Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Former_StepChange_Rachel · 5 November 2014 at 5:27PM

lil'H wrote: »

Hi all,

Lots of bankruptcy questions. My partner has gotten himself into a complete mess, he was depressed for a period before we met and basically failed to keep on top of everything. He has self assessment years missing for HMRC, VAT owing, HMRC fines, and CIS fines, as well as personal debts to utilities, credit cards etc. He hasn't added to his debts in a couple of years, and once he confessed to me about the mess we have been busy sorting his paperwork. We are almost there with completing his tax returns etc.

Today HMRC contacted and are issuing bankruptcy proceedings. His total debt is in the region of 100k, and he doesn't have any assets so we know bankruptcy is likely to be the only option at this stage and were prepared for this. However we were hoping to have completed the missing tax returns first.

We haven't been able to get any answers to the following from HMRC

The missing tax returns - will they be written off as part of the process ,or do we need to have completed the returns in order for them to be included.
The tax owing for the most recent year (for which payment isn't yet due) will this be written off?
CIS - when bankrupt we understand that he will be on a nil tax code for the year, what happens with payments via CIS scheme?
Will the fines for late submissions and payments be included in the debts written off.

With regard to his payments once bankrupt, he pays maintenance for his children, via a private arrangement not a court order or CSA (as CSA no encourage people to do so privately) will this be allowed to continue, he doesn't want to stop paying towards his child?

Many thanks in advance,
lil'H

Hi there, thank you for getting in touch.

I’m very sorry to hear of the situation you and your partner have been dealing with, and can imagine how very stressful it’s been for you both.

In regards to HMRC petitioning for your partner’s bankruptcy, they would need to have included a balance on the statutory demand that your partner owes. If he is unsure of this may be, he can forward over whatever paperwork he has to hand to them so they can work the figure out.

In regards to the CIS scheme you mentioned, there’s two ways that it could be dealt with moving forward from the bankruptcy:

The employer will pay onto the CIS card as normal, but this money will be forwarded to the Insolvency Service

Or

Your partner will be issued a NIL CIS card which means that it will be your partner’s responsibility to pay the money that would have gone onto the card into an Income Payment Arrangement. The Official Receiver handling the bankruptcy should be able to advise on this.

When it comes to the CSA payments your partner is making, if the current arrangement in place is lower than what would be paid via a court order, this should be allowed to continue.

For more in-depth information, I would recommend you get in touch with TaxAid via their website.

It may also be worth having a chat with the Civil Legal Advice service on 0845 345 4345

I hope this helps

Best regards

Rachel

Former_StepChange_Rachel · 11 November 2014 at 11:32AM

grendel666h wrote: »

Hi,
Not really sure if this is the correct forum, but I'm hoping someone can help.

Our current situation :
In a DMP, estimated end date 2019.
Own a house with an interest only mortgage, standard variable rate
Second mortgage taken out (due to bad advice we now have negative equity)
Due to a job move, had to leave the area. Couldn't sell the house (negative equity), so rent it out and we rent where we live, so what we receive almost pays our rent.

We are doing ok with the DMP, but really need to change the mortgage to a repayment, otherwise they'll want a lot of money when we retire. We pay a small amount extra per month, just to try to get something paid off, but it's not an ideal solution and doesn't bring the amount owing down enough. However, our current mortgage company won't change it without us completing a whole new mortgage application. I asked them if there is a better mortgage than the standard variable, but they said they can't offer us anything, so a new application is very unlikely to be successful.

I looked at my credit file on Credit Expert, which says "Fair", which is not too bad considering. I used their site to match a mortgage to our rating. Someone just phoned me but said because we owe too much, they can't help us.

I think we should really have a buy to let mortgage, but if I mention it to the mortgage company and they say no, we'll be stuck.

Would be grateful for any helpful advice on this.

Thanks.

Hi there, thank you for getting in touch

We wouldn't be able to advise in great detail on buy to let mortgages or mortgage applications in general. The advice we give is focused on unsecured personal debt and the various solutions that may be available. I would advise that you take a look at the mortgage guides available here on MoneySavingExpert, as they have a lot of information that you may find useful.

It's worth keeping in mind however that if you are on a Debt Management Plan, your credit rating is very likely to be affected. This is because you will be paying less than the minimum amount on your unsecured debts while you're paying into the DMP. This will naturally be taken into account when you apply to make changes to your mortgage. You can read more about how being on a DMP affects mortgage applications on our blog.

Best regards

Rachel

jolouis77 · 15 November 2014 at 12:52PM

Hi

I was declared bankrupt nearly 3 years ago and was discharged after 11 months. My partner and I are now considering buying a house together. Can I get a mortgage?

abbieno7_2 · 16 November 2014 at 3:00PM

Hello
Seven years ago I had to declare myself bankrupt and now it seems to be looming again.
I have debts of approximately £16k and these have escalated more since my partner and I split nine months ago.
I am now living with my three children.
When I have done an assessment on the Stepchange website it appears that bankruptcy may be my only viable option but I'm so worried as this would be the second time!
Please can you offer any advice?

Many thanks

Former_StepChange_Rachel · 17 November 2014 at 11:28AM

jolouis77 wrote: »

Hi

I was declared bankrupt nearly 3 years ago and was discharged after 11 months. My partner and I are now considering buying a house together. Can I get a mortgage?

Hi jolouis,

Bankrutpcy stays on your credit file for six years, so it’s still going to show if a mortgage company runs a credit check on you. Without wanting to sound too negative, bankruptcy is something that will make most mortgage lenders wary of lending to you.

There are a lot of other factors that go into applying for a mortgage, so much will depend on things like your income, deposit available and all sorts of other details. Each mortgage company views situations differently too, so it’s hard to be certain.

So in summary, the bankruptcy is likely to count against you in a mortgage application. Whether it rules you out completely will depend on your situation and the current attitudes of mortgage lenders. You might find it useful to check out the MSE mortgage section for more information. It might also help to speak to an independent mortgage broker for advice.

Kind regards

Rachel

steve_28 · 18 November 2014 at 1:31PM

Je ne sais pas si je les ai remplis correctement.
Il demande si il a vendu, transf!r! etc une propri!t! au cours des 5 dernières ann!es et je ne sais pas quoi mettre ou si je dois mettre quoi que ce soit. La maison a !t! reposssed en 2010 et il y avait

Former_StepChange_Rory · 19 November 2014 at 2:56PM

steve_28 wrote: »

Je ne sais pas si je les ai remplis correctement.
Il demande si il a vendu, transf!r! etc une propri!t! au cours des 5 dernières ann!es et je ne sais pas quoi mettre ou si je dois mettre quoi que ce soit. La maison a !t! reposssed en 2010 et il y avait

Hi there,

I think the rest of your message got cut off, so we haven't got a full explanation. Would you be able to send your message again, if you can reply in English this would also be really helpful

Rory

glosguy · 24 November 2014 at 8:31PM

I got a statutory demand from an ex that I borrowed money from £7,500
Since I borrwed the money at the end of 2008 I have paid back just over £4,000. For the last two and half years this has been in conjunction with a county court order where I have never missed a payment even when I was unemployed. Recently I was sent a statutory demand as she now wants to make me bankrupt. I asked for the statutory demand to set aside mainly as I was disputing what I had paid, she has lied blatantly about the amounts. I got a ltter saying it would go before a district judge which it now has but the reply I have from the court is written in legal speak, I think it says it has not been set aside, but I am not sure.
So four questions really
1. The letter says:
" The application to set aside the stautory demand be struck out as disclosing no real prospect of success and wholly without merit, the Applicant conceding that he is unable to pay the jusgement debt to the Respondent and there being no stay of enforcement." What does this mean???
2. What happens now?
3. If she goes ahead how long before my bank account is frozen?
4. What should I do about my wages?

Many Thanks

Worried

Former_StepChange_Rory · 25 November 2014 at 10:28AM

glosguy wrote: »

I got a statutory demand from an ex that I borrowed money from £7,500
Since I borrwed the money at the end of 2008 I have paid back just over £4,000. For the last two and half years this has been in conjunction with a county court order where I have never missed a payment even when I was unemployed. Recently I was sent a statutory demand as she now wants to make me bankrupt. I asked for the statutory demand to set aside mainly as I was disputing what I had paid, she has lied blatantly about the amounts. I got a ltter saying it would go before a district judge which it now has but the reply I have from the court is written in legal speak, I think it says it has not been set aside, but I am not sure.
So four questions really
1. The letter says:
" The application to set aside the stautory demand be struck out as disclosing no real prospect of success and wholly without merit, the Applicant conceding that he is unable to pay the jusgement debt to the Respondent and there being no stay of enforcement." What does this mean???
2. What happens now?
3. If she goes ahead how long before my bank account is frozen?
4. What should I do about my wages?

Many Thanks

Worried

Hi there,

With any statutory demand it's always a good idea to get some free, impartial advice on what to do next.

Because time might now be limited I'd really recommend that you contact us so we can discuss your options and offer our advice.

You can find details of how to speak to us on the StepChange website.

We look forward to speaking to you soon.

Rory

badger12 · 26 November 2014 at 9:12PM

Hi
In July 2007 I entered a TD at £100 per month. In the November I was phoned and told one bank wouldn't accept the TD and the people handling my case said I should go Bankrupt - which they dealt with. I paid the TD amount til Nov 2010. I have never had any paperwork from them to say what was going on. I rang them in the Nov to ask if I could cancel my DD. The chap on the phone didn't say he'd need to look at a file or anything he just said "yes".....

Is this normal?

Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free