"P.O" <firstname.lastname@example.org> wrote in message
news:email@example.com...<financial details snipped for brevity>Hi group, Not sure if there's any UK people here who can help ease my worries - citizens advice and the national debt helpline are too under-staffed to answer my calls it seems. Here's my situation:Well, here's what I know...I'd like to know the repecusions of actually going bankrupt except for the fact I can't be a director of a LTD company, it maybe publically announced in the paper, I get black-listed, etc.. none of that bothers me BUT I do have a great worry of..... will there be any legal repecusions? May I have to goto jail for instance? I see women on TV who spend 50k on handbags and clothes, go bankrupt and NOTHING like jail or anything was given... and since my debts are mainly due to business failure/mis-management as a sole trader, do you think I'd get away with no jail time? I don't mind them taking all my stuff, I have very little. I have clothes, TV/Video/DVD player and this laptop which is *essential* really as I'm using it to start a new business after I go bankrupt. Please could anyone shed any light on my 'punishment' that the courts are most likely to give?
1. You live with your parents. Therefore, there is a difficulty (from any
creditors point of view) in establishing that items in their house actually
belong to you, and not to them. That's your first big 'get out of debt free'
2. You don't state how old the car is, or how long you've had the finance
for, or how the deal was structured. What most of the car companies seem to
be doing these days is, the assumption is made (by them) that you have
actually bought the vehicle. The loan you took out payed for it, and,
although it does say something in the fine print about the goods being the
property etc,etc until full paid, if you try to return the vehicle, you will
find them extremely reluctant to accept it. You could actually sell the car,
if you were so inclined, and use the proceeds to pay something towards that
loan. Loan companies and even vehicle retailers do not want your old car
back - taking it back is a last resort, and just means that they have to try
to sell and out of date car alongside all their nice new shiny ones. Call
them up and ask them hypothetical questions - you'll see.
3. As your mother has agreed to be the guarantor, you might have a problem
there. However, when you file for bankruptcy, if you can prove that you NEED
the car for your work, and are stuck without it, then they normall will rule
that you can keep it. If, however, you are unemployed, or your place of work
is ten minutes away by bus, then you will have a problem proving that you
4. DO NOT mention things that you feel will be 'essential' for the future
when filing. Yes, I know you're supposed to, but, see point 1. That laptop
belongs to your mother. She paid for it. It's hers. So no one can reposess
it. If, however, you can not do your CURRENT job without it, it falls into
the same area as point 3 - they won't take things that are essential for you
to support yourself.
5. Punishment... well, we're talking about bankruptcy, not fraud,
embezzlement, espionage, etc. So long as you don't fall into the 'reckless'
category - i.e. you lend money, go on a spending spree, lend more money,
wash, rinse, repeat - you will simply be declared bankrupt, surrender all
your cheque books, bank cards, and so on, and not be allowed to have credit
of more than £500 for the next year. At the end of the year, you have a
clean slate, with the sole exception of the fact that the credit agencies
will keep your bankruptcy on file for the next five years. You will not go
to jail, unless there is criminal activity involved. Not being able to pay
your debts is not the same thing as stealing, even though it often feels
like it to those of us who end up in that situation.
6. The public announcement in the paper is usually somewhere in the back
pages, in small print, 9/10ths of the way down the page. Bored, tired old
men who thought it was the obituary column read it by mistake. If you're
fearing something like 'Pete is BANKRUPT' appearing as the headline, don't,
unless it's a really, really, really slow news day.
7. Get some accounts put together for your business, even if it's just an
Excel spreadsheet listing all the months, with zeros in two columns called
income and expenses. Trust me, rather give them something than nothing.
8. If you have any money in any accounts, get it out now, and keep it as
cash. If not, you're going to lose it. Also keep £440 cash handy to pay the
bankruptcy charge at the courts.
I hope that helped. You're lucky that you don't have your own home - things
get far more complicated then.