Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

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  • Former_StepChange_Richard
    Former_StepChange_Richard Posts: 119 Organisation Representative
    kelpie99 wrote: »
    Hi,

    I was sequestered in February and had a trustee appointed then.

    At the time I was on universal credit, and looking for work so my repayment was set at £0. I was forced to move in July and updated my address soon after and on Saturday just got what feels like quite an aggressive letter from the trustee telling me I hadn't submitted a form that they sent me detailing my income and expenditure, citing their ability to issue a compliance order.

    I'm sure I sent this to them in February and if they are just checking that my circumstances haven't changed think it might just have been sent to my old address, but it's worrying me as at the same time as I moved (start of July) I was offered some one-off work for an annual exhibition/festival on a self-employed basis.

    I did the right thing and closed my Universal Credit claim off before doing it, and will now be re-applying for these benefits as I'm effectively unemployed again and I don't intend to keep acting as self-employed as it was a one-off and I won't pass the individual small earnings allowance of £5950 with regards to National Insurance contributions etc. and although I was happy to be working my mental health has not been great and I've been several times to the doctors concerning stress and anxiety levels and the impact that's having on my overall health.

    However, because of the timing of the trustees letter I'm worried about how this will look to them and if they will assume that my earnings over these two months are representative of my future earnings, as they are not. If anything, it would enhance my monthly income over the year to about £800 from £612, assuming I receive the same benefits. I don't feel like this represents 'extra' income as I was barely able to get by on my income support and living in sub-standard accommodation as a result (again, documented by medical treatment) and my new flat is consequently more expensive.

    Am I going to be expected to justify all of the above and how much scrutiny will they pay to these changes given that I am still living on a very limited income?

    Hi there

    Thanks for your message. I appreciate how stressful dealing with these situations can be, but you've come the right place and I'll do my best to help.

    I think you have explained your situation really well in your message and I think it would be hard for a trustee to view your situation in any other way. The important step now would be to explain this to them to avoid any further repercussions like you mention.

    It's difficult to say how much they will expect you to justify your situation or even if they will inquire at all. But as you mention, you have done everything that was required of you in terms of benefit claims and I'm sure, if required, you could get documents to evidence your situation.

    It is important to comply with the trustee and remember, they aren't there just to check up on you, but also to make sure you get the correct service throughout the sequestration.

    I hope this helps. Please let us know if there's anything else we can do for you.

    Take care
    Richard
    I work as a debt advisor for StepChange Debt Charity and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy.

    Don't be afraid of getting debt advice. We'll help you take one more step towards getting help with your debt.
  • I am discharged from banckruptcy and it's been 5 years now.i still live in my home owned with my husband jointly.on my land registry there is a restriction notice from the trustee.im not entirely sure at this stage what this means. Can you help?
  • Former_StepChange_Richard
    Former_StepChange_Richard Posts: 119 Organisation Representative
    Mich81 wrote: »
    Hi can someone please help?

    My partner has walked out on me, and I have 20k of unsecured debt.

    I'd been managing ok, but now I have to cover all the house bills alone which means I don't have enough to cover those and my debts.

    He's taken his name from our joint account so we're no longer financially linked, but I don't know if he's changed all his details to his parents house yet - will this matter if I want to go bankrupt? I don't want them to think he's still living here, but they can come and check if they want too.

    I've nowhere else to go, so I'm stuck here paying all the bills and a big loan which I stupidly took out to consolidate both our debts :(

    Hi there

    Thanks for getting in touch in what sounds like a really difficult time. Please try not to worry though as we'll definitely be able to help.

    The first thing we need to do is to work out how much your essential living costs are to make sure you can pay the most important things first. Once we've looked at that, we can then consider the debts you have and work out the best plan of action to deal with these.

    Bankruptcy is a great tool to help people with debts that they're unable to pay back in a reasonable period of time, but it's not for everyone and we need to check it's right for you. If it's not, we can find what is the best solution for your debts.

    We can help you to build a budget that shows what is happening with your finances currently. Once this is complete we can then advise you on the best way to deal with your debts. You can use our self-help Debt Remedy tool on our website if you have access. This will allow you to make your budget and access your advice in your own time.

    Alternatively, you can call and speak with one of our advisors who can make the budget for you and then give you your advice. All our contact details are available here.

    To answer your question; your partner's 'details' being changed or not will not prevent you from applying for bankruptcy. I'm not 100% sure what details we're talking about, but there's none that I can think that would stop this.

    I hope this helps and we look forward to hearing from you.

    Take care
    Richard
    I work as a debt advisor for StepChange Debt Charity and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy.

    Don't be afraid of getting debt advice. We'll help you take one more step towards getting help with your debt.
  • StepChange_Rachael
    StepChange_Rachael Posts: 375
    First Anniversary First Post
    Organisation Representative
    Hi

    Welcome to the forum and thanks for posting.

    When there's a property involved in Bankruptcy whether it is sole or jointly owned, it is likely to form part of the Bankruptcy.

    A restriction is put on the property by the Official Receiver (OR) usually for 3 years; this allows them 2 years 3 months to decide what to do with the property and 9 months if they decide to release the equity, possibly by forcing sale of the property.

    The restriction also allows the Land Registry to inform the OR if the property is sold (if jointly owned). Properties owned solely by the Bankrupt would not allow to be sold during this time.

    Normally after this 3 year period the OR will have decided how to proceed with the property and if the Bankrupt is able to remain in the property the restriction would be removed.

    The OR can apply for further restrictions in bankruptcy which could pro long the length of Bankruptcy restrictions.

    To find out where you stand with the restriction on the property I’d suggest contacting the insolvency service you can find their contact details here.

    Thanks
    Rachael

    I am discharged from banckruptcy and it's been 5 years now.i still live in my home owned with my husband jointly.on my land registry there is a restriction notice from the trustee.im not entirely sure at this stage what this means. Can you help?
  • Hi there

    Thanks for your message. I appreciate how stressful dealing with these situations can be, but you've come the right place and I'll do my best to help.

    I think you have explained your situation really well in your message and I think it would be hard for a trustee to view your situation in any other way. The important step now would be to explain this to them to avoid any further repercussions like you mention.

    It's difficult to say how much they will expect you to justify your situation or even if they will inquire at all. But as you mention, you have done everything that was required of you in terms of benefit claims and I'm sure, if required, you could get documents to evidence your situation.

    It is important to comply with the trustee and remember, they aren't there just to check up on you, but also to make sure you get the correct service throughout the sequestration.

    I hope this helps. Please let us know if there's anything else we can do for you.

    Take care
    Richard

    Hi Richard,

    Thank you for this. I spoke to them and they said that I should fill in the budget once I have a letter from the DWP confirming my benefits, which has put my mind at rest to a point.

    Another thing you might be able to help me with is that as I'm struggling to find paid work I was thinking about entering education in order to improve my prospects.

    If I were to do so would the AiB look upon this poorly as if I was choosing not to earn and extend my bankruptcy, and would they potentially look at any scholarship or student loans (assuming I'm eligible) as income that could be appropriated to repay creditors?

    With the effect that bankruptcy and unemployment is having on my mental health I'd feel much better doing something rather than nothing but don't want to end up in court for trying to get a better education.

    Thanks in advance for any advice/insight you can offer.
  • StepChange_Allen
    StepChange_Allen Posts: 352
    First Anniversary First Post
    Organisation Representative
    kelpie99 wrote: »
    Hi Richard,

    Thank you for this. I spoke to them and they said that I should fill in the budget once I have a letter from the DWP confirming my benefits, which has put my mind at rest to a point.

    Another thing you might be able to help me with is that as I'm struggling to find paid work I was thinking about entering education in order to improve my prospects.

    If I were to do so would the AiB look upon this poorly as if I was choosing not to earn and extend my bankruptcy, and would they potentially look at any scholarship or student loans (assuming I'm eligible) as income that could be appropriated to repay creditors?

    With the effect that bankruptcy and unemployment is having on my mental health I'd feel much better doing something rather than nothing but don't want to end up in court for trying to get a better education.

    Thanks in advance for any advice/insight you can offer.

    Hello

    Thanks for your reply.

    I'm glad that the AiB's response has eased your worries a little bit. I completely understand your questions about further education and the concerns about that income being taken into account, though it's great that you want to extend your education. If I was to answer them with any certainty it would only be speculation really because it's difficult to know how the AiB would view these things. I'm happy to offer a few basic thoughts though.

    I'd recommend giving the AiB a call and being completely honest about wanting to seek further education, and whether they'd have any issue with this. I can't think of anything myself, especially as you're not currently working or paying anything into the sequestration anyway, but I can't be sure.

    Regarding any money you might receive in terms of student finance, I think it would likely depend on how your budget looked then. For example, you might lose benefits if you got a scholarship, and your expenses might change. Again, there's no harm in asking the AiB the question in theory to see what they say.

    I'd certainly recommend you speak with them before taking any decisions that will affect your finances whilst in the sequestration.

    Sorry that it's a bit vague, but I don't want to mislead you on anything that's difficult for us to predict. I hope that they can put your mind at rest further if you give them a call.

    Allen
    I work as a debt advisor for StepChange Debt Charity and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy.

    Don't be afraid of getting debt advice. We'll help you take one more step towards getting help with your debt.
  • SivEd
    SivEd Posts: 53 Forumite
    Hi there,

    I went BR back in 2009 and was discharged in September 2010. I bought my house in 2005.

    I had an unsecured loan that was part of my mortgage. The legal department of my mortgage company has just written to me asking that I resume payments on that loan.

    I kept my house, when I went bankrupt, because of the recession (negative equity), instead, the OR has put a 10k charge on the house for when I sell it in the future.

    The total bankruptcy was 60k, that included the OR fees, which were 10k in themselves. Most of it I repaid through an inheritance I received during my bankruptcy that went directly to the OR. What wasn't repaid this way was put on the house as the charge.

    The house was paid for by a combined product which was common in the mid naughties (2005 in my case). It was split into two parts. Most of it was a normal repayment mortgage, but about 15k was an unsecured loan. It amounted to about 105% of the house price (extra used for some fixing up and appliances).

    The letter I just got from my mortgage company is from their litigation department and refers to the unsecured loan part of the debt.

    When I went bankrupt, I continued paying my mortgage and this loan. But after a couple of years I was advised that I did not need to repay the loan as it would have been automatically included in my BR. So I stopped paying this part of the debt in 2011, 20 months after my bankruptcy. The mortgage company didn't chase then.

    I don't understand why, after six years they are trying to get me to repay this loan from before my bankruptcy? They have worded it very politely, like it is just an overdue payment, not something they haven't even been chasing for years and years and is crazily overdue!

    What should I do? Write to them telling them to speak to the OR?

    Thanks for any help you can give.
  • StepChange_Rachael
    StepChange_Rachael Posts: 375
    First Anniversary First Post
    Organisation Representative
    Hi

    Thanks for your post.

    I know of that type of mortgage and as part of it is an unsecured debt it’s my understanding that it’d be included in your Bankruptcy and the mortgage company wouldn’t be able to collect for the debt.

    As you’ve mentioned during your Bankruptcy you received inheritance which went to the Official Receiver (OR) and would have formed part of the Bankruptcy. This is also something to bear in mind as I’d assume some of this debt would have been paid in to it.

    As the terms are agreed with the OR and without knowing the details of the Bankruptcy I wouldn’t be able to advise accurately.

    I’d suggest contacting the OR as they’ll be able to tell you exactly what the terms of the Bankruptcy are and how to proceed with the mortgage company.

    You could also contact the Insolvency Service who’ll be able to give you further advice on the terms of insolvency.

    Thanks
    Rachael

    SivEd wrote: »
    Hi there,

    I went BR back in 2009 and was discharged in September 2010. I bought my house in 2005.

    I had an unsecured loan that was part of my mortgage. The legal department of my mortgage company has just written to me asking that I resume payments on that loan.

    I kept my house, when I went bankrupt, because of the recession (negative equity), instead, the OR has put a 10k charge on the house for when I sell it in the future.

    The total bankruptcy was 60k, that included the OR fees, which were 10k in themselves. Most of it I repaid through an inheritance I received during my bankruptcy that went directly to the OR. What wasn't repaid this way was put on the house as the charge.

    The house was paid for by a combined product which was common in the mid naughties (2005 in my case). It was split into two parts. Most of it was a normal repayment mortgage, but about 15k was an unsecured loan. It amounted to about 105% of the house price (extra used for some fixing up and appliances).

    The letter I just got from my mortgage company is from their litigation department and refers to the unsecured loan part of the debt.

    When I went bankrupt, I continued paying my mortgage and this loan. But after a couple of years I was advised that I did not need to repay the loan as it would have been automatically included in my BR. So I stopped paying this part of the debt in 2011, 20 months after my bankruptcy. The mortgage company didn't chase then.

    I don't understand why, after six years they are trying to get me to repay this loan from before my bankruptcy? They have worded it very politely, like it is just an overdue payment, not something they haven't even been chasing for years and years and is crazily overdue!

    What should I do? Write to them telling them to speak to the OR?

    Thanks for any help you can give.
  • Good morning,

    I'm in the process of deciding whether an IVA or Bankruptcy is best for me. I've got just over £25,000 of debt and after paying everything out (bills, travel etc), I will have about £100 free per month towards any payment.

    Regarding Bankruptcy and assets - I don't really have any, apart from say a blu-ray player and LCD TV (not that expensive). My wife has a car, which is in her name and that she has a loan for, so I gather that my wife's car is not an asset for me.

    Today I'm going to go through my finances etc with a Stepchange IVA adviser but part of me feels Bankruptcy might be the best option.

    Many thanks.
    Remember, an Aardvark is not just for Christmas....
  • Hi everyone,

    I could really really do with some advice as I am constantly thinking about this.

    I have gotten myself into a right mess financially from being stupid over the years.

    I have the following debts

    Loan that ends next year with £3800 outstanding

    Loan with £12500 outstanding for another 4 years

    Credit card with a balance of £9500

    Credit card with £2700 on it

    Credit card with £1900 on it

    My car which has 1 years finance left on it £120

    And finally I pay my mum £320 a month for £11000 she lent me.

    My payments equate to over £1300 a month.

    With my line of work I get a bonus some months, however when I don't, my wage does not over my outgoings (including rent, bills etc) and o rely on money that my partner gives me to cover half the household bills. However if I get paid my basic salary that leave me with £50 a week to live off, for food, petrol etc etc.

    I am on a good salary, just short of 30k a year and my partner works part time but takes on extra hours where possible.

    I really don't know what to do.

    I am registered diabetic, and I am worried they will tell me I can't have the gym membership (£20 a month) or take my car away which I rely on for work. My car is worth less than £2000 but would they take it away with a years left on the finance?

    Also the £320 I pay my mum each month for the loan she gave me will that be considered?

    Am I able to declare bankruptcy and still pay my mum, and for my car.

    Also I was wondering what amount they would consider to leave me with to live on after being accepted for bankruptcy? What is the norm? As I'm on a good wage I don't know how it would work?

    Would you consider my case as a BR case?

    I would appreciate any help were possible. Part of me thinks wait a year until one of my loans is clear and my car is paid as it frees me up £400 a month but it's really a struggle at the moment that I cannot have any sort of quality of life on the money I am left with.

    Plus it worries me my health will be affected being diabetic?

    Any advice is appreciated
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