Topic: Bankruptcy Questions

[poppy9596]

Hi All,


This is my first ever post because me and my husband are thinking about going down the bankruptcy route.


To start the credit cards are in my husband's name, the only thing I am named on is the joint account which will be removed if we go through bankruptcy. We have £40K of debt on different credit cards and have done balance transfers as you do when you think you can manage things. I was also temporarily unemployed for 3 years due to suffering with depression and anxiety so we did not have 2 wages coming through. Due to my anxiety and depression we overspent and lived beyond our means. We are looking to do UK bankruptcy from abroad in the USA as we are moving back to my home country to live with family temporarily until we get on our feet again. My questions are:


1. Would it be best if we filed bankruptcy before or after we move abroad and if we moved abroad would my husband's bankruptcy affect him getting any credit in the future in the united states? I was reading somewhere that the bankruptcy only affects him in the UK
2. Due to the reasons for going bankrupt would my husband be declined bankruptcy and since we are going abroad and he wont have employment what is the official receiver's stance on this?
3. Is bankruptcy straightforward in that it takes the 28 days for them to make a decision or would we need to keep in contact with the OR if circumstances change and provide them with evidence?
4. what would they class as unreasonably extravagant, I know we lived beyond our means but we didn't spend thousands all in one go and we have been making monthly payments every month on the credit card. by living beyond our means I mean not keeping a weekly food shopping budget, once in a while holidays, and due to my depression retail therapy. I am worried if my husband receives a bankruptcy order of 2 -15 years like it has mentioned on various websites.
5. Will I be affected my the bankruptcy since everything is in my husband's name, I know I wont be but just double checking. I will be opening my own bank account in my own name


Any advice would be greatly appreciated.
4.

[Lisa Thomas]

You will be responsible for the joint account if your husband goes Bankrupt as the debt will be joint and several.


How much is it?


You say you have no debts, other than the joint account which you thought you would not be responsible for so why were you thinking of applying for Bankruptcy if you feel you have no debts?


1.  You need to look at the Visa application very carefully - Bankruptcy in the UK could affect that.  If you try to obtain Bankruptcy in the UK after moving to the USA it could complicate matters - I think there will have to be a hearing and you will have to be in the UK at the date of the hearing.


2.  The reason for making yourself Bankrupt is based on your insolvency, so I can't see this being a reason for rejection but if you are already in the USA when you make the application you will have to jump through more hoops.


3.  It is an online process but as I said above if you make it after you have moved to the USA I think you may have to make the application to Court instead, which will depend on the Court's availability as to how long it will take.


4.  It doesn't sound like you have spent money extravagantly based on what you have said.


5.  Yes you will need to prepare yourself to deal with the Joint account debt that will fall to you to repay.


Do you own any assets?


I would check the VISA conditions first and if all okay then consider Bankruptcy before moving to the USA.


Take proper advice off a forum before making the decision.  See an IP in your local area.

[poppy9596]

Hi Lisa,


Thanks for the reply, i am sorry for the lack of clarity in my post I typed it in a hurry lol.


My husband is the one with credit card debt but we have a joint account together. The credit card debt is 40K.


We are thinking of taking my name off the joint account so we are not financially linked. That way I wont be responsible for any overdraft or debt.


My husband has had a lump sum payment from work of 4.5K due to termination of his contract of employment so will the OR see this as an asset?


What will the official receiver look at? I know they contact the dvla and tax office to verify things, but since the debt was ran up due to my depression and lack of maturity would they need to see evidence of this?

[Lisa Thomas]

Is the joint account overdrawn?


If so you won't be able to take your name off it unless the debt is cleared.


No I don't think the O.R will need to see proof of your depression.


From memory I believe they may allow you to keep some of the redundancy costs to cover living expenses for up to 6 months if he is unable to find new employment.


The O.R has a technical manual - I cannot post you a link on this forum but I suggest you look at it on insolvencydirect dot bis dot gov dot uk to ensure my recollection on the redundancy is correct.

[poppy9596]

The account is in credit and as for the 4.5k i am going to be opening an account in my name only once we immigrate to the states.


If we deposit the rest of the 4.5k into that will that be seen as hiding assets? I just want to make sure this is okay so we dont make any mistakes or unintentionally look as if we are not cooperating with the OR.


I know the bankruptcy process is done online and if you are abroad you dont have to go to court anymore but have they changed this rule in the UK?

[Lisa Thomas]

You should look at S264 and 265 f the Insolvency Act 1986.


You will have to have been domiciled in the 3 years ending with date of B/O in the UK.


The rules used to say that you had to be personally present in the UK on the date of the hearing but this seems to have been removed form the latest version so looks as if it no longer applies and I would presume you can therefore apply on line.


You will need to be able to satisfy the test regarding the 3 years above and as this will make the process [size=100%]less straightforward (in you having to produce evidence to satisfy the adjudicator) and might hold up process.[/size]
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[size=100%]For the avoidance of doubt you should seek advice from an IP and a specialist insolvency solicitor.[/size]
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[size=100%]As regards the £4.5k you should not be taking that as it belongs to your husband and some or all of it may potentially be due to his bankruptcy estate.  This would be potentially defrauding his creditors.[/size]

[poppy9596]

I can understand it needing to be used towards his estate as he has no other assets than his car.


And i know they say he qualifies for uk bankruptcy within 3 years from the arrival date abroad


What type of evidence would they need to see?