Discharged from Bankruptcy
At last things are looking up! The process that the Official Receiver goes through to grant me early discharge from bankruptcy began in early May. Just four months after the bankruptcy order was made.
The letter I received requested that I complete and return another income and expenditure questionnaire. This was to assess my ability to contribute to the bankruptcy debts and it had to be returned within fourteen days. Otherwise, the official receiver will not carry out the necessary action to grant me early discharge. I was also informed that I should not contact the Official Receivers office regarding the early discharge as it could cause a delay.
I completed the questionnaire and returned it. Then, at the beginning of August I received my notice of early discharge. Yippee! All over! In total it took approximately ten weeks from the date of returning the income and expenditure questionnaire to receiving the early discharge notice. The discharge was actually granted by the court in mid July, which meant in total my bankruptcy lasted just six months.
So what now? Well since my discharge I have established that I will not be expected to contribute to my bankruptcy debts. Prior to discharge there was only a very small surplus after meeting my domestic living needs and so an income payment agreement was not viable. As it can only be effected prior to discharge it is no longer a consideration and all future income remains mine.
As for having a bankruptcy restrictions undertaking put forward to me, it is possible yet unlikely. The reason I petitioned for my bankruptcy was that of honest business failure. My behaviour prior to and during bankruptcy was responsible.
It feels good to say that with no bankruptcy and no relationship problems, I'm feeling me again. Financially speaking, I am in a good position as I have no debts apart from the student loan to repay. Ok, my creditworthiness is poor and so it will be expensive for me to obtain credit. This is something I will have to accept and account for during financial planning.
Since starting university in 1997 I have been renting property. I really feel as though it is time to buy a house but with the prices so high and considering the consequence of bankruptcy I am not sure if it is a good idea. I know I will be charged higher interest and the likelihood is I will have to lay down a deposit and pay high broker fees. Given my current income this would be impossible right now but I have done my research and know what I need to achieve to position myself for the mortgage.
Further to this what would happen if I did obtain a mortgage and house prices fell sharply? Negative equity would not be a good thing for someone whose income wouldn't accommodate increases in interest rates. Am I being pessimistic or is this the responsible view I should be taking?
After Bankruptcy
The letter I received requested that I complete and return another income and expenditure questionnaire. This was to assess my ability to contribute to the bankruptcy debts and it had to be returned within fourteen days. Otherwise, the official receiver will not carry out the necessary action to grant me early discharge. I was also informed that I should not contact the Official Receivers office regarding the early discharge as it could cause a delay.
I completed the questionnaire and returned it. Then, at the beginning of August I received my notice of early discharge. Yippee! All over! In total it took approximately ten weeks from the date of returning the income and expenditure questionnaire to receiving the early discharge notice. The discharge was actually granted by the court in mid July, which meant in total my bankruptcy lasted just six months.
So what now? Well since my discharge I have established that I will not be expected to contribute to my bankruptcy debts. Prior to discharge there was only a very small surplus after meeting my domestic living needs and so an income payment agreement was not viable. As it can only be effected prior to discharge it is no longer a consideration and all future income remains mine.
As for having a bankruptcy restrictions undertaking put forward to me, it is possible yet unlikely. The reason I petitioned for my bankruptcy was that of honest business failure. My behaviour prior to and during bankruptcy was responsible.
It feels good to say that with no bankruptcy and no relationship problems, I'm feeling me again. Financially speaking, I am in a good position as I have no debts apart from the student loan to repay. Ok, my creditworthiness is poor and so it will be expensive for me to obtain credit. This is something I will have to accept and account for during financial planning.
Since starting university in 1997 I have been renting property. I really feel as though it is time to buy a house but with the prices so high and considering the consequence of bankruptcy I am not sure if it is a good idea. I know I will be charged higher interest and the likelihood is I will have to lay down a deposit and pay high broker fees. Given my current income this would be impossible right now but I have done my research and know what I need to achieve to position myself for the mortgage.
Further to this what would happen if I did obtain a mortgage and house prices fell sharply? Negative equity would not be a good thing for someone whose income wouldn't accommodate increases in interest rates. Am I being pessimistic or is this the responsible view I should be taking?
After Bankruptcy
You may also like to view my bankruptcy website.
If you have any questions regarding my experience then please feel free to E-Mail me.
posted by Piggy Bankrupt at
1:28 PM
4 Comments:
Hi Piggy,
You're too young to have experienced the last recession.
Historically the warning level of overheating is when the average home is more than four times average earnings.
This happened in the late 80s and there was the normal talk of new paradigms, etc. It didn't stop the house price collapse being severe when it eventually came.
Average house prices are now at eight times average earnings.
The effects of negative equity are horrible and don't obviously lead to bankruptcy. It's just that you owe a lot more than you're worth. You live in your home regardless but it's much nicer to know its worth more than your mortgage than the other way around.
Japan had an absolutely ridiculous period of house price inflation in which some mortgages were taken over periods of generations - ie your children would be paying the mortgage you took out. Result: well over a decade of deflation - what they call the "lost decade".
I wouldn't dream of buying a house if I were you. You are in a very good position. You are clear of your debts and can build your financial future while renting.
Wait for house prices to fall. THEY DEFINATELY WILL. When they do you will find wholesale negative equity and reposessions. While all your compatriots will be bemoaning debt built up on the back of their previous equity and facing mortgages bigger than the value of their homes you will be free to start home ownership at a reasonable level.
It is VERY hard to resist running with the herd but I promise you that the herd is in full stampede and heading for the edge of the canyon.
Just to balance the equation ignore the doomsayers who can't see house prices ever recovering after the crash. I've seen both ends of the spectrum and if you just follow common sense you'll be fine.
PLEASE, PLEASE, PLEASE don't buy a house at the moment. It's absolute madness. You haven't missed the bottom rung of the ownership ladder, you're just waiting for the ladder to be lowered again - and it will be lowered again.
By
Anonymous, at 11:15 AM
Very sound advice there. You would be very wise to take it. I am in the same situation myself. I am to wanting to get on the housing ladder, but have decided to wait until houses prices come down. We are in a very strong position. It is inevitable that house prices will come down eventually. You know what they say "what goes up, must come down!" Start by saving for a hefty deposit. The worm will turn. Good luck!
By
Anonymous, at 9:36 PM
I was discharged 18 months ago with a restricyions undertaking in place for 5 years. Obviously i cant get credit etc but life must go on.
My concern now where i need some advise is i stand to inherit a large amount of assets through my elderly parents, does anyone know if i have to declare this inherritance to the reciever even tho i am discharged from bankruptcy but still in a restriction order?
By
Anonymous, at 8:45 AM
Hi
last January (07) I petitioned for my own bankruptcy which was accepted...an income payment order was set up over the next three years which i pay into each month via a solicitor...no problem...my question is, when is it likely for me to be discharged from bankruptcy? As I have had no contact with the Official receiver since this time....I reluctant to contact the O.R as I don't want to upset the apple cart.....many thanks for any advice
By
Anonymous, at 9:00 PM
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