News1 min ago
Personal Bancruptcy
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Hi, I hope someone can help.....I have a friend who is considering personal bankruptcy and wont accept any help. Her main concern is for her childrens future, foe example will it affect her daughters application for a university place?
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It is easier than you think, I went bankrupt 6 years ago, the best thing i ever did, all debts wiped out and now back solvent once again. If your friend doesn't own property then its a doddle, it sounds like its a daunting thing to do but its pretty straight forward, basically list all your debts, credit cards, loans, council tax etc and explain why you've got yourself in a mess, just tell the truth. Everyone is very helpfull, the receiver just talks you through your debts and asks you questions, this takes an hour or so, also you will have to go to your local court to get the official document stamped, you may have to meet with a judge, i did and it lasted about 2 minutes, others that i know had their documents stamped without seeing him. Its easy to get another bank account, the Co oP are very good. I came away with all of the debt, stress and worry wiped out, it is such a relief! Tell your friend to go for it, it will not affect her daughters future. good luck.
it won't affect the child in any way - the bankruptcy will almost entirely affect the person doing it (unless they are married/cohabiting and have joint finances). people get very over-wrought about bankruptcy and what it means, but in reality it is not a painful process, will not change your life or give you a tattoo on the front of your head marking you out from other people!
make sure that she opens a basic bank account (i chose the rbs) to move all her essential bills and income into BEFORE she does anything else (e.g. move wages etc. out of a bank account that is drowning in debt - it is the first step in doing anything about your debt) that they can use after applying as they close down all accounts listed in bankruptcy. if she has very little money because of her debt, by moving into a basic bank account (e.g. debit card and no overdraft) she may see an immediate improvement in her finances. she can them start to contact all of her creditors and explain that she is looking at her options and to freeze the account/debt for a limited time (usually 30 days) while she considers her options).
i would say bankruptcy is only worth doing if there is £10k of debt + (depending on her income and type of debt). in the first instance, encourage her to contact payplan (a brilliant FREE debt company - see link below. only use a free one - they offer the same services that others will charge you for) and they will sort everything out for her - even advising to bankruptcy if that's what she wants and it is relevant. do not go to the c.a.b.....they are useless and understaffed (and most advisers do not know anything over and above what you can find on the internet).
also point her in the direction of the money saving expert website for further information. i went bankrupt 7 years ago and it was the best thing i ever did - the relief i felt afterwards was enormous. i did it all myself in the end and it is relatively pain-free if you do your research - except for the enormous fee for the courts. please, please don't give her the impression that she will spontaneously combust if she actually goes bankrupt - very little happens except the official receiver goes through your finances with a fine-toothed comb and you are restricted financially for a year. you list every debt - i even included around £42 i owed the milkman!).
afterwards, you cannot get credit for anything for about 5-7 years as you will be turned down for everything. she may have to pay a contribution to her debts for the year she is bankrupt (if she has disposable income), but again, that is it. other than that, not much happens. for some people, it can be the best tying that they ever do. i wish her luck (please, please pass on this post and advice, and here are the links:
http://
https:/
https:/
make sure that she opens a basic bank account (i chose the rbs) to move all her essential bills and income into BEFORE she does anything else (e.g. move wages etc. out of a bank account that is drowning in debt - it is the first step in doing anything about your debt) that they can use after applying as they close down all accounts listed in bankruptcy. if she has very little money because of her debt, by moving into a basic bank account (e.g. debit card and no overdraft) she may see an immediate improvement in her finances. she can them start to contact all of her creditors and explain that she is looking at her options and to freeze the account/debt for a limited time (usually 30 days) while she considers her options).
i would say bankruptcy is only worth doing if there is £10k of debt + (depending on her income and type of debt). in the first instance, encourage her to contact payplan (a brilliant FREE debt company - see link below. only use a free one - they offer the same services that others will charge you for) and they will sort everything out for her - even advising to bankruptcy if that's what she wants and it is relevant. do not go to the c.a.b.....they are useless and understaffed (and most advisers do not know anything over and above what you can find on the internet).
also point her in the direction of the money saving expert website for further information. i went bankrupt 7 years ago and it was the best thing i ever did - the relief i felt afterwards was enormous. i did it all myself in the end and it is relatively pain-free if you do your research - except for the enormous fee for the courts. please, please don't give her the impression that she will spontaneously combust if she actually goes bankrupt - very little happens except the official receiver goes through your finances with a fine-toothed comb and you are restricted financially for a year. you list every debt - i even included around £42 i owed the milkman!).
afterwards, you cannot get credit for anything for about 5-7 years as you will be turned down for everything. she may have to pay a contribution to her debts for the year she is bankrupt (if she has disposable income), but again, that is it. other than that, not much happens. for some people, it can be the best tying that they ever do. i wish her luck (please, please pass on this post and advice, and here are the links:
http://
https:/
https:/
1. If her debts are under £1500 she may be eligible for a Debt Relief Order - depending on whether she meets some other criteria. She needs to get advice from a free advice service such as local CAB, or Stepchange charity. The effect is the same as bankruptcy in that all debts are wiped out but the procedure is simpler & the cost is only £90 instead of £705. (She may be exempt from some of the £705 fee but would have to find most of it or get it from a charity).
2. If she is not eligible for a DRO then bankruptcy may well be her best option. It is - as already said - quite straightforward & there is no reason for it to affect her children at all.
3. Advise her very strongly that she should not consider an Individual Voluntary Arrangement if it is suggested to her. These arrangements are only suitable for people who have assets (such as a house) to protect which they might lose in bankruptcy.
2. If she is not eligible for a DRO then bankruptcy may well be her best option. It is - as already said - quite straightforward & there is no reason for it to affect her children at all.
3. Advise her very strongly that she should not consider an Individual Voluntary Arrangement if it is suggested to her. These arrangements are only suitable for people who have assets (such as a house) to protect which they might lose in bankruptcy.
Having read all the comments with interest,particularly the ones stating that it was the best course to take,and how much better the bankrupt felt afrerwards.
This may well be the case,but it should be remembered that there are creditors involved who are out of pocket here ( including the aforementioned milkman ).
Nobody has mentioned this by product of bankruptcy.
This may well be the case,but it should be remembered that there are creditors involved who are out of pocket here ( including the aforementioned milkman ).
Nobody has mentioned this by product of bankruptcy.
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