asked 6 years ago

Hello everyone,

I hope I can get your help. I am looking to go bankrupt and have tried all the other measures. I have been to various financial advisers who seem to have conflicting advice (which is useful!) and am no further forward. I have a few wrinkles I would like ironing out, if I can, from people who know what they are talking about.

1. After over a year of begging them, the mortgage company have finally repossessed my house and put it up for sale. Do I have to wait for them to sell it before I can declare it as debt on my petition? Especially if I have no idea if there will be a shortfall?

2. There is a secured loan on the above property of £20,000 + all their fees and interest from non payment. Do I have to wait for that to be released from its secured state before I can declare it in a bankruptcy? Also, and I don’t know if this changes things, my husband is a joint signatory on that loan, so how would that work with regards bankruptcy, as it is only me going bankrupt?

3. I have been coerced in to being a signatory on a 25 year business lease, as the landlord refused to allow my husband to have the lease without my name being on there also. Some racial reason was given, regarding him being a “flight risk”. This was in October 2014 and I have no dealings with the business, have no income from the business, which is running at a loss anyway. I just want my name off the lease without jepoardising it for my husband. Can this be done as part of my bankruptcy? Can the judge demand my release from this lease?

4. I have opened a cash account with Barclays, which is designed for people who have gone bankrupt. No cheque book or overdraft, but allows you to set up standing orders and direct debits and have a debit card. It is a fluid account with no extra savings – just somewhere for my wages and tax credits to go. Will the OR really freeze this? I hope not because I opened is especially because I knew I was going to have to go bankrupt.

5. I should also point out that despite the lease situation mentioned above, I am separated from my husband and receive no money from him. Bearing in mind that I am supporting 2 children on a part time job and the benefits I am provided with, is there any way to get a discount on the huge fee for filing a petition???

Basically, I am wanting to go Bankrupt tomorrow if that makes sense and just need to know if I can or whether I have to wait out all these obstacles first. The stress is not good for my health.

Thank you in advance to all who can help me. I am desperate!!! 🙁

2 Answers
answered 6 years ago

A lot more information would be required to answer all of your questions and you may need to speak to several different types of advisers before making any decision about when to go bankrupt. It may be the case that you actually have no debt and therefore no need to go bankrupt however a few points noted may be useful. You could contact Shelter 0808 800 4444 about the way the property was handed back and check through any documents you may have signed to see if any shortfall will survive a bankruptcy. Any other person with joint liability for a debt will need to deal with all of the debt remaining after your bankruptcy. The debt is not automatically written off they simply ask the other liable persons to pay it as you are no longer liable to pay it. Help with the court fees depends on your ability to pay and you can get an application form with guidance notes from HM Courts & Tribunals Service here: http://hmctsformfinder.justice.gov.uk/courtfinder/forms/ex160a-from-07-october-eng.pdf You may be able to apply to a charitable trust funds to help cover the Official Receivers deposit and you will usually need to have your application signed off by a qualified debt adviser so it may be worth visiting your local Citizens Advice to see if they can help with this. Most of the energy providers have a fund that you can make application to and you can read details of the British Gas Energy Trust here; http://www.britishgasenergytrust.org.uk/help/grants-for-individuals-help-pages/how-can-the-trust-help If you were coerced into signing any form of contract then it may be best taking legal advice, rather than debt advice, about the validity of the contract.

This question was answered by Debt Advice Foundation, an independent UK debt advice charity. If you need further help, Debt Advice Foundation provides a free, confidential helpline and can advise you. Click here to find out more.

answered 6 years ago

Answers to each question numbered below:

1. No, you do not need to wait for the property to sell – if you go bankrupt now any shortfall should be included in the bankruptcy once the sale goes through. This question has been answered by CAP UK, a leading debt charity offering hope and a solution to anyone in debt.

2. The secured loan may be covered by the sale of your property; if there is any shortfall this will be included in your bankruptcy.

Bankruptcy is an individual process so would only clear your liability for any debts. If the secured loan was not fully covered by the sale of the property then your husband would remain liable for the outstanding balance.

3. If you have no financial interest in the business and there are no arrears owing on the lease then there is no reason for this to be impacted by your bankruptcy. If there are arrears then your liability would be cleared in the bankruptcy and I would suggest getting further free advice here, as it is possible that this could affect your lease.

You should be aware that any arrears that accrue after the bankruptcy would not be included and you may wish to seek further advice on whether you can be removed from the lease by other means.

4. The reason for freezing a bank account is simply so that the OR can check that you do not hold surplus money that should go to your creditors. In view of this the OR will likely freeze your account, but only for a short period of time to verify your financial assets.

5. If you are on a low income or a qualifying benefit you may be entitled for your fee to be reduced to £525 (in England, Wales and N.Ireland).

I would suggest that you seek further free debt advice on this matter from an organisation who can refer you for bankruptcy- https://www.talkaboutdebt.co.uk/debt-help

This question has been answered by CAP UK, a leading debt charity offering hope and a solution to anyone in debt.