Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

Raspberry_Ripley · 15 July 2014 at 11:42AM

Thanks for the response Rory.

It would probably be easier for me to take my name off the bank account - I was added when we moved in together and closed my current account. There is a small overdraft facility but it's rarely used.

Just a few other questions if that's ok:

Can my salary (if and/or whilst I remain working) and DLA still be paid into the account that I'm not named on?

I use the mobility portion of my DLA for a Motobility car - will that be affected?

Most of our utilities are in joint names including council tax and contents insurance - can I remain on those?

Former_StepChange_Rory · 15 July 2014 at 1:38PM

Raspberry_Ripley wrote: »

Thanks for the response Rory.

It would probably be easier for me to take my name off the bank account - I was added when we moved in together and closed my current account. There is a small overdraft facility but it's rarely used.

Just a few other questions if that's ok:

Can my salary (if and/or whilst I remain working) and DLA still be paid into the account that I'm not named on?

I use the mobility portion of my DLA for a Motobility car - will that be affected?

Most of our utilities are in joint names including council tax and contents insurance - can I remain on those?

Hi Raspberry Ripley

Removing your name from the account is one option, particularly if there is only a small overdraft or it isn't being used.

Your salary can be paid into someone else's account during the bankruptcy or you can look at opening an account elsewhere such as a credit union. Barclays might also be able to offer you a basic account through bankruptcy so you could look into that too.

Use of any vehicles is always the discretion of the Official Receiver but generally they wouldn't look to end a current motability agreement if you're receiving DLA. If the lease agreement ends between the start and end of the bankruptcy then you might need some extra advice around this which the OR can discuss with you.

Your utility bills should continue as normal and shouldn't disconnect you and any arrears would also be included as debts in the bankruptcy.

I hope this helps again.

Rory

vwcampervan · 15 July 2014 at 7:01PM

hello
could you help me please
I have a mortgage of 76,000 and debts of 44,000
my property is probably worth about £70-80,000
after seven years of trying to keep my head above water
the time has come when i can no longer cope financially or mentally
both of which are now affecting my ability to work

Questions:

can i go bankrupt?
should i go bankrupt?
if i go bankrupt am a able to continue working and will my earnings
be mine? by the way i am a sole trader (carpenter)

I would really appreciate your help

Former_StepChange_Rory · 16 July 2014 at 9:21AM

vwcampervan wrote: »

hello
could you help me please
I have a mortgage of 76,000 and debts of 44,000
my property is probably worth about £70-80,000
after seven years of trying to keep my head above water
the time has come when i can no longer cope financially or mentally
both of which are now affecting my ability to work

Questions:

can i go bankrupt?
should i go bankrupt?
if i go bankrupt am a able to continue working and will my earnings
be mine? by the way i am a sole trader (carpenter)

I would really appreciate your help

Hi vwcampervan

Welcome to the forum.

Sorry to hear about your difficult situation, I can see why you would want to get things back on track as quickly as possible especially if this is affecting your work.

Bankruptcy is just one of many debt solutions that we offer advice on. It's important for us you to make sure you're offered a solution that is based on your personal circumstances and we can help you do this.

I think it would be best to first find out of bankruptcy is the best way forward so that we can offer further support and answer all of the questions you have.

By putting together a budget with us we can look at the whole situation and use all of this to tailor a solution to your needs.

There are two ways you can get free, impartial help from us:

You can use our anonymous Debt Remedy tool available here which will guide you through the process of putting together a budget. Once we have your details we can create a personal action plan explaining how best to deal with your debts.

Alternatively you can call our Helpline by visiting our website www.stepchange.org. Calls to this number are free from landlines and all UK mobiles and we're here 8am to 8pm Monday to Friday and Saturday 8am to 4pm.

I hope this helps, we look forward to speaking to you soon.

Rory

sweetiepie3 · 16 July 2014 at 10:14AM

Hi, I hope I'm in the right place this is my first time using a forum. Anyway, my problem is my ex partner was made bankrupt in 2012. His bankruptcy has been discharged but the trustee still have the deeds to his properties. They have agreed that I own 50% of 1 of the properties which I have a deed of trust to show my share. The trustee have also agreed to sell this property but my bitter ex has quickly moved all the tenants out and moved in with his wife, 2 babies and his 80 year old mother who has a lovely 1 bedroom grd flr flat. He's only been there 4 weeks but claiming it is his family home. Now I'm sure if the trustee have a 50% beneficial interest and I have a 50% beneficial interest will they be classed as squatters ? basically how do we get them out they have 3 other properties which they can move into, 1 being the 3 bed family home they just moved from.

SamLucille · 16 July 2014 at 12:41PM

Dont have to bust a gut to answer as i imagine this is a busy time of year but i am curious to know.

Former_StepChange_Rory · 16 July 2014 at 2:10PM

sweetiepie3 wrote: »

Hi, I hope I'm in the right place this is my first time using a forum. Anyway, my problem is my ex partner was made bankrupt in 2012. His bankruptcy has been discharged but the trustee still have the deeds to his properties. They have agreed that I own 50% of 1 of the properties which I have a deed of trust to show my share. The trustee have also agreed to sell this property but my bitter ex has quickly moved all the tenants out and moved in with his wife, 2 babies and his 80 year old mother who has a lovely 1 bedroom grd flr flat. He's only been there 4 weeks but claiming it is his family home. Now I'm sure if the trustee have a 50% beneficial interest and I have a 50% beneficial interest will they be classed as squatters ? basically how do we get them out they have 3 other properties which they can move into, 1 being the 3 bed family home they just moved from.

Hi Sweetiepie3

Welcome to the forum, you've come to the right place.

In this situation, the Official Receiver would be the best person to speak to as they will have a better understanding of the situation.

The trustee usually deals with any properties around two years and three months after the bankruptcy and if it was agreed that the property is to be sold then your ex-partner would either have to find and pay their share of the property or the house would be sold as agreed.

There are other factors such as the amount of beneficial interest that need to also be discussed in this situation so I would recommend speaking to the Insolvency Service and explaining the situation to them.

You can call them on 0300 678 0015 and they are available 8am to 5pm Monday to Friday.

I hope this helps point you in the right direction,

Rory

kelpie99 · 21 July 2014 at 2:37PM

Hi,

I'm considering a LILA bankruptcy in Scotland as I'm struggling with debt and have been for a long time. I can't actually remember a time since i was 16 where I haven't owed a bank money, whether in work or out of it.

I currently owe assorted creditors around £21000 on unsecured loans/credit cards/overdrafts/loans.

I probably owe HMRC about £7000 on undeclared revenue from a period where I was self employed in 2011-13, most of that figure is made up in penalties, with the actual tax liability being about £1700

I've struggled with mental health issues since teenage years, and the period in question relating to the tax in 2011 I was run over by a car and couldn't work for 3 months, which was also detrimental to my mental health, and in June 2012 I also received a compensation payment of almost £9000 which was also undeclared (I was living abroad at that time).

Currently, I'm 31, have 2 first class degrees, unemployed, and can't even get a minimum wage job. I am looking at college courses and things, and back living at home to try and change this, but for the immediate future I can see no change, and my state of mind is slipping because of the pressure. I've managed to meet payments to date by either using credit (cash advances) or selling what little property I have so there's no debt collection orders in effect or anything, but next month it's not going to happen and I'm scared of several things:

1-my mum's just retired, i'm staying at her address, and i don't want to have bad credit associated with her or impact her credit score (we use different surnames if that makes any difference). Will this happen if I go bankrupt before court orders etc kick in? She doesn't know what state I'm in and doesn't have the means to help.

2. The tax liability: I've calculated this myself, it's something I was too scared to deal with as after the accident I was really struggling both mentally and financially to cope, and then when I got the compensation payment and was working abroad, had to use it to survive as I'd already ran up huge credit card and overdraft debts. I'm going to contact Tax Aid to help me, but how long would HMRC take to finalise the amount owed and initiate repayment proceedings? I'm not on their system as self employed so I suppose this is a voluntary action in the knowledge I'll most likely be declared bankrupt anyway.

3: using credit to repay credit/survive: I've read that before bankruptcy you should keep enough petty cash to survive on without banking facilities and also pay the court fees etc, as well as to open up a new bank account. If I've been withdrawing cash from my credit cards regularly prior to bankruptcy do they look at this and will it be treated differently/adversely and should I just stop immediately and default sooner?

4. As the loans are unsecured and I have no assets do they send someone to audit/verify this?

Thanks for your help and advice.

Former_StepChange_Rory · 21 July 2014 at 3:46PM

kelpie99 wrote: »

Hi,

I'm considering a LILA bankruptcy in Scotland as I'm struggling with debt and have been for a long time. I can't actually remember a time since i was 16 where I haven't owed a bank money, whether in work or out of it.

I currently owe assorted creditors around £21000 on unsecured loans/credit cards/overdrafts/loans.

I probably owe HMRC about £7000 on undeclared revenue from a period where I was self employed in 2011-13, most of that figure is made up in penalties, with the actual tax liability being about £1700

I've struggled with mental health issues since teenage years, and the period in question relating to the tax in 2011 I was run over by a car and couldn't work for 3 months, which was also detrimental to my mental health, and in June 2012 I also received a compensation payment of almost £9000 which was also undeclared (I was living abroad at that time).

Currently, I'm 31, have 2 first class degrees, unemployed, and can't even get a minimum wage job. I am looking at college courses and things, and back living at home to try and change this, but for the immediate future I can see no change, and my state of mind is slipping because of the pressure. I've managed to meet payments to date by either using credit (cash advances) or selling what little property I have so there's no debt collection orders in effect or anything, but next month it's not going to happen and I'm scared of several things:

1-my mum's just retired, i'm staying at her address, and i don't want to have bad credit associated with her or impact her credit score (we use different surnames if that makes any difference). Will this happen if I go bankrupt before court orders etc kick in? She doesn't know what state I'm in and doesn't have the means to help.

2. The tax liability: I've calculated this myself, it's something I was too scared to deal with as after the accident I was really struggling both mentally and financially to cope, and then when I got the compensation payment and was working abroad, had to use it to survive as I'd already ran up huge credit card and overdraft debts. I'm going to contact Tax Aid to help me, but how long would HMRC take to finalise the amount owed and initiate repayment proceedings? I'm not on their system as self employed so I suppose this is a voluntary action in the knowledge I'll most likely be declared bankrupt anyway.

3: using credit to repay credit/survive: I've read that before bankruptcy you should keep enough petty cash to survive on without banking facilities and also pay the court fees etc, as well as to open up a new bank account. If I've been withdrawing cash from my credit cards regularly prior to bankruptcy do they look at this and will it be treated differently/adversely and should I just stop immediately and default sooner?

4. As the loans are unsecured and I have no assets do they send someone to audit/verify this?

Thanks for your help and advice.

Hi Kelpie99,

Thanks for posting. There's quite a few questions here so I'll try to cover the main points for you.

Firstly, your credit rating should not be linked to your address; it’s a common myth that the person you live with or have lived with can impact your credit file. You are only financially linked if you have a joint debt with someone such as a bank account or loan.

The tax debt should be included in the bankruptcy so this isn't something you should need to repay or to worry about once you are bankrupt. In the meantime, treat this debt as a priority as a tax shortfall can lead to further action if left unpaid.

Our advice would always to make sure you have enough money available each month to cover your essential living costs and bills before we would recommend bankruptcy. The reason for this is to make sure that you don’t need to take our any further credit or borrow money to live on once you’re bankrupt as this would be unsustainable. It also shows that without the debts you are able to provide for yourself and manage your money so that you don’t end up in a similar situation in the future.

It’s likely that your accounts will be looked into as part of bankruptcy and this is at the discretion of the Account in Bankruptcy (AiB). This is a normal process though and nothing to be worried about. What is looked into is dependent on your individual situation so it wouldn't be something I could specifically comment on.

The reason why it’s recommended you have some petty cash available is because your accounts are usually frozen for a few days while these checks are being carried out so it’s a good idea to have some money for essentials.

The AiB have the power to look into your affairs and any assets you have. Just make sure you disclose everything asked for on the form and you should be fine.

In any case, we can help see if bankruptcy is your best option and offer you all of the help and support you need. We can help you put together a budget that we use to offer tailored advice and solutions to help you deal with your debts.

If you’re looking for further advice then you can use our free, anonymous Debt Remedy tool available on our website. Alternatively you can speak to us over the phone or arrange a call back here

I hope this helps,

Rory

couldntgetworse · 8 August 2014 at 11:52AM

Hi,

Quick question (hopefully).

I was declared bankrupt in 2010, discharged in 2011 the house was repossessed in 2013 (whilst still with the Official receiver)

My credit file shows a shortfall between the amount outstanding and the auction price, and a default date of approx 3 months ago.

I'm trying to get my file cleared up but am worried this default will be with me for an additional 5 3/4 years. The bank has said that as they were secured (mortgage was being paid) from the date of bankruptcy until repossession that the default date is correct. Is this correct ? (I have got them to agree that the balance should be 0)

Thanks

Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

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