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  • FIRST POST
    • MrsShazbat
    • By MrsShazbat 6th Nov 17, 10:46 PM
    • 466Posts
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    MrsShazbat
    Friend with bankruptcy - monthly payment?
    • #1
    • 6th Nov 17, 10:46 PM
    Friend with bankruptcy - monthly payment? 6th Nov 17 at 10:46 PM
    This is a question from me but regarding a friend. I've had a good year or two following this site and getting some savings behind me, and am trying desperately to pass this on to a friend who is in dire straits.

    I don't have all the info to hand but in a nutshell, friend was declared bankrupt 5+ years ago (from memory, I'm trying to get info out of her). She's sent me a list of her outgoings, and pays £150 'towards' her bankruptcy. Can anyone tell me what she might still be paying for? I had an IVA, which I paid off and have been free of for 3 years now. I don't make any further payments, so in my ignorance (and till I get the full info from her), I presumed that declaring bankruptcy meant something similar or even no more paying anything. I'm worried of course that she's paying for something she shouldn't be.

    I'm sorry it's a bit vague, but in truth it's bugged me for years. In short, if one is declared bankrupt what if any further payments in respect of this have to be made?

    Thanks, will update with further info as I get it.
    * Xmas 2018 #8 £0 / £365 * (2017 £496.53; 2016 £424.32) * SPCNo.11 #66
    (SPCNo.10 £682.31 * SPCNo.9 £442.64 * inc Quidco to 2/11/17 £249.69) *
Page 1
    • GazHatesBanks
    • By GazHatesBanks 6th Nov 17, 11:59 PM
    • 149 Posts
    • 152 Thanks
    GazHatesBanks
    • #2
    • 6th Nov 17, 11:59 PM
    • #2
    • 6th Nov 17, 11:59 PM
    First thing you need to check is when she went bankrupt and when she was discharged.

    If she is unsure exactly when she went bankrupt, she can search the London Gazette (or Scottish equivalent if in Scotland) if the paperwork is not available.

    It sounds as though had an IPA (which can be set up at any time prior to discharge) which should last 3 years. This means it is possible to pay an IPA for up to 3 years after discharge.

    If she went bankrupt 5 years ago, the only way she should still be paying anything is if the discharge was suspended (usually through non co-operation with the OR).

    Even if an IPA wasn't agreed and enforced through the courts (an IPO) this should have been set up fairly soon after discharge (as long as the process is started prior to discharge, the courts can issue an IPO).

    Also, who is she making the payments to?
    • MrsShazbat
    • By MrsShazbat 7th Nov 17, 8:26 PM
    • 466 Posts
    • 2,437 Thanks
    MrsShazbat
    • #3
    • 7th Nov 17, 8:26 PM
    • #3
    • 7th Nov 17, 8:26 PM
    I'm presuming it's this "While bankrupt, borrowers must pay back their debts through a bankruptcy plan". She owed too much money to get a debt relief order. She went bankrupt 11 years ago and still has 4 years left to pay. She's paying Step Change.

    With a bit more info it looks a bit more legit but I was really worried as she's quite gullible, bless her, and I was bothered she was throwing good money after bad. Now to help her sort the rest of her stuff out.
    * Xmas 2018 #8 £0 / £365 * (2017 £496.53; 2016 £424.32) * SPCNo.11 #66
    (SPCNo.10 £682.31 * SPCNo.9 £442.64 * inc Quidco to 2/11/17 £249.69) *
    • fatbelly
    • By fatbelly 7th Nov 17, 8:43 PM
    • 11,517 Posts
    • 8,651 Thanks
    fatbelly
    • #4
    • 7th Nov 17, 8:43 PM
    • #4
    • 7th Nov 17, 8:43 PM
    I'm presuming it's this "While bankrupt, borrowers must pay back their debts through a bankruptcy plan". She owed too much money to get a debt relief order. She went bankrupt 11 years ago and still has 4 years left to pay. She's paying Step Change.

    With a bit more info it looks a bit more legit but I was really worried as she's quite gullible, bless her, and I was bothered she was throwing good money after bad. Now to help her sort the rest of her stuff out.
    Originally posted by MrsShazbat
    That's all terribly garbled. As already stated an income payments order/agreement in bankruptcy lasts 3 years. That quote sounds like it's not from a UK site.

    It would have nothing to do with stepchange - it sounds more like she has a debt management plan.

    Have you checked if there is any mention of her on the insolvency register?
    • Grumpelstiltskin
    • By Grumpelstiltskin 7th Nov 17, 8:52 PM
    • 2,174 Posts
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    Grumpelstiltskin
    • #5
    • 7th Nov 17, 8:52 PM
    • #5
    • 7th Nov 17, 8:52 PM
    Mrs S I think you haven't got all the details correct here.

    If your friend was bankrupt she would have an IPA paid for 3 years to the bankruptcy and she would not be paying anything to Stepchange.

    It sounds more like a DMP They can last longer than 3 years and they are operated by Stepchange.
    • sourcrates
    • By sourcrates 7th Nov 17, 8:55 PM
    • 12,427 Posts
    • 11,828 Thanks
    sourcrates
    • #6
    • 7th Nov 17, 8:55 PM
    • #6
    • 7th Nov 17, 8:55 PM
    Does not sound like Bankrupcy to me either.

    As already said, IPA’s last 3 years, bankrupcy writes off your debts, you only pay an IPA if you have £20 a month disposable income, or more.

    I would also suggest it’s a debt management plan she has.

    Bit worrying that she doesn’t know what she signed up to.
    Last edited by sourcrates; 07-11-2017 at 10:57 PM.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • MrsShazbat
    • By MrsShazbat 8th Nov 17, 8:25 PM
    • 466 Posts
    • 2,437 Thanks
    MrsShazbat
    • #7
    • 8th Nov 17, 8:25 PM
    • #7
    • 8th Nov 17, 8:25 PM
    Therein lies the problem. She's just not very worldly and - I want to say 'gullible' - she doesn't question anything.

    I checked the London Gazette and she's on there under bankruptcy orders, which was filed on 28th July 2006. Should this also say when she was discharged or would/should this be in her paperwork - assuming she still has it? According to that she was unemployed although she said to me that she had to make payments because she was in FT employment, so not sure which is the correct story there. But yes you're right it does sound like a DMP (having had one, then an IVA myself I at least know something about those). I hope she's still got the paperwork, maybe I can get to the bottom of it when I see her tomorrow.
    * Xmas 2018 #8 £0 / £365 * (2017 £496.53; 2016 £424.32) * SPCNo.11 #66
    (SPCNo.10 £682.31 * SPCNo.9 £442.64 * inc Quidco to 2/11/17 £249.69) *
    • MrsShazbat
    • By MrsShazbat 8th Nov 17, 8:55 PM
    • 466 Posts
    • 2,437 Thanks
    MrsShazbat
    • #8
    • 8th Nov 17, 8:55 PM
    • #8
    • 8th Nov 17, 8:55 PM
    This just in. Her sister set it all up for her because she didn't understand it. The paperwork is at her folks' place and they live quite a way away so I've told her to get her hands on it the next time she visits. No harm in checking the details.
    * Xmas 2018 #8 £0 / £365 * (2017 £496.53; 2016 £424.32) * SPCNo.11 #66
    (SPCNo.10 £682.31 * SPCNo.9 £442.64 * inc Quidco to 2/11/17 £249.69) *
    • fatbelly
    • By fatbelly 9th Nov 17, 12:13 AM
    • 11,517 Posts
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    fatbelly
    • #9
    • 9th Nov 17, 12:13 AM
    • #9
    • 9th Nov 17, 12:13 AM

    I checked the London Gazette and she's on there under bankruptcy orders, which was filed on 28th July 2006.
    Originally posted by MrsShazbat
    'a bankrupt will generally be discharged one year from the making of the bankruptcy order where that order is made on or after 1 April 2004. '

    She's likely to have been out of her bankruptcy for 10 years.
    • MrsShazbat
    • By MrsShazbat 16th Nov 17, 9:51 PM
    • 466 Posts
    • 2,437 Thanks
    MrsShazbat
    I'm still not really any wiser, but she is basically paying a DMP thru StepChange to creditors dating back to the early 90s when she had a house she bought with her partner and basically got into her initial debt borrowing money for him. This would have been around 1995 when I first met her, and shortly afterwards she left him, the house and everything in it apart from her clothes. For whatever reason, her bankruptcy did not pay these debts off because - she says as she understood it - she was in full-time employment and therefore had to contribute. So as far as I can tell, she went bankrupt to stop those debts getting worse and to rid herself of the subsequent debts she ran up during stressful periods of her life.

    Anyhoo it seems to be correct. She's managed to get a new bank account thru the MSE weekly newsletter so that's good, so I'm just steering her in the ways of MSE now. Nothing much else I can do with this particular issue.
    * Xmas 2018 #8 £0 / £365 * (2017 £496.53; 2016 £424.32) * SPCNo.11 #66
    (SPCNo.10 £682.31 * SPCNo.9 £442.64 * inc Quidco to 2/11/17 £249.69) *
    • fatbelly
    • By fatbelly 17th Nov 17, 12:03 AM
    • 11,517 Posts
    • 8,651 Thanks
    fatbelly
    I'm still not really any wiser, but she is basically paying a DMP thru StepChange to creditors dating back to the early 90s when she had a house she bought with her partner and basically got into her initial debt borrowing money for him. This would have been around 1995 when I first met her, and shortly afterwards she left him, the house and everything in it apart from her clothes. For whatever reason, her bankruptcy did not pay these debts off because - she says as she understood it - she was in full-time employment and therefore had to contribute. So as far as I can tell, she went bankrupt to stop those debts getting worse and to rid herself of the subsequent debts she ran up during stressful periods of her life.

    Anyhoo it seems to be correct. She's managed to get a new bank account thru the MSE weekly newsletter so that's good, so I'm just steering her in the ways of MSE now. Nothing much else I can do with this particular issue.
    Originally posted by MrsShazbat
    Very few debts 'survive' bankruptcy: fraudulent debts can be pursued after discharge; student loans and criminal fines are not qualifying debts.

    If these are ordinary credit debts and predate the bankruptcy she should ask for a refund of all payments made over the past 10 years.
    • sourcrates
    • By sourcrates 17th Nov 17, 12:48 AM
    • 12,427 Posts
    • 11,828 Thanks
    sourcrates
    I'm still not really any wiser, but she is basically paying a DMP thru StepChange to creditors dating back to the early 90s when she had a house she bought with her partner and basically got into her initial debt borrowing money for him. This would have been around 1995 when I first met her, and shortly afterwards she left him, the house and everything in it apart from her clothes. For whatever reason, her bankruptcy did not pay these debts off because - she says as she understood it - she was in full-time employment and therefore had to contribute. So as far as I can tell, she went bankrupt to stop those debts getting worse and to rid herself of the subsequent debts she ran up during stressful periods of her life.

    Anyhoo it seems to be correct. She's managed to get a new bank account thru the MSE weekly newsletter so that's good, so I'm just steering her in the ways of MSE now. Nothing much else I can do with this particular issue.
    Originally posted by MrsShazbat
    Sorry, this makes no sense whatsoever.

    Bankruptcy writes off all consumer debt except what Fatbelly has highlighted, if she had an IPA the debts are still written off.

    You need to clarify further.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • MrsShazbat
    • By MrsShazbat 17th Nov 17, 10:36 AM
    • 466 Posts
    • 2,437 Thanks
    MrsShazbat
    Trust me I'm trying. I sat down with her last night and basically said she has got to start reading paperwork. She denies sticking her head in the sand, but how else do you get in this mess. Her sister who is a lot more savvy, sorted out the DMP, bankruptcy, whatever, because she admits she couldn't understand anything and probably her head wasn't in the right place. Sadly and without wishing to sound like a complete b*tch, she's not the brightest bulb but her heart is in the right place and if the boot was on the other foot she'd give you her last pound.
    * Xmas 2018 #8 £0 / £365 * (2017 £496.53; 2016 £424.32) * SPCNo.11 #66
    (SPCNo.10 £682.31 * SPCNo.9 £442.64 * inc Quidco to 2/11/17 £249.69) *
    • luvchocolate
    • By luvchocolate 17th Nov 17, 12:00 PM
    • 1,479 Posts
    • 1,330 Thanks
    luvchocolate
    Hi something is deffinately wrong here, would she call up who she is paying this to while you are there and give authority for you to speak to them on her behalf?
    This really does need sorting out, you are being a really good friend to her to help in this way.
  • National Debtline
    Hi MrsShazbat


    This is setting off all manner of alarm bells for me. Somewhere along the line your friend appears to have either been very poorly advised, downright misled, or even a combination of the two.


    The sooner you can come by that paperwork, the better. Once you've done that I think a call to one of the debt advice charities is in order - you/she need a directed conversation so that all of these question marks can be fully addressed.


    Dennis
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
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