Hep with bankruptcy please?

GW17 wrote: »

Hi please could someone help?

My husband is contemplating bankruptcy...he has debts of approx £50,000 in his name on credit cards/loans. We own no property and live in rented accommodation. I have dependant children that live with us from a previous relationship.

I have some questions that I'm hoping you can help with?

1) How will The OR look at my husbands income/expenditure? He obviously has to contribute to the cost of the house and kids? Will they want to know my income/expenditure too? How does it work with household income/outgoings when only he is going bankrupt and NOT both of us? The OR would likely ask for a household budget sheet at some stage to ensure the bills/ expenses are being shared proportionately, based on the income received. So if you both earn the same amount, the bills should be split 50/50. But if someone earns more, they would be expected to put more towards the bills. The OR will not ask you to pay anything towards his bankruptcy/ IPA.

2)How do they work out what we are allowed to have for food shopping, clothing etc? My husband swages go into his account and mine into my own aerate account. We have no joint debts or accounts. The best thing to do is budget realistically. The OR will use their discretion about what figures to allow and if you feel the figures they use are not an accurate reflection of what is happening you can raise that with them, but it will ultimately be up to the OR. The OR will ask to see your husband’s bank statements, but I cannot see any reason why they would ask for yours.

3)is an IPA always 3 years? I'm terrified we won't be able to keep afloat during that time and it's obviously a concern while trying to keep some normality for the kids. An IPA is for 3 years; however, it can be varied or suspended during that time. So, if the situation changes (for better or worse) your husband will need to tell the OR who will then review the IPA. If things have got better, the IPA would likely increase, however if things got worse the IPA may be lowered or suspended if his disposable money is less than £20 pcm.

I think that's it for now and I really appreciate any help x

We would like to get a mortgage at some point when all this is settled and we are worried that we will struggle to do that even with the DMP over bankruptcy (obviously we know the bankruptcy would make that very difficult!) That is difficult to say. Bankruptcy will show for 6 years from the date of the bankruptcy order, but if he is asked on future credit applications if he has ‘ever’ been bankrupt he would have to declare this so it may still affect him getting credit, after it has come off his credit file. However, with a DMP the monthly payments could go on for 5, 10, 20 years and it is unlikely he would get a mortgage whilst he still has monthly debt commitments to pay.