Working during Bankruptcy

gman1980 · 6 July 2017 at 1:24PM

Hi,
My wife is an undischarged bankrupt ( discharge due in Jan 2018). I understand that she can work during the bankruptcy period. I have become self employed recently and planning to make her as employee. We know we have to let the OR know about any changes in circumstances.
Here are some of the questions that comes across my mind. Would really appreciate if someone could clarify
1) Is there any minimum amount that I need to pay her. My accountant worked out she could get £800 net as salary per month.
2) can the OR take anything from this salary for paying off debts?
3) We can certainly show that the entire amount will go to the household share ( Rent itself will come to £300 per person) and £500 for the remaining such as Food, groceries, utility bills etc.

Regards
GM

BrightLights14 · 6 July 2017 at 2:41PM

Hi! Definitely not the best person to advise as many here have much more knowledge than me on these things but as no-one seems to be replying:

1) You'll need to pay her minimum wage
2) Yes - if there's a surplus once all the essentials are accounted for, the OR will want this as part of an IPA which will last for 3 years (I think)
3) If that's the case, then she should be OK, but really what's the point? If I were her I'd sit tight until discharge, avoid an IPA and find work next year. If there's no surplus income when her bankruptcy is discharged it'll all be over in as little as 6 months!

Good luck to you both.

IAmWales · 6 July 2017 at 3:22PM

BrightLights14 wrote: »

Hi! Definitely not the best person to advise as many here have much more knowledge than me on these things but as no-one seems to be replying:

1) You'll need to pay her minimum wage
2) Yes - if there's a surplus once all the essentials are accounted for, the OR will want this as part of an IPA which will last for 3 years (I think)
3) If that's the case, then she should be OK, but really what's the point? If I were her I'd sit tight until discharge, avoid an IPA and find work next year. If there's no surplus income when her bankruptcy is discharged it'll all be over in as little as 6 months!

Good luck to you both.

You're suggesting someone chooses to take a year off work for the sole purpose of avoiding paying their debts?

It's people like you that give all the genuine, honest bankrupts a bad name

TheGardener · 6 July 2017 at 3:42PM

IAmWales wrote: »

You're suggesting someone chooses to take a year off work for the sole purpose of avoiding paying their debts?

It's people like you that give all the genuine, honest bankrupts a bad name

Sorry but this board is for support - not judgement. Please don't post comments like this, they are not helpful. We will assume you were unaware of this rule in this instance...?

BR's don't have any debts - that's the point of BR.

OP - As the employer, you must pay the legal minimum wage.
Your wife must then tell the OR within 21 days of it happening - about any change of circumstances. The OR will expect her to complete an SoA and then determine if there is any surplus available for an IPA.
There are hundreds of posts on here that will give you some indication of the amount the OR will allow for certain expenses. The key thing is that the OR will expect a 50/50 split on household expenses UNLESS you prove otherwise. The OR will judge based on % so for example: if you earn 20% more than your partner - then you would be expected to pay 20% more towards household expenses.
It isn't about saying - well she spends it on x and y - you have to work within the OR's guidance of what and how much is reasonable.

peterkay369 · 6 July 2017 at 3:46PM

IAmWales wrote: »

You're suggesting someone chooses to take a year off work for the sole purpose of avoiding paying their debts?

It's people like you that give all the genuine, honest bankrupts a bad name

I have to disagree with you I'm afraid and my opinion would pretty much echo that of BrightLights'.
With all due respect, I doubt the vast majority of people intend to go bankrupt - I know I didn't. Yes, there are a few people that completely exploit the system for mega money however I don't think that this is what the OP is intending to do. If it's better for someone in the long run to take a year out then I don't see it as bad advice.

I haven't been given an IPA, and have been offered a promotion within the company in a much higher paid position however I've chosen to decline the offer because it means financially I will be a lot worse off and there is no point at all in me accepting it. Does that make me a bad person? Not in my eyes.

Keen to hear your thoughts on this though, it's an interesting topic for debate! :beer:

davemorton · 6 July 2017 at 4:25PM

peterkay369 wrote: »

I have to disagree with you I'm afraid and my opinion would pretty much echo that of BrightLights'.
With all due respect, I doubt the vast majority of people intend to go bankrupt - I know I didn't. Yes, there are a few people that completely exploit the system for mega money however I don't think that this is what the OP is intending to do. If it's better for someone in the long run to take a year out then I don't see it as bad advice.

I haven't been given an IPA, and have been offered a promotion within the company in a much higher paid position however I've chosen to decline the offer because it means financially I will be a lot worse off and there is no point at all in me accepting it. Does that make me a bad person? Not in my eyes.

Keen to hear your thoughts on this though, it's an interesting topic for debate! :beer:

Wouldnt it make sense to take the promotion, as that would enable you to pay back some of the money you borrowed from people, and in the long run, would it not aid yourself?

peterkay369 · 6 July 2017 at 4:55PM

davemorton wrote: »

Wouldnt it make sense to take the promotion, as that would enable you to pay back some of the money you borrowed from people, and in the long run, would it not aid yourself?

The IPA would be that small that I highly doubt any money would make it to the creditors and would just fund the IS.

It would not aid me at all, if anything it will be worse off for me as it means I will have to go for another 2-3 years with no surplus income.

luvchocolate · 6 July 2017 at 5:15PM

I totally agree most crediters do not receive any of the money as the O.R fees take priority.
The bill for my trustee was over £24,000

Thomas_The_Tank_Top · 6 July 2017 at 5:27PM

TheGardener wrote: »

Sorry but this board is for support - not judgement. Please don't post comments like this, they are not helpful.

The only sin on this board IS to be judgemental.

BrightLights14 · 6 July 2017 at 6:00PM

IAmWales wrote: »

It's people like you that give all the genuine, honest bankrupts a bad name

Excuse me? How is someone who's half way through a 5 year DMP, which has been one hell of a long slog, giving honest bankrupts a bad name? It's very common for people to take time off work or study during bankruptcy to avoid crippling IPAs that last much longer than the 12 month term. After that, they can get a job that and pay taxes and contribute to the public pot, rather than working all hours just line the ORs pockets. That absolutely does not make someone a bad person. Bankruptcy is not a punishment, it's a relief and a fresh start after what I can imagine (having never been there myself, hence not being the 'dishonest bankrupt' you so self-righteously suggested I was) was a horrendously tough time.

Care to give the OP any advice or did you just come here to bring judgement and condemnation?

Ridiculous.

gman1980 · 6 July 2017 at 7:04PM

Hi,
Many thanks for your kind words, didnt want to create a debate over it. As brightlights pointed out, I certainly thought not putting as employee until she gets discharged. However, paying her 800 or however much lesser or more to her wont make me save much in tax( if thats what anyone thinks). its just that I thought morally this is what the situation is and didnt want to hide anything, above all , making amends for how we got into this in the first place.

Working during Bankruptcy

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