Bankruptcygreenspun.com : LUSENET : Repossession : One Thread
What is so bad about declaring myself bankrupt. I have spoken to a solicitor and it all seems to easy. What exactly does it mean and what are the effects (good) and (bad) to me. Will it get HMC off my back.
-- Guy Dixon (email@example.com), April 09, 2002
I can only comment about this because a relative took this route a number of years back. But, this is his experiance as he told it to me and others may disagree.
Downside -------- All your bank accounts are closed. Any credit balances go to the reciver. You will find it a bit hard to open a new bank account, if you tell them you are bankrupt. There is nothing to stop a bankrupt person opening or running a bank account. If the application form asks if you are a bankrupt then you are breaking the law if you fail to disclose it. But, most Solo type accounts don't ask the question so its not a problem. If you are silly enough to tell anybody that you are bankrupt then they will know. Otherwise nobody gives a damn. There is a lot of social stigma about going bankrupt, so don't tell anybody. You can't be a company director. You can't be a policeman. You can't be in the armed forces. You can't be a magistrate. Your earnings will assessed, if you have any excess income over expenditure then you have to pay it to the receiver month by month. If you have any spare valuble assets they will be taken by the receiver. This does not include your household possessions, but they will take your cars and boats, and planes, and castles. You will have to have at least one meeting with the receiver. (My relative had a ten minute meeting, then he was told that was it, thanks very much, be sure to tell us if you win the lottery, bye) If you have valuble assets, goods, contracts, a business, then you lose them all. Houses with excess equity are sold. But, if you have children under 16 then this is deferred providing you can make the mortgage payments. The receiver can place an unlimited charge against your house which can be realised anytime in the future that it is worth his while to do so, even after yuo have been discharged from bankruptcy. Banks and building societies dislike ex-bankrupts. This may be because ex-bankrupts know how easy it is to shake off the yoke of financial debt if they need to do so, but I think that banks just don't like ex-bankrupts. If you go bankrupt a 2nd time then it lasts longer, 7 years? And the receiver gives you a rough time the 2nd time.
Upside ------ Your debts all stop dead. It is against the law for your creditors to harass you. You owe nothing to your creditors, but the receiver owns you for three years. After three years you are discharged from bankruptcy. You start your life again. You sleep at nights.
My relative declared himself bankrupt in the late 80's. It cost him a £100 or something. His mother bought the equity in his house for £1,500 to prevent a charge being placed on it. The equity was about £4,000 at that time and his children were aged 4 and six, so they would have charged the house for long term recovery of equity without his mothers intervention. He was asessed as having £35 a week excess income over expenditure so he paid £120 a month to the receiver for three years. Today he runs a business employing ten people and the company has an income of £2M a year. He said to me that going bankrupt was the most sensible thing he ever did. He had business debts of £200,000 and minimal income. By going bankrupt he sorted out his financial problems and started afresh. And he slept at nights.
Best to talk to the CAB, they tend to advise bankruptcy if you owe more than you can hope to ever pay. They can advise,and expand, on all the upside / downside issues.
Everybody has a different set of concerns regarding this. Are you earning, how much do you owe in total, what do you own. You really need to evaluate everything and then come to a decision.
Going bankrupt is a bit of a pain from what I've seen, but its not so bad. There may be long-term concerns because banks don't like ex- bankrupts, but nobody else really cares.
-- Harry (firstname.lastname@example.org), April 09, 2002.
I can't really disagree with Harry's post, except to say that if you are shown to be in a position to tackle the shortfall head on by being a good earner, the Lender may apply to have the petition set aside. All your other debts are wiped clean, but a mortgage shortfall can come back to bite you later on, if all the paperwork isn't done properly. Make sure the OR knows that the Lender left you no choice, and that your predicament has resulted after attempts to recover the situation were rejected or failed. It was some years ago I explored this avenue, and it wasn't the option I chose. Some days, however, when I think of the 11 years of hassle they've put me and my kids through, I wish I had done it.
-- Too scared to say (email@example.com), April 09, 2002.
I think it costs you £1000 now to become bankrupt.
I don't know your situation with HMC but they were the company that I had the problems with. I was about to go bankrupt in 1999, after making several settlement offers which they rejected outright without any negotiation whatsoever. I wrote them one last pre-bankruptcy offer asking what they wanted as a settlement, and they finally gave me an amount which they would accept as settlement. I had offered the sum over a period of 3 years (the duration of bankruptcy), and they wanted the sum over 6 years (so basically double what I had last offered - £3600). I took this route rather than the bankruptcy route.
You could try writing to them and saying just what do they want. Oh, btw they had a summary judgement against me, for 56k.
-- avril smith (firstname.lastname@example.org), April 10, 2002.
It costs 370.00 per person to declare yourself Bancrupt.
-- worried (email@example.com), May 14, 2002.