A friend of mine has run up stupid debts... problem is now they aint paid anything (rent, council tax, ect) for about a year because of problems with work, not getting paid and things.

Now unfortunately, the interests and the amounts wanted back far out weight the amount of money they are earning and now the landlord is trying to throw em out because of non payment of rent.

They have done every other option, except bankrupcy.

I understand the general gist of the whole thing, stops legal proceedings and means any debtors can't take any further action against them and while they will still owe the money, they wont need to pay it back.

But what are the long term ramifications?

 

Yeah - the boss of my last company

I would ask for ya, but we aren't on speaking terms - least not untill I get my £1500 I'm owed

 

it costs £400 to start bankrupty proceedings. If he has assets like cars etc they can and will seize them unlesshe can prove he needs em for work dueto unregular bus routes etc.

No credit or mortgage as such for 6 years, He can but expect very very high interest.

If they have not paid rent , it may mean that they may not even get council housing.

 

no long tem ramifications any more due to every man and his dog bumping themselves.
mortgage you'll get albeit at higher rate along with loans.

if you've got yourself up that tight and with no way out then bump yourself voluntary before you get forced.
voluntary liquidation is free at the courts-dont know where sludge got £400 from.
if you can see a way out then better option is to offer creditors something every month as they'd rather go that route and freeze interest than them end up with nothing.

sorry i've been puting "you" in my post, i meant your friend.

hth

Tricky

 

Right, firstly don't think that bankruptcy is an easy way out'. It ain't.

If you don't have any assets, ie. car, house etc then it really makes no odds as if you haven't got anything, the Receiver can't take it. The Landlord situation is a tricky one as he is legally entitled to evict if rent is owed, and equally if someone is a bankrupt they may well be breaking their tenancy agreement in which case the landlord is entitled to evict. Please don't think that if the guy goes pop that he's protected from the Landlord kicking him out. He's not.

There are also the ramifications elsewhere. If the guy does get evicted, if he tries to rent another place searches will be done and they will show bankruptcy and alot of Landlords / letting agents won't help. Equally, if the guy works the Receiver is entitled to take whatever percentage of the take home that is agreed / arranged etc which could prove problematic in finding a deposit etc for another place. If assets are involved then these can and usually are sold to repay creditors x pence in the £1 they are owed. What figures are we talking here ? How many creditors ? If more than I think 3 then a Voluntary Arrangement may be a better idea.

 

Thats what my best mate got charged about 6 months ago Rich


The Myths & the Truths
Bankruptcy must not be taken lightly — It should not be considered if you have assets of any reasonable value and own your own home, even if there is little or no equity. Contrary to what might be said about the new Enterprise Act, which states that certain classifications of bankrupts could be discharged in twelve months, this will happen in relatively few cases, and it should be remembered that the stigma of bankruptcy will probably NEVER go away.

Even after being discharged, it can affect the ability to obtain a mortgage or get credit for many years to come. Being declared bankrupt is a very public matter, some of the effects are;

Bankruptcy is always advertised: The bankruptcy application will be advertised in the London Gazette and the local press where you live.

Notification is made to everyone financially connected: Your bank, building society, creditors, landlord, etc will be informed immediately.

Bankrupts cannot run a business: Any business you own will be closed immediately.

Future assets will be lost: Any asset that might have been acquired during the term of the bankruptcy, such as inheritances, insurance payouts/maturities, equity in property, windfalls, etc., and possibly pension income.

All accounts closed: Bank accounts, credit cards will be closed. Anything that is being purchased by lease or HP, such as your car, will be immediately returned to its owner.

Previous Bankrupts: People that have been bankrupt before should be very careful about being made bankrupt again, as the minimum period of bankruptcy is 5 years, and could continue for up to 15 years before being discharged.

Professional & Business Status: Certain employment situations will be prejudiced by being declared bankrupt, and professional and business status will be lost. Membership of many associations and societies will also be lost.

The Myths

"They will not take my house, it is in negative equity." The Official Receiver will place a charge on the property, effectively preventing it's sale,and will wait, long after your bankruptcy has been discharged, to get his hands on any available equity that has come about due to increased property values.

"They won't take my home, I have a wife & young family." They will, unless your partner can prove they have an interest in the property, in which case the Official Receiver will allow your partner to purchase your share of the equity. If they are unable to do this, then the Trustee in Bankruptcy will, after 12 months, have the right to obtain possession and subsequently issue an eviction order.

"I put my home into my partners name years ago." They will take your home, unless you can prove that your partner paid the full value at the time of the transfer and has since paid the mortgage in full. You will also have to account for the funds.

"My new business is in my partners name, and all profits will be taken by my partner." This is regarded as a criminal activity by The Trustees in Bankruptcy and any assets earned during the bankruptcy will be forfeit.

 

The full length version of what I was trying to say - cheers fella

 

Very interesting. Learnt a lot from that. Thanks dude

 

NO problem

 

so did i ...

 

Thats spot on bud my mates mum has just done it last week

Think you'll find its £426

 

lol, I knew it was around that . So it has gone up then, robbing fookers

 

How the fook do they expect you to pay £426 when your gonna be bankrupt!

 

the sludge cheers man thats really useful.

 

So can you be forced into bankruptcy by the debt company???

I don't understand how that would work?

What if you had enough money but you chose not to pay it surely they would go down the county court route rather than threaten bankruptcy????

I alsways thought you could not be bankrupt until you had nothing left?

 

as above yes it does cost if u enter into voluntary bankruptcy the only way it dont cost is if you are forced into it

 

i recon i must be fooking close after this week









fooking staff

 

why not try a debt consilidation firm to sort all his debts, they will go through everything that he owes plus woork out what he can afford to pay whilst still paying for his rent they will then contact all the recievers and arrange for the interest to be frozen and set up a agreed minimum payment.

 

bankruptcy aint actually that hard and tbh there a GOOD side to it,,,,,,,, ot wont allow you to loan or overspend and as a result you will no longer be in debt so its not a bad thing


oh and please dont think that trying to kill yourself paying it os a good option when GENUINLY you cant as you will be forced into a agreement to pay the queens silver as a min payment for EVER untill its payed AND THAT IS A DEFAULT AND ON YOUR CREDIT HISTORY JUST AS LONG AS BANKRUPCY

now tbh i paied a huge debt i owed back and realy worked hard to do it,,,,, just as another member on this forum is doing too,,,,,,


BUT going bankrupt IS the best option and if i knew about it at the time i would ahve done it and the bloke on here would but theres another reason why he cant do it and hes currantly paying more cash off a week that he does on ANY OTHER BILL and hes STILL got the bad credit history as hes defaulted on the agreed terms



as for the rent thing,,,,,,,,,,, that dont make a difference as if he never made a attempt to pay anything then he will be sleeping on your sofa mate

when hes got no income then payking rent cant be done so he has to make other arangements,,,,,,,, if not then the worst is gonna happen, but then im sure hes thought about that now and its pointless aswell as unfair to knock a person due to there bad error,,,,,,,,, we all could have been there at somepoint and soon some may find there own self in that situation if the interest rate rises

 

DO NOT EVER USE A PLACE LIKE THIS !!!!,,,, THEY DO NOTHING BUT PAY OFF ALL YOUR DEBTS AND GIVE YOU ANOTHER LONGER TERM LOAN WITH A MUCH MUCH HIGHER INTEREST RATE AND HE WILL PAY TWICE THE FULL VALUE OF HIS OLD DEBT AT THE END


that means if hes total loans WITH INTEREST come to 20k he will be paying back 40k over a longer period of time


if he approachs the companys himself he will still pay the 20k with the interest BUT he will be allowed to pay a reasonable amount where at the same time he defaults and wont get credit,,,,,,, its a much better solution

debt managments companys love the fact that people are ignorant and trusting when in debt and the ones who really want help and are honest usually visit them and they rape them over alonger part of time



they should all be closed down as they go round a law that dont allow you to get a loan to pay off a existing debt by paying it all off FIRST then they get the cash off you rather than get a loan to pay a loan



there worse people than drug dealers imo but allowed to do it as they aint breaking a law