Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Lizardwoman1 · 18 February 2013 at 2:43PM

Please can someone help me I am about to fill in the forms for bankruptcy but not sure what is allowed please could someone help as I have found conflicting information.

We are a family of 5 two adults and 3 children.

Obviously council tax water gas and electric etc I know but I could do with knowing how much I should put down for clothing haircuts food and household items holidays birthday and christmas and childrens activities.

Thanks

StepChange_James · 18 February 2013 at 4:41PM

TheGardener wrote: »

I have recently completed the StepChange online remedy tool and the recoomendation was bankrupcy. It was a bit of a shock but having spoken to an advisor over the phone I now I am reading up on it and getting my head round it. It have a question: If my bank accounts are frozen - how do I get paid and will my DD's for gas/phone/rent etc still be paid? The debt I have is not with the bank I have my everyday banking account with (but not sure if they are linked - my loan (debt) account is with Lloyds TSB but salary and DD's at Halifax) I should say that my basic bills rent/Gas/phone/counicl tax etc are not in arrears (yet)- my debts relate to loans I can no longer affford to pay after everyday essentials.
thanks

Hello,

Thanks for posting. It can be quite shocking to be recommended bankruptcy when it's not occurred to you before. At the same time, if it's the best way forward then it could be a way to take a lot of pressure away from you.

The courts will contact your bank shortly after your bankruptcy hearing and they will freeze your account while they investigate it. Providing you don't have huge amounts of money in the account it's likely it will be unfrozen pretty soon - we usually say no more than 48 hours.

After that it will be down to your bank what they do next. Many will shut your account down due to you having gone bankrupt. Not all do this, so it may be worth having a chat with someone at Halifax to see what they say.

Halifax and Lloyds are linked (Lloyds bought our Halifax a few years ago) so that could be a factor in their decision about keeping your account open.

If Halifax won't keep your account open then Barclays bank allow undischarged bankrupts to have simple basic bank accounts, so you could go there.

The timing of your bankruptcy and the response of your bank will determine how many direct debits don't go through. If any payments are missed it should be fairly simple to contact the people who you’ve missed payment for and arrange a one off payment some other way then set up new direct debits for the month after on whichever account you’re going to use.

Hope this clears things up.

James

StepChange_James · 18 February 2013 at 4:45PM

Lizardwoman1 wrote: »

Please can someone help me I am about to fill in the forms for bankruptcy but not sure what is allowed please could someone help as I have found conflicting information.

We are a family of 5 two adults and 3 children.

Obviously council tax water gas and electric etc I know but I could do with knowing how much I should put down for clothing haircuts food and household items holidays birthday and christmas and childrens activities.

Thanks

Hello Lizardwoman1,

I'd say that our online advice tool Debt Remedy will be the easiest way to get figures for this sort of thing. You can access it here: http://www.stepchange.org/msehelp.

As well as give you advice on the available options (it'll give you a second opinion on whether bankruptcy is a good move) our system helps you plan an income and expenditure budget. The budget tool will suggest figures for those areas you are unsure of and even though these suggested figures are ours rather than the insolvency services they'll be on a similar level.

Obviously our suggested figures aren't written in stone and it's better to put down figures which represent what you actually spend. Debt Remedy will probably help you work out if you're in the right ball park though.

All the best.

James

whichwhydoIturn · 19 February 2013 at 11:33PM

Hello Thank you for your reply
I'm 51, 52 this nov
Would you know whether or not my pension would be at risk , it is the only "asset"I have
I'm not intending to claim it before in at least 65
I'm sorry I don't know how to quote my original message to you
I posted 03.02 @5.27am
I've been in touch with step change very helpful and I wish I'd gone there before going to a fee paying company

StepChange_James · 20 February 2013 at 11:28AM

whichwhydoIturn wrote: »

Hello Thank you for your reply
I'm 51, 52 this nov
Would you know whether or not my pension would be at risk , it is the only "asset"I have
I'm not intending to claim it before in at least 65
I'm sorry I don't know how to quote my original message to you
I posted 03.02 @5.27am
I've been in touch with step change very helpful and I wish I'd gone there before going to a fee paying company

Hello,

I'm really glad that you've found our service helpful.

There's a useful (but pretty ugly looking) leaflet from the Insolvency Service about bankruptcy and pensions here: http://www.insolvency.gov.uk/assets/insolvency/docs/publication-pdfs/pension.pdf.

To save you having to wade through it all, in a nutshell, if your pension is in an "approved pension scheme" then you're alright and it won't be included in bankruptcy.

Pensions aren't my strong point but my understanding is that unapproved pensions schemes are generally ones that quite well off people have (the types of people who buy fine wine and artwork as part of their pension plans).

If you're pension is just a standard work related one then I'm confident that it'll be fine. If you're pension is worth many millions then it might be at risk.

All the best

James

hopesanddreams · 22 February 2013 at 4:34PM

I am currently considering declaring myself bankrupt...seems the only way...when completing the living expenses guide it looks like i have a lot of money left over about £220 per month. In reality I never have anything although since I got some proper advice and claimed housing benefit I seem to not be struggling as much as I was. Anybody have any guidelines to the expenses side as don't want to over commit to any payments I would be asked to make. Also can repayments I'm making to friends and family be put on this list.

thanks x

StepChange_James · 22 February 2013 at 5:37PM

hopesanddreams wrote: »

I am currently considering declaring myself bankrupt...seems the only way...when completing the living expenses guide it looks like i have a lot of money left over about £220 per month. In reality I never have anything although since I got some proper advice and claimed housing benefit I seem to not be struggling as much as I was. Anybody have any guidelines to the expenses side as don't want to over commit to any payments I would be asked to make. Also can repayments I'm making to friends and family be put on this list.

thanks x

Hi hopesandreams,

Getting an income and expenditure budget to actually reflect reality can be very tricky. If the number looks wrong then it's a good sign that either something's missing or the numbers are numbers might not be quite right.

It's hard to say without seeing your figures but the areas that are hard to estimate are things like food, transport and clothes. There's also things that are easy to forget like haircuts, saving for Christmas and insurance policies.

Our online advice tool, Debt Remedy will guide you through a budget and suggest figures for some of the areas that are harder to work out. Or if you'd prefer you could give us a call and an advisor will help you plan out your income and outgoings (http://www.stepchange.org/Contactus.aspx).

However you contact us, we'll also be able to advise you on your options. If bankruptcy is the best way forward then we'll talk you through the process and let you know what the next steps are.

Hope this helps.

James

stevetheblindman · 23 February 2013 at 4:41PM

Hi, i have been declared Bankrupt (not voluntary) last march and my only asset is my house, the courts have agreed that my house can be sold and it it due to be repossessed on 19th march. I purchased house for £200,000 and have a mortgage of £125,000 in theory i have £75,000 equity in house. however it is currently valued at £177,000( Building site next door for social housing!) by the recievers handling my bankruptcy say that i can retain my house if i can find £39,000 which is the monies they reckon they will realise from the sale of my house after mortgage paid off. My question is- is this figure negotiable ? I may have the option to borrow from friends and relatives but £39K is probably out of reach to save my house. I probably will not be able to get another mortgage so at 52 its probably my only hope of retaining property ownership. any advise gratefully received.

stevetheblindman · 23 February 2013 at 5:30PM

Hi, i have been declared Bankrupt (not voluntary) last march and my only asset is my house, the courts have agreed that my house can be sold and it it due to be repossessed on 19th march. I purchased house for £200,000 and have a mortgage of £125,000 in theory i have £75,000 equity in house. however it is currently valued at £177,000( Building site next door for social housing!) by the recievers handling my bankruptcy say that i can retain my house if i can find £39,000 which is the monies they reckon they will realise from the sale of my house after mortgage paid off. My question is- is this figure negotiable ? I may have the option to borrow from friends and relatives but £39K is probably out of reach to save my house. I probably will not be able to get another mortgage so at 52 its probably my only hope of retaining property ownership. any advise gratefully received.

StepChange_James · 25 February 2013 at 3:33PM

stevetheblindman wrote: »

Hi, i have been declared Bankrupt (not voluntary) last march and my only asset is my house, the courts have agreed that my house can be sold and it it due to be repossessed on 19th march. I purchased house for £200,000 and have a mortgage of £125,000 in theory i have £75,000 equity in house. however it is currently valued at £177,000( Building site next door for social housing!) by the recievers handling my bankruptcy say that i can retain my house if i can find £39,000 which is the monies they reckon they will realise from the sale of my house after mortgage paid off. My question is- is this figure negotiable ? I may have the option to borrow from friends and relatives but £39K is probably out of reach to save my house. I probably will not be able to get another mortgage so at 52 its probably my only hope of retaining property ownership. any advise gratefully received.

Hi Stevetheblindman,

It is difficult to say. Your official receiver will look at your case on an individual basis and each situation is different. You could always keep trying to negotiate with the official receiver over the figure, explaining to them you wish to keep the property but only have a limited amount of money available. However it is likely that they will try to re-coup as much money as possible so it could be tough to get them to reduce.

Hope this is of some help.

Thanks,

James

Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

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