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Old 23rd March 2010, 03:40 PM   #1
UpandDown
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Join Date: Mar 2010
Posts: 293
Bankruptcy and Seperation

Hi! This is quite a niche question but I thought i'd take a chance and see if anyone has any advice, especially anyone who has been through it.

My husband and I are considering bankruptcy. I was wondering if anyone knows the implications of seperating at the same time?

We are due to make a decision in 4 weeks time whether we will seperate or continue into proper counselling in an attempt to make the marriage work.

My husband is not at all hopeful the marriage can be saved so I think most likely is we seperate in 4 weeks and second most likely in about 12 weeks.

We haven't started bankruptcy proceedings yet.

Thanks for reading!
Kathryn
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Old 23rd March 2010, 05:15 PM   #2
koliver0821
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Re: Bankruptcy and Seperation

Sorry you are going through this. I too am dealing with the financial issues but my wife and I both decided that the relationship issues were to be dealt with separately.

However, It is in YOUR best interest to talk to an attorney to see if there is any implications depending on when you separate. I cant tell you that enough. Seeking protection under Bankruptcy law is different as a couple. Im not sure if the debts are yours or not. It may make sense that you separate first for you. However, that may change what happens as it relates to alimony and child support.
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Old 23rd March 2010, 06:43 PM   #3
Raymond
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Join Date: Dec 2006
Posts: 6,409
Re: Bankruptcy and Seperation

I only know about bankruptcy for one person.

You can file for Bankruptcy in the court if your debts become insurmountable. An Official Receiver is then appointed who works out everything you own. You are allowed the necessities of life housing, food that kind of thing. They are quite generous. All the other financial assets go into a pot. The preferential creditors will be the tax man and nationalised utilities who get paid in front of the others, then secured creditors who might try to sell the security. All the others will get so much in the £ out of whatever is left. A lot of people will not fully get paid but you will be free of debt to start again.

If you have tranferred anything valuable within the previous seven years from the date of bankruptcy the official receiver will claim this back for the pot.

Raymond
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Old 23rd March 2010, 07:14 PM   #4
clockwork orange
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Join Date: Oct 2007
Posts: 73
Re: Bankruptcy and Seperation

What about an IVA rather than bankruptcy? You do pay more back, but the long term implications are far less.

Edit : If you do it at the same time as separation, then you will need to have a formal legal separation arrangement, which includes for financial separation. How that would work with bankruptcy I don't know, but it should dovetail quite easily with an IVA (individual voluntary arrangement).

Last edited by clockwork orange; 23rd March 2010 at 07:19 PM.
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Old 26th March 2010, 11:20 PM   #5
UpandDown
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Posts: 293
Re: Bankruptcy and Seperation

Thanks so much for all the posts - I really appreciated your input. Sorry I didn't reply sooner but my computer kept crashing. Seems to be feeling a bit calmer today, however, so hopefully I can get through this email.

Clockwork Orange, I had considered an IVA but there is so little income coming in at the moment (having a one and two year old and no free childcare available somewhat curtails ones earning potential!) that it possibly wouldn’t be viable.

I also don’t feel the need to avoid bankruptcy. If I were to personally go bankrupt, I truly believe it would be the very best option for me and the boys. The only difference in my life would be where we live. My husband may wish to consider an IVA as his job options might be restricted……

Anyway, the good thing is, I have narrowed it down to two companies who I want to guide me through the bankruptcy and I just need to decide which one to go with. As they will be advising me as an individual I should be able to get good advice about what is best for me as a married or separated person.

What I have found out is that as long as we are married, the whole debt is carried by both of us, so the debts in my name, his name and our joint names are all carried by us both, so if I go bankrupt he will be liable for the full amount.

Thanks again for posting.
Love Kathryn
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Old 27th March 2010, 12:55 AM   #6
clockwork orange
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Re: Bankruptcy and Seperation

That makes sense. And the bankruptcy stuff is all over with in about 2 years isn't it? I would get a formal legal separation first though. Assuming staying married is really not an option.
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