Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

egrescrimp · 17 June 2014 at 6:06PM

LEGC wrote: »

Thanks for the replies.
I owe on a barclaycard, they told me they no longer allow even a basic account if you owe them anything anywhere.
I will try nat west first

Don't rely on Natwest allowing the account to run after you are made bankrupt, currently the co-op and Barclays are the only bankrupt friendly banks. You might be one of the lucky ones who they let have an account after bankruptcy and just because the in branch staff may say they don't have a problem with the account staying open, doesn't mean someone in an office who knows nothing about you and you will never personally be able to get hold of won't shut down your bank account.

debtinfo · 17 June 2014 at 6:56PM

LEGC wrote: »

Thanks for the replies.
I owe on a barclaycard, they told me they no longer allow even a basic account if you owe them anything anywhere.
I will try nat west first

Who told you that, was it in the branch etc etc. that is not normally the case and would be a big change in the companies position.

fermi · 17 June 2014 at 7:00PM

Allegedly, according to stepchange....... :undecided :think:

StepChange_James wrote: »

Hello everyone,

I think there might have been a bit of confusion on this, hopefully I can clear things up a little bit.

There are two things I’ll try to address.

1. Barclays/Barclaycard right of offset (when not going bankrupt)

Barclays and Barclaycard operate under different credit licences but they are seen by the Bank of England as the same bank and are entitled to use the right of offset. We’ve talked to people who’ve had money taken out of Barclays accounts for Barclaycard debts through the right of offset, so we know this does sometimes happen. If someone has gone bankrupt then Barclays wouldn’t be able to take money from an account as the debt would be part of the bankruptcy.

2. What happens to a Barclays bank account when you go bankrupt with Barclays debts

Barclays are currently the only high-street bank that will offer bank accounts to undischarged bankrupts. They’ve told us recently that they’ll shut accounts down if the person going bankrupt had Barclays debts (including Barclaycard). In practice this might not happen in every case but if they know there are Barclays debts included in the bankruptcy they’re likely to close the account down.

So we’d recommend not relying on a Barclays Cashcard account staying open after bankruptcy if you’ve got Barclays debts.

Sorry if there was any confusion with the earlier messages, let me know if there’s anything that doesn’t make sense now.

Kind regards

James

StepChange_James · 19 June 2014 at 10:56AM

mofski wrote: »

Hello,
I am considering bankruptcy and would appreciate some advice. I have tried to complete the online form on the stepchange website, but it won't let me proceed as I have no income and no priority bills. My husband is working and since I finished work in March, his income has been running the house. I have been on antidepressants for the last 8 months and gave up my job in March when my doctor told me that I couldn't possibly go back to the place I was working at, as that's what made me ill in the first place. I had applied for redundancy there, but after being approved, it then fell through, so I felt there was no option but to resign. I was hoping that once I resigned from there, I would quickly get back to normal and get a new job. Unfortunately, my depression has not lifted and I am unable to contemplate looking for work in the foreseeable future.
My husband and I have separate bank accounts and he has been very supportive since I finished work and has been running the house on his sole wage. When I finished work, I got holiday pay, so for April and May, I was able to cover my debts with this money. This month, I have no income and no way to pay my debts.
I had my house repossessed 19 years ago and owe about £35,000 still on this. I have 2 credit cards, which are both closed, but have monthly interest added to them. I owe about £18,500 in total on these and have been paying £450 p/m to them just to tread water. On one of the cards I have paid the company about £36,000 over the last 10 years and have cleared about £250 in total off the balance.
I also owe about £4000 authorised overdraft with my bank account.
The situation is making me depressed and my depression is making me unable to get a job, so its a vicious circle.
All of the household bills are up to date. We rent our place from the council, but the tenancy is in my husband's name, as he was already living here when we met.
I don't have any assets. My husband owns a car and I am named on the insurance docs as a named driver, but he needs the car to get to work (we live in a village and there is no public transport).
My 21 year old daughter also lives with us and she works, but doesn't pay any board. She buys her own food and picks up shopping for us if we need it and takes us out for meals and gives my husband petrol money as he takes her to work in his car.
I have printed the form off to apply for bankruptcy, but my head is boggled with it. Could you please give me help on the following:
1)Am I likely to have a bankruptcy granted, or could it be refused?
2) Would my husband be liable to pay any of my debts?
3) The form asks for the total household income but I don't know what my husband or daughter earn. We have always kept our own bank accounts and my husband does all of the bill paying, due to me having debts when we met. What can I say on the form?
4) On the form it asks if I have the use of a car. As I'm named on the insurance docs, does this mean I say yes, even though I don't drive it and it doesn't belong to me? Can my husband be made to sell his car to clear my debts?

Please help. Many thanks, Mofski

Hi Mofski,

Apologies for the delay in reply, but I think longtermplanner's response answered all of your questions really well and I don't think there's much for me to add to those answers.

If you'd like a bit more help and support through the bankruptcy process then it might be worth giving our helpline a call. Speaking to an advisor should mean we can work out a way to put together a budget that will mean we can give you some advice, even if the income and outgoings are both fairly minimal.

Here's the link to our contact page: http://www.stepchange.org/Contactus.aspx. If we recommend bankruptcy then we'll give you a contact number for our bankruptcy support team and they'll be able to help you with the forms and the process. We also have an article on our blog to help with filling out the forms: http://moneyaware.co.uk/template-letters-court-forms/how-do-i-fill-in-my-bankruptcy-forms/.

All the best.

James

StepChange_James · 19 June 2014 at 11:07AM

speedyblue66 wrote: »

I'm two weeks away from my 12 months discharge and need some advice.
I want to rebuild my credit in a correct and responsible way, however I'm in desperate need of replacing my car. After doing some research I'm thinking of looking into car finance for an amount of around £3,500 over around 48 months. I fully understand that it will be costly, but I can now afford to manage to do this and hopefully repair the damage to my credit status (although I won't be applying for anything else whilst paying for a car).

When would be the best time for me to start to enquire or apply for possible car finance? I understand that this is one way of building up my credit status, and I really am in need of replacing my car as soon as possible and definitely by the end of August.

Thanks a lot.

Hello,

I doubt you would, but I'd strongly recommend against applying for a loan until you've been discharged. Otherwise I'm not sure there's much I can suggest in terms of timing.

Your bankruptcy will stay on your credit history for six years from the date you went bankrupt so that's likely to put off potential lenders when you apply for credit.

Having small amounts of credit and repaying them regularly is one of the tactics people use to try and build up a record of responsible credit use to try and improve their credit rating. There are a few more tips on boosting your credit score here: http://www.moneysavingexpert.com/loans/credit-rating-credit-score?_ga=1.35667616.1252630461.1388657110#improve.

The tricky thing is that these steps won't remove the bankruptcy from your file, so even if you're doing everything else right you could still find it hard to get credit after your discharge.

All the best

James

StepChange_James · 19 June 2014 at 11:16AM

LEGC wrote: »

Hello I'm new to all of this
I have spoken to step change and have decided bankruptcy is the only option.

I know I have to close my current account but I owe Barclays money so they won't let me open a basic account with them

My local credit unions don't do current accounts and you can't join another one.

My only option that I can see is for somebody else to open a bank account and for me to use it but is that possible? I don't want to be committing fraud as well as everything else that is going on!

Thanks for your help.

Hi there,

Thanks for posting.

There's nothing wrong with using someone else's bank account to pay money into after bankruptcy. For some people it's their only option. Obviously it's important to make sure you trust the person named on the account not to take your money without your permission.

If you start to use someone else's account before bankruptcy then you'll need to make a note of this in the ‘Cash held by anyone for you’ area of section 3 of Form 6.28 (the main bankruptcy application form), and the Official Receiver may request bank statements as proof.

Kind regards

James

yknivag · 20 June 2014 at 12:24PM

A little while ago I asked the question below in another thread, I just wondered if any of the experts here may have any other comments.

yknivag wrote: »

I am currently in the process of completing forms 6.27 and 6.28 ready to file for bankruptcy having confirmed with the CAB that I have no other choice in my current circumstances.

I have three issues and I hope someone here can help...

1. Two years ago I "bought" my Dad's then house for £1 to allow him to move into sheltered accomodation on the explicit understanding that when it was sold on the open market later on the full market value would pass to my father (ie I had no "beneficial interest"). Since then I have encountered significant changes in my own circumstances and transfered the house to my brother for £0 on the same basis - that once it has sold on the open market the full value passes directly to my father. Now this was all done informally as it was in the family - there was no deed of trust. Will the OR wish to restore the house to me from my brother and sell it to pay into my bankruptcy? (Since the transfer to my brother the house has actually partially collapsed and currently has no realisable value on the open market!)

2. As things stand I have not been able to run my car for some time and have transferred the ownership of it to my partner on the understanding that if he pays the running costs I will use it to teach him to drive. For his part my partner paid all my moving costs and is paying all the household expenses. Not only that he has paid out significant running and repair costs. As the transfer was made not for ready cash is the OR likely to want to reverse this and sell the car? Even though it's value is less that the "consideration" given by my partner in return?

3. I am struggling with two areas of form 6.28. Firstly what assets to I have to explicitly list? The guidance says everything (including bedding and clothing etc) but really do I need to count my pairs of socks? Or is it only items of any "significant" value? I have very few assets, even my computer I bought for £85 8 years ago - so I'm not sure it will be worth anything on resale now. Lastly, in the household expenses section (7.1), I make no contribution to anything following the agreement with my partner about the car. Do I simply put £0 in all the boxes and expand on the last page?

Apologies if there are obvious answers to any of these things, I've been going round in circles for about 6 months now trying to get everything together for bankruptcy and maybe I'm no longer seeing the obvious.

Many thanks in advance for your help.

Gavin.

There has been a development on the first question, in that my brother has now begun proceedings to sell the property to a developer for £11k (with any proceeds after fees going directly to my father).

StepChange_Private_Messages · 23 June 2014 at 2:25PM

yknivag wrote: »

A little while ago I asked the question below in another thread, I just wondered if any of the experts here may have any other comments.

There has been a development on the first question, in that my brother has now begun proceedings to sell the property to a developer for £11k (with any proceeds after fees going directly to my father).

Hi there Gavin, thanks for getting in touch.

1. If the OR suspects a valuable asset has been sold for less than its true value then they may look to reverse transactions and sell the asset. It’s hard to know exactly what the decision will be in your case but I’d recommend giving as much information as possible and being up front about it all, then the OR will be able to give you their decision.

2. The same principle applies with the car. If you’ve been repaid for the car by having your living costs supported by your partner then I suppose that’s a kind of payment but it might be hard to prove this to the OR. Again, I’d recommend giving as much information as possible to the OR about the arrangement with the car.

3. All you need to do is answer the questions in the relevant sections. There’s no need to list ordinary household goods such as clothing, bedding, utensils etc – it’s only things of significant value such as high-end electric goods, antiques, money owed to you by a third party etc that need to be listed. The OR’s are very thorough and if they need a bit more information from you they will let you know.

It might be a good idea to get in touch with the Insolvency Service as may be able to provide you with more in-depth information moving forward - https://www.gov.uk/government/organisations/insolvency-service

Hope this helps

Best regards

Rachel

Red08 · 24 June 2014 at 8:15PM

Hi,

I am currently under DRO till feb'15 I have found out from my social housing landlord I am entitled and expecting to start negotiating compensation for damages to my health caused by their negligence in the next few months, how will this affect my DRO? Are there thresholds to what i can receive or will I have to forefit some of it towards the DRO?

Many Thanks

StepChange_Pavan · 25 June 2014 at 11:07AM

Saz07 wrote: »

Hi,

I am currently under DRO till feb'15 I have found out from my social housing landlord I am entitled and expecting to start negotiating compensation for damages to my health caused by their negligence in the next few months, how will this affect my DRO? Are there thresholds to what i can receive or will I have to forefit some of it towards the DRO?

Many Thanks

Hi there and thanks for your question.

It’s difficult to say how it’s likely to affect you without knowing how much you’ll be entitled to. I’d recommend that you speak to your Official Receiver once you know roughly how much it’s likely to be and they’ll be able to advise you in more detail.

Kind regards,
Pavan

Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

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