1.You decide your own fate:
I) Do not let someone else make you bankrupt
II) File your own petition, so that you are in control and are able to make much clearer decisions than when burying your head in the sand and thinking it will all go away
III) But remember it costs. We paid £460 each to do this and they only accept cash, no credit cards please. (Allow for a price increase)
"You decide your own fate - Don't put your head in the sand and wait for a creditor to make you bankrupt. Once you know that you are going to file for bankruptcy only pay the most important bills"
'"You may struggle to feed youselves in the first weeks of bankruptcy - It is vital that you save as much cash as you can.'
2. Choose your own bankruptcy date: The courts are now very busy and you may have to wait several weeks. During the weeks before the hearing only pay the most important bills, that is, your mortgage, rent, buildings insurance and home contents cover, home boiler insurance and, especially, your council tax, as they have the biggest, unattractive bailiffs you have ever seen – of this I have been reliably informed. They may appear, dressed in black, donning wrap around shades and convinced they are auditioning for a part in Reservoir Dogs. Stop paying everyone else the moment you have decided this course of action (bankruptcy). You are wasting your money. Forget the gas, electric, water, Inland Revenue, and so on. These overdue bills can be listed as creditors and written off in the bankruptcy. You can start again from scratch. I did not do this. I continued to pay as many bills as possible before the petition was lodged. But that was a mistake: I would have been better stocking the freezer. The only thing I did do - which I still stand by - was pay the creditors threatening debt agency action in an attempt to keep bailiffs from my door. I had children and it was vital that they were protected as much as possible. I even drew cash from one credit card to pay another rather than pay nothing.
3. Consider carefully before you leap into bankruptcy: If you have nil equity in your home or you are renting, bankruptcy may be a better course of action for you – but this really should only be taken as an extreme. Make sure you have exhausted every other method of debt management before declaring yourself bankrupt. Ask yourself, Can I raise enough cash from the sale of my home to pay off my debts? Or, if you have endowment policies that can be cashed to raise the money then you may as well do so, because if you declare yourself bankrupt the official receiver will insist you sell these to pay your creditors. Either way you will loose these policies. We had finally found ourselves trapped in the financial cul-de-sac and had reached the point of no return. We sold our endowment policies and cashed in our pension plans in an attempt to pay the bills. This is fact went in our favour as the official receiver could see we had made every effort to get our financial affairs in order.
4. Don’t be proud when listing your debts: If you are going bankrupt or even considering an IVA for goodness sake, do not be proud when it comes to listing your creditors or listing your monthly expenditures. If you are going bankrupt, accept it and deal with it. There is no point making such an enormous life-changing decision unless you make a clean start. If you forget to list someone you owe money to, the chances are you may still have to pay them. You will be living on such a tight budget that it will financially cripple you. List everything – wipe the slate clean, its history.
5. Plan for the year ahead as a bankrupt: Remember to take into consideration repairs, services, back up support, or replacements for tools in your bankruptcy year. We forgot and were then later confronted with replacing computer equipment. If we had been paying an Income Payment Order we would have struggled further. As it was the money for the replacement machine had to come from somewhere and normally it is the food-shopping budget that suffers, as often there is no spare cash within your business in the very early days.
Note: Prepare letters in advance to all your creditors informing them of your bankruptcy and post the day after your court hearing. Photocopy your certificate and send it with the letter immediately to avoid anymore nasty calls or visits. Do not wait for the official receiver to do this. He is very busy and can take many weeks to deal with this part of your case. Also keep copies of your bankruptcy certificate to hand just in case bailiffs turn up at your door. If you provide them with a copy of the certificate they won’t bother you again.
