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  • FIRST POST
    • gman1980
    • By gman1980 6th Jul 17, 1:24 PM
    • 8Posts
    • 2Thanks
    gman1980
    Working during Bankruptcy
    • #1
    • 6th Jul 17, 1:24 PM
    Working during Bankruptcy 6th Jul 17 at 1:24 PM
    Hi,
    My wife is an undischarged bankrupt ( discharge due in Jan 2018). I understand that she can work during the bankruptcy period. I have become self employed recently and planning to make her as employee. We know we have to let the OR know about any changes in circumstances.
    Here are some of the questions that comes across my mind. Would really appreciate if someone could clarify
    1) Is there any minimum amount that I need to pay her. My accountant worked out she could get £800 net as salary per month.
    2) can the OR take anything from this salary for paying off debts?
    3) We can certainly show that the entire amount will go to the household share ( Rent itself will come to £300 per person) and £500 for the remaining such as Food, groceries, utility bills etc.

    Regards
    GM
Page 1
    • BrightLights14
    • By BrightLights14 6th Jul 17, 2:41 PM
    • 52 Posts
    • 34 Thanks
    BrightLights14
    • #2
    • 6th Jul 17, 2:41 PM
    • #2
    • 6th Jul 17, 2:41 PM
    Hi! Definitely not the best person to advise as many here have much more knowledge than me on these things but as no-one seems to be replying:

    1) You'll need to pay her minimum wage
    2) Yes - if there's a surplus once all the essentials are accounted for, the OR will want this as part of an IPA which will last for 3 years (I think)
    3) If that's the case, then she should be OK, but really what's the point? If I were her I'd sit tight until discharge, avoid an IPA and find work next year. If there's no surplus income when her bankruptcy is discharged it'll all be over in as little as 6 months!

    Good luck to you both.
    and here you are living, despite it all
    - Rupi Kaur

    LBM August 2013 - debt: £27,181
    May 2017 - debt: £10,725
    DFD - November 2018
    • IAmWales
    • By IAmWales 6th Jul 17, 3:22 PM
    • 965 Posts
    • 2,118 Thanks
    IAmWales
    • #3
    • 6th Jul 17, 3:22 PM
    • #3
    • 6th Jul 17, 3:22 PM
    Hi! Definitely not the best person to advise as many here have much more knowledge than me on these things but as no-one seems to be replying:

    1) You'll need to pay her minimum wage
    2) Yes - if there's a surplus once all the essentials are accounted for, the OR will want this as part of an IPA which will last for 3 years (I think)
    3) If that's the case, then she should be OK, but really what's the point? If I were her I'd sit tight until discharge, avoid an IPA and find work next year. If there's no surplus income when her bankruptcy is discharged it'll all be over in as little as 6 months!

    Good luck to you both.
    Originally posted by BrightLights14
    You're suggesting someone chooses to take a year off work for the sole purpose of avoiding paying their debts?

    It's people like you that give all the genuine, honest bankrupts a bad name
    • TheGardener
    • By TheGardener 6th Jul 17, 3:42 PM
    • 2,086 Posts
    • 1,992 Thanks
    TheGardener
    • #4
    • 6th Jul 17, 3:42 PM
    • #4
    • 6th Jul 17, 3:42 PM
    You're suggesting someone chooses to take a year off work for the sole purpose of avoiding paying their debts?

    It's people like you that give all the genuine, honest bankrupts a bad name
    Originally posted by IAmWales
    Sorry but this board is for support - not judgement. Please don't post comments like this, they are not helpful. We will assume you were unaware of this rule in this instance...?

    BR's don't have any debts - that's the point of BR.

    OP - As the employer, you must pay the legal minimum wage.
    Your wife must then tell the OR within 21 days of it happening - about any change of circumstances. The OR will expect her to complete an SoA and then determine if there is any surplus available for an IPA.
    There are hundreds of posts on here that will give you some indication of the amount the OR will allow for certain expenses. The key thing is that the OR will expect a 50/50 split on household expenses UNLESS you prove otherwise. The OR will judge based on % so for example: if you earn 20% more than your partner - then you would be expected to pay 20% more towards household expenses.
    It isn't about saying - well she spends it on x and y - you have to work within the OR's guidance of what and how much is reasonable.
    Last edited by TheGardener; 06-07-2017 at 3:46 PM.
    • peterkay369
    • By peterkay369 6th Jul 17, 3:46 PM
    • 139 Posts
    • 60 Thanks
    peterkay369
    • #5
    • 6th Jul 17, 3:46 PM
    • #5
    • 6th Jul 17, 3:46 PM
    You're suggesting someone chooses to take a year off work for the sole purpose of avoiding paying their debts?

    It's people like you that give all the genuine, honest bankrupts a bad name
    Originally posted by IAmWales
    I have to disagree with you I'm afraid and my opinion would pretty much echo that of BrightLights'.
    With all due respect, I doubt the vast majority of people intend to go bankrupt - I know I didn't. Yes, there are a few people that completely exploit the system for mega money however I don't think that this is what the OP is intending to do. If it's better for someone in the long run to take a year out then I don't see it as bad advice.

    I haven't been given an IPA, and have been offered a promotion within the company in a much higher paid position however I've chosen to decline the offer because it means financially I will be a lot worse off and there is no point at all in me accepting it. Does that make me a bad person? Not in my eyes.

    Keen to hear your thoughts on this though, it's an interesting topic for debate!
    • davemorton
    • By davemorton 6th Jul 17, 4:25 PM
    • 25,733 Posts
    • 301,471 Thanks
    davemorton
    • #6
    • 6th Jul 17, 4:25 PM
    • #6
    • 6th Jul 17, 4:25 PM
    I have to disagree with you I'm afraid and my opinion would pretty much echo that of BrightLights'.
    With all due respect, I doubt the vast majority of people intend to go bankrupt - I know I didn't. Yes, there are a few people that completely exploit the system for mega money however I don't think that this is what the OP is intending to do. If it's better for someone in the long run to take a year out then I don't see it as bad advice.

    I haven't been given an IPA, and have been offered a promotion within the company in a much higher paid position however I've chosen to decline the offer because it means financially I will be a lot worse off and there is no point at all in me accepting it. Does that make me a bad person? Not in my eyes.

    Keen to hear your thoughts on this though, it's an interesting topic for debate!
    Originally posted by peterkay369
    Wouldnt it make sense to take the promotion, as that would enable you to pay back some of the money you borrowed from people, and in the long run, would it not aid yourself?
    Im a board guide on Pie Making Moneysaving. I'm a volunteer to help the pie production & consumption run smoothly. I can help merge tastes and fillings. Any pies made are mine & are not those of other Moneysavingexperts. Im a board guide not a qualified baker and as such do not make every type of pie. If you spot a quiche or flan please report it.
    • peterkay369
    • By peterkay369 6th Jul 17, 4:55 PM
    • 139 Posts
    • 60 Thanks
    peterkay369
    • #7
    • 6th Jul 17, 4:55 PM
    • #7
    • 6th Jul 17, 4:55 PM
    Wouldnt it make sense to take the promotion, as that would enable you to pay back some of the money you borrowed from people, and in the long run, would it not aid yourself?
    Originally posted by davemorton
    The IPA would be that small that I highly doubt any money would make it to the creditors and would just fund the IS.

    It would not aid me at all, if anything it will be worse off for me as it means I will have to go for another 2-3 years with no surplus income.
    • luvchocolate
    • By luvchocolate 6th Jul 17, 5:15 PM
    • 1,400 Posts
    • 1,235 Thanks
    luvchocolate
    • #8
    • 6th Jul 17, 5:15 PM
    • #8
    • 6th Jul 17, 5:15 PM
    I totally agree most crediters do not receive any of the money as the O.R fees take priority.
    The bill for my trustee was over £24,000
    • Thomas The Tank Top
    • By Thomas The Tank Top 6th Jul 17, 5:27 PM
    • 181 Posts
    • 468 Thanks
    Thomas The Tank Top
    • #9
    • 6th Jul 17, 5:27 PM
    • #9
    • 6th Jul 17, 5:27 PM
    Sorry but this board is for support - not judgement. Please don't post comments like this, they are not helpful.
    Originally posted by TheGardener
    The only sin on this board IS to be judgemental.
    • BrightLights14
    • By BrightLights14 6th Jul 17, 6:00 PM
    • 52 Posts
    • 34 Thanks
    BrightLights14
    It's people like you that give all the genuine, honest bankrupts a bad name
    Originally posted by IAmWales
    Excuse me? How is someone who's half way through a 5 year DMP, which has been one hell of a long slog, giving honest bankrupts a bad name? It's very common for people to take time off work or study during bankruptcy to avoid crippling IPAs that last much longer than the 12 month term. After that, they can get a job that and pay taxes and contribute to the public pot, rather than working all hours just line the ORs pockets. That absolutely does not make someone a bad person. Bankruptcy is not a punishment, it's a relief and a fresh start after what I can imagine (having never been there myself, hence not being the 'dishonest bankrupt' you so self-righteously suggested I was) was a horrendously tough time.

    Care to give the OP any advice or did you just come here to bring judgement and condemnation?

    Ridiculous.
    Last edited by BrightLights14; 06-07-2017 at 7:01 PM.
    and here you are living, despite it all
    - Rupi Kaur

    LBM August 2013 - debt: £27,181
    May 2017 - debt: £10,725
    DFD - November 2018
    • gman1980
    • By gman1980 6th Jul 17, 7:04 PM
    • 8 Posts
    • 2 Thanks
    gman1980
    Hi,
    Many thanks for your kind words, didnt want to create a debate over it. As brightlights pointed out, I certainly thought not putting as employee until she gets discharged. However, paying her 800 or however much lesser or more to her wont make me save much in tax( if thats what anyone thinks). its just that I thought morally this is what the situation is and didnt want to hide anything, above all , making amends for how we got into this in the first place.
    • peterkay369
    • By peterkay369 6th Jul 17, 7:08 PM
    • 139 Posts
    • 60 Thanks
    peterkay369
    Hi,
    Many thanks for your kind words, didnt want to create a debate over it. As brightlights pointed out, I certainly thought not putting as employee until she gets discharged. However, paying her 800 or however much lesser or more to her wont make me save much in tax( if thats what anyone thinks). its just that I thought morally this is what the situation is and didnt want to hide anything, above all , making amends for how we got into this in the first place.
    Originally posted by gman1980
    If her working full time means a potential IPA, does she need to work full time? IPAs have changed recently and the figures allowed are a lot more strict, so may be not worth the risk in your situation.
    • BrightLights14
    • By BrightLights14 6th Jul 17, 9:09 PM
    • 52 Posts
    • 34 Thanks
    BrightLights14
    Sorry for ranting on your thread OP. Really hope it works out for you both. X
    and here you are living, despite it all
    - Rupi Kaur

    LBM August 2013 - debt: £27,181
    May 2017 - debt: £10,725
    DFD - November 2018
    • Geoff1963
    • By Geoff1963 6th Jul 17, 9:59 PM
    • 931 Posts
    • 574 Thanks
    Geoff1963
    I don't understand, what is the benefit of making your wife an employee ? Can she not support your business, without being an employee ? For instance ; if she did every household chore, so you could devote more time to the business, would you need to pay her at all ?
    • Johnbd1985
    • By Johnbd1985 8th Jul 17, 5:33 AM
    • 4 Posts
    • 0 Thanks
    Johnbd1985
    Kind regards but can you do an update? I'm really interested in the outcome.
    - Thank you
    • roughsea
    • By roughsea 11th Jul 17, 11:38 AM
    • 65 Posts
    • 12 Thanks
    roughsea
    i decided to cut my hours and avoid the IPA and have no intention of paying one penny. Bankruptcy mean bankrupt and a clean slate and not to be tied to paying a 3 year agreement.
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