I’ve always had good credit and had a sensible approach to money when I was younger but as the years went by my era had the “I want now pay back later” attitude. When I was married my ex husband had a strict control over the finances and worked money out to the last pence. I used to think he was a little tight but now looking back with hindsight he was the better one with money not me! The thought of going bankrupt was never on the table then.
After splitting with my ex in 2003 I met my partner in 2004. He was totally different. He encouraged me to spend money and use my credit cards and always used to say you work so spend on yourself. I soon started to use my credit cards to the max and because I had a good credit rating I was able to apply for a personal loan to pay off the debt on the cards. I thought that this would be easy for me to control. My personal debt was but then we decided we needed to improve the house.
We had already re-mortgaged in 2005 to pay off my ex husband and put my share back in to the house!! We both had car loans and 2 credit cards each. At the time I was only working part time so my money was very tight and I had to rely on my overdraft religiously every month. My partner was also in this situation.
In 2007 we decided to get a secured loan, A VERY BIG MISTAKE!! At the time thought it was good. We were successful in applying though no surprises there!! My partner had the majority of the loan as his outgoings were allot more than mine. MY payments would be halved going down this road and the same with my partner. We would both be better off!
We had no problems meeting the mortgage and the secured loan for the first 9 months and then disaster. Due to unforeseen circumstances me and my partner split up!
We were still making the payments as required but I was concerned that as it was a joint loan my partner could stop paying his contribution, hence putting the onus on me! A part time job, 2 growing children, another credit card which I got out again!! Overdraft again!! I would not physically be able to pay the loan on top.
I took advice and as a result ended up handing keys back to the mortgage lender. I did ring the secured loan people and explained my situation but they said that we had to pay back the full amount plus interest before they would allow a house sale to go ahead!! So the keys went back and the house put on market.
The first price would mean that the mortgage would be paid off and the rest would go towards paying the secured loan off. This was in August 2008 at the same time as we went in to a country recession! The house finally sold in February 2009 and at a drastically reduced price which meant there was deficit in mortgage and no money at all to the secured loan!! I managed to arrange a payment to the building society who said that they would quite happily split the deficit 50/50 but the secured loan company wouldn’t do that. I rang this company and told them what I could afford to pay. They sent me an income and expenditure form to fill in and weren’t happy with the amount I was paying as I had a credit card which I was paying a lot more back on! To say the least they were not the nicest of people to deal with and I was getting very upset and poorly.
Luckily I had fantastic support from family and friends and in October 2009 I was declared bankrupt. The emotions on the day of the bankruptcy hearing were unbelievable, a great big hug from my dad meant the world to me!!! It still brings tears to my eyes. In June this year 2010 I received my discharge from bankruptcy. I’ve still got a payment plan in order for the next 2 and half years and my bankruptcy will be on file for the next 6 years. But do you know what it’s the best thing I’ve ever done and I am managing my finances really really well and things can and will get better!!!
Interview set up on the land line for 10:00hrs, oh so prompt he was too. I was shaking like a proverbial leaf and with that much paperwork to hand around the phone in the end I thought well if I cannot remember my notes now, then tough. I shall answer the questions, candid, clear, to the point and no waffle. Honesty is the best policy.
Phone rings, I left it for a few rings to make it look like I was not sat by the phone!! Lol He was very professional, they have to be. I still managed to inject my humour into it though!
Basically he asked why I found myself in this position. For me and my husband it was the same answer, his dramatic drop in wages. This was documented on a spreadsheet and sent to him later. Of course there was a bank loan from a high street bank, hiked up to the point of doing themselves an injustice. No way could we ever pay that back, they would not work with us and when we asked for help they plonked on at us left right and centre and made us squirm and suffer even more. His conclusion – they ground you down. Surely he cannot say? I was sticking to mind my P’s and Q’s!!!!
He asked about my illness, OCD. I told him over the weekend that I had thrown some thoughts down on a page. Now anyone knowing me would know that I don’t do that! It is a long list sifted through and meticulously refined, but it did sound good at the time. A kind of Blue Peter moment ‘here is one I threw together and made earlier’. Again I would send that through to him. It depicted how and why we ended up in the mess, but I did blame myself due to OCD and not being able to work outside the home for some years earlier. He instantly jumped on this and said; nope it was the demise when the bank refused any form of compromising help and that coupled with massive loss of earnings basically scuppered the boat. Don’t blame yourself otherwise you will end up in a dark place.
He did not go through any income and expenditure with me, choosing to leave that to go through with my partner later. Nor did he go through any credit cards, loans or such as to when started, what for etc. I had anticipated a Gestapo approach and a firing squad at my door by noon, not to be! All becoming a little boring actually, but then my ears pricked up! Seemed he was happy with the income and expenditure (I&E) delivered on the SOA and would only be asking for a nominal amount if any at all from my husband’s wages next year, NEXT year I said! Yes we won’t be calling for any monies until February. Then it may or may not be done at source. He would again discuss with my husband.
Any questions he asked. Yep, want to mention about my daughter. I do not want to move her from school as that will incur extra petrol. Also she has lactose intolerance and needs a special diet so I may have to ask for more money too. His reply, send me the schedules with the money worked out and a brief I&E form so I can look at it before speaking with your husband later (I don’t do brief but I did on this occasion. He got precisely what he asked for, no more and no less).
That being that he concluded and went his merry way.
Second interview up, my husband was bricking it! Five roll ups later, not that he smoked any. I reminded him the habit was rolling them not smoking them!
Not as prompt, 20 minutes later the phone rang. Brief introduction, straight into things, of course I was ear wigging, well standing by with a notepad like the dutiful wife!
Exactly the same as with me, the I&E was really a formality, he was in control and said what he would allow. He calculated the household income and told hubby to watch for the zero tax. The Official Receiver also said that the car would be totally exempt. The child benefit was also exempt. So that on top we would have approximately £2100 a month, for 3 years, with approx £150 in the income order.
In point of fact he was very reassuringly on our side! He sympathised with us in regard of the high street loan and said he had dealt with the lender before. The bankers were no better, they made us use our children’s bank accounts up and all the overdraft in the last month. We did, but many people have since then said that they should not have done that!
As for giving the keys back, the OR rang them up in the day to ascertain why they require extra signing. He wants to make sure that we only sign to say giving the keys back and nothing else, and will be there for us every step of the way on that one. Because we had effectively given up our secured property he also went and looked into the Insolvency act 2006 to see how that worked. Yep the unsecured element of the debt would be included in the bankruptcy, clearly a kick in the teeth for them. For that I hold no sympathy at all. I think we all hope that the mortgage company would sell at a loss so they do not get a penny!
Oh and also my husband’s wages and pension contributions, he can keep paying it, no need to downgrade, he sees no reason to do that at all!
The life insurance policy, he said to call them to get it changed to reflect the beneficiaries upon mine or hubby’s death to go to the children. We have to pay a fee of £50 each and he will relinquish any grasp on them.
That was that, paperwork to come out to us and finalise in writing. Oh and he telephoned the bank and told them to stop calling us etc….THEY HAVE!
DONE!
Without the help that we received we could not have done this. It gave us confidence, drive and restored faith when we were down. In short it was the 5th emergency service and we want to sing your praises. You have been invaluable and a mind of information. THANK YOU
I went bankrupt in April 2006 and was discharged in 2007. The reason for going bankrupt at that time in my life was due to severe ill health, to the point where I had only 24 hours to live. As you can see I made it through and live daily with the disabilities left with me and am trying to repair my credit history. It seems so unfair that like a mug several people loaned money on my credit cards. They did not pay me back and I am left with trying to sort this myself. Why can’t I get a second chance?
Well we are officially bankrupt. It was a longer process than I expected. The judge was nice though I think he only talked to us so he could give us some advice. He didn’t like our notorious mortgage company or some or the people involved in the bankruptcy process. He did advise us to keep receipts for everything and not to round the figures up for our income and expenditure statements. He also commented that it was nice to see the person that had done the paperwork for us knew what they were doing for a change.
