public record, unlike defaults, where only certain companies can search your credit files, anyone can search insolvency records.

You may be asked in the future whether you've ever been insolvent, for example I had to answer that question the other day just to apply for public liability insurance. It's a common question when it comes to insurance applications.

If you're thinking of moving, you really have to do it before making yourself BR as being BR will make it very hard to be accepted as a tenant in private rented accommodation.

Depending on what you do for a living, bankruptcy can affect your current job as well as future employment prospects. For example:

• You may not practice as a Charted Accountant or Lawyer.
• You may not act as a Justice of the peace.
• You may not become a member of parliament.
• You may not become a member of a local authority.
• BR is likely to stop you from finding any sort of work in the financial sector, even in non-financial roles such as HR, IT, marketing, etc.

You will be expected to make payments towards your BR debts for a period of time, usually three years. If you have more income than you need for your family’s day-to-day expenses, the OR will ask you to make payments under an IPA (Income Payments Agreement).

You will usually have to close your bank account and most banks will not let you open an account when you are bankrupt. Existing bank accounts will be frozen, leaving you with no access to your money.
Utility and telecoms companies will want you to pay in such a way that involves you not having credit.
You won't be able to act as a company director while you are undischarged. If you are currently a director, you will have to resign.

You may not be able to carry on running a business.

You lose control of your assets and some of your possessions may have to be sold.

[Nibbler]

Re: Advised to go bankrupt ! Help

The bankruptcy forms ask you to declare any such vehicle, and the forms contain a statement of truth you have to swear to. You would be committing a serious offence if you lie, even by omission, in the bankruptcy. The OR can also check with the DVLA and would likely spot car/motoring related expenses on bank or card statements etc.

Neglecting to admit the vehicle is NOT an option.

What do the terms of the HP agreement say regards bankruptcy?

How much is it worth and how much left to pay?

Most finance companies will not repossess for the sake of it if nothing in it for them.

If the monthly payments and running costs are not excessive, and a car is essential to meet your domestic needs, the OR may allow a 3rd party to purchase their interest in any surplus value over and above the finance.

May be able to deal with the DCAs to avoid bankruptcy, but I get the impression you are at the end of your tether with that?

And if you are the chisp1968 who posted elsewhere, there are two disabled sons in the equation as well?

And you are over that DRO limit?

[chrisp1968]

Re: Advised to go bankrupt ! Help

I was originally thinking of doing a DRO but I would have the same question about the car HP agreement ? Thanks

[FlamingParrot]

Re: Advised to go bankrupt ! Help

I have just over £15000 worth of debt, mostly with DCAs, I have a car on HP but it's not recorded on my Credit Report, and I'm scared the HP company will take the car back if I'm bankrupt, im not in arrears and have 2 years left on agreement, do I really have to admit I have this car to the OR ? And admit bankruptcy to HP company ? Any help appreciated

There may be a clause in your hire purchase agreement that allows the hire purchase company to terminate the agreement if you become bankrupt. In this situation, you will have to return the car. The terms usually give the finance company the right to end the agreement in certain circumstances. The finance company can usually take back the vehicle if a bankruptcy or order is made. The official receiver will find out from the finance company what kind of agreement it is, the amount owing under the agreement, and the settlement figure.

Depending on the value of the vehicle, the official receiver can then decide whether there would be any benefit to your bankruptcy in selling it. If there would be no benefit, the official receiver will ask the finance company to collect the vehicle as soon as possible.
If the payments under the agreement are up to date, the finance company might agree to another person taking over the agreement. If you borrowed the money from a bank or finance company to buy the vehicle, they are unlikely to have any rights to take back the vehicle. Depending upon how much is left to pay on the agreement and the value of the vehicle, the official receiver may take action to sell the vehicle.

There may be some situations where you can keep the vehicle if a third party takes over the agreement for you. In some circumstances, you may be allowed to keep making the payments under the agreement yourself.

it it is a criminal offence to conceal information from the Official Receiver regarding assets (such as a car) or debts (such as a HP agreement). When you opt for BR the OR takes control of your assets.

[chrisp1968]

Re: Advised to go bankrupt ! Help

The HP company have the log book in their name till its paid for so a DVLA check wouldn't show my name against a vehicle. I have 2 disabled children that receive DLA which is what I use for the car payments

[Nibbler]

Re: Advised to go bankrupt ! Help

I have 2 disabled children that receive DLA which is what I use for the car payments

Forgot that bit, and you said they cover the monthly car payments?

You still can't lie of the bankruptcy forms.

[FlamingParrot]

Re: Advised to go bankrupt ! Help

I was originally thinking of doing a DRO but I would have the same question about the car HP agreement ? Thanks

If you are not in arrears with your hire purchase agreement, you can choose to exclude it from your DRO application. However, if you are in arrears, you must include it. Any further payments to the creditor must stop. Some hire purchase or conditional sale agreements may contain a clause which allows your creditor to end the agreement if you get a DRO.

If you are not in arrears, you may decide to leave out your HP or conditional sale agreement from your DRO. If you do this, future payments towards the agreement will only be allowed if the car is necessary to satisfy basic domestic needs. Otherwise, if you want to keep the car, payments under the agreement would need to be made by a third party, such as a family member or friend.

If you have a vehicle on a HP or conditional sale agreement and it is worth more than £1,000, payments would not be an allowable expense in your DRO. Therefore, you would have to include the debt in your application unless a third party is willing to take over the agreement for you.

The criteria for a DRO is quite restrictive with regards to how much you can have in assets.

[Nibbler]

Re: Advised to go bankrupt ! Help

DRO option already gone through mostly here

http://forums.moneysavingexpert.com/....php?t=5181295

[chrisp1968]

Re: Advised to go bankrupt ! Help

Thanks for all the help.

[Nibbler]

Re: Advised to go bankrupt ! Help

OK. You said advised to do a DRO, then advised to go for bankruptcy?

Advised by who? Can you tell us which organisations you have approached for help/advice here?

Both those are decisions only to be taken with advice from a professional debt advisor. Preferably consulting more than one from more than one organisation, so you get several independent opinions.

[Nibbler]

Re: Advised to go bankrupt ! Help

I would also note that the DRO limit is going up to £20,000 in October this year.

[chrisp1968]

Re: Advised to go bankrupt ! Help

I originally spoke to a welfare rights debt adviser over the phone about a DRO and went to the office today and she then advised to go for bankruptcy as she said I'd be able to keep the car due to my sons being disabled and I need it.

[FlamingParrot]

Re: Advised to go bankrupt ! Help

OK. You said advised to do a DRO, then advised to go for bankruptcy?

Advised by who? Can you tell us which organisations you have approached for help/advice here?

Both those are decisions only to be taken with advice from a professional debt advisor. Preferably consulting more than one from more than one organisation, so you get several independent opinions.

Indeed, and people come here for an alternative view as opposed to the official view of the professional debt advisor, they come here for experiences from live people rather than theories from debt advisors.

When I stopped paying my cards I went to the CAB and also used one of those 'debt remedies' from the official DMP providers, as I didn't have a job at the time due to the credit crunch, they pretty much suggested BR as I couldn't really offer a monthly amount to enter into a DMP or an IVA, which were very much in fashion at the time. The official sources would never have told me to send CCA requests, write back saying the accounts were unenforceable and just not pay anything and string it out for six years till it went SBd. They don't do that, howeer, it worked for me, and it has worked for a lot of others who have avoided more drastic insolvency solutions in much the same way. I could reel off dozens of usernames, including some who were convinced BR or a DRO was the only way to go.

On one of the forums where I was prior to this one, there was a lady who had over £100k worth of debt, some with CCJs, even the forum owner at some point thought the only option would be for her to go BR, yet she managed to keep paying £1/month towards her CCJs and keeping the other creditors at bay and not being taken to court. As far as I know, she never had to go BR and that was all nearly three years ago. :grin: :grin: :grin: