Joint Bank Accounts in Bankruptcy

renegadefm

Hi, I need some advice on this subject please.

Basically I been bankrupt since 17th of April almost 6 months ago, and one of the accounts which I included into the bankruptcy was a joint account I had with my wife.

It was over drawn by £390.61p and today my wife has started getting letters saying shes liable for the debt, which I find confusing because if it was included in the list of accounts at the time why now 6 months later are they pursuing this claim on her who obviously isn't bankrupt?

I feel angry that I or rather we were not adviced of this at the time if it is true, as she doesn't work so how could she repay almost 400 pounds?

Bascially what I need to know is she liable and if so where do we go from here because its not worth my wife declaring herself bankrupt for 390 pounds just to avoid the debt surely?

And why after 6 months as this only come to light, had we known maybe this could have been gradually payed off by myself or something but we've been denied all access to the account because we thought it was completely closed down and finished, so we assumed the debt had been long since cleared when I declared myself bankrupt.

Please help!

peachyprice

Hi renegade,
Sorry you were not advised of this before BR, but any joint accounts/debts will ALWAYS fall to the non-bankrupt party. You really should have been told this by CAB/NDL or whoever gave you advice.

It's probably taken 6 months for the bank to get around to chasing her.

Were there any other joint debts? If so you can expect letters from these too.

renegadefm

peachyprice wrote: »

Hi renegade,
Sorry you were not advised of this before BR, but any joint accounts/debts will ALWAYS fall to the non-bankrupt party. You really should have been told this by CAB/NDL or whoever gave you advice.

It's probably taken 6 months for the bank to get around to chasing her.

Were there any other joint debts? If so you can expect letters from these too.

Hi Peacy, Well as far as I can remember there is no other join accounts, but what confuses me we went to a citizens advice burea and they didn't warn us of this, and even the official reciever at the time didn't, I'm just thinking what if all the accounts were joint then it wouldn't have been me worth going bankrupt.

And think of the nightmare we would have if my wife was liable to the tune of 38 thousand which is how much all my accounts amounted to in total?

Surely she wouldn't have been liable for that, so my question is why should she be liable for £390 when the account was included in the bankruptcy?

In other words the joint account was a waste of time being added, am I right?

We were even told we would be debt free by me going bankrupt, but it seems we been very ill informed indeed, I thnk this is a hard lesson to everyone never have a joint bank account.

What can we do now to avoid her paying the debt which she obviously can't afford as she doesn't work, but at the same time protect her status because we been relying on her this past 6 months on her going past credit checks etc when applying for things like mobile phone contracts etc?

skylight

She is liable, because she is the joint account holder. It is absolutely correct that the debt on all joint debts will fall to her and soley her now. Your liability to the debt is included in bankruptcy. Her liability was not as she did not go BR.

You cannot avoid paying it. Or rather your wife cannot ignore paying it. And there is no way you can protect her credit file against this if it is not paid in full. Even if she made a nominal offer per month it will still affect her credit file.

renegadefm

skylight wrote: »

She is liable, because she is the joint account holder. It is absolutely correct that the debt on all joint debts will fall to her and soley her now. Your liability to the debt is included in bankruptcy. Her liability was not as she did not go BR.

You cannot avoid paying it. Or rather your wife cannot ignore paying it. And there is no way you can protect her credit file against this if it is not paid in full. Even if she made a nominal offer per month it will still affect her credit file.

My God, this is really bad news for us because we were only just beginning to handle the stress etc of me being bankrupt and now this, shes worried sick now that she has to pay the £390 but she doesn't work, so where do we go from here?

I can't believe something so critical could not have been mentioned because we obviously mentioned to my OR and the advice burea at the time it was a joint account, why did they not inform us of this?

renegadefm

Can anyone advise what we do now? shes obviously not working and wouldn't be able to pay it off, and it seems her credit status is damaged already.

Please help.

skylight

Its not your ORs responsibility to tell you or advise you - he will have assumed that you have been advised correctly at the time of BR - the judge also asks if you have been given advice.

Not being at the CAB meeting, I could not comment on that. It is possible that being quite stressed out at the time, it may have been something that was mentioned and not noticed. It is important and not likely to have been missed by the CAB.

But its happened and there is nothing we can do about that now.

On the National Debtline website there are lots of templates about debts etc. There is a great one about pro-rata payments. If you amend this slightly but write and offer them something you can afford a month - even if its £5pm. They cannot force you to pay more than you have, but the worse case scenario is that they take your wife to court for a CCJ and payment that way.

renegadefm

skylight wrote: »

Its not your ORs responsibility to tell you or advise you - he will have assumed that you have been advised correctly at the time of BR - the judge also asks if you have been given advice.

Not being at the CAB meeting, I could not comment on that. It is possible that being quite stressed out at the time, it may have been something that was mentioned and not noticed. It is important and not likely to have been missed by the CAB.

But its happened and there is nothing we can do about that now.

On the National Debtline website there are lots of templates about debts etc. There is a great one about pro-rata payments. If you amend this slightly but write and offer them something you can afford a month - even if its £5pm. They cannot force you to pay more than you have, but the worse case scenario is that they take your wife to court for a CCJ and payment that way.

Thanx for your help, its just my mind is spinning at the moment, I can't believe both of us missed this vital information as she was by my side during everything during my bankruptcy things.

I thought by now everything would be virually over, it seems like its all kicking off again, I'm not sure how to handle it, been going through hell as it is...

Would a trip to the bank do any good to see if they can help?

I guess I'm extremely lucky its only £390.61

renegadefm

I just contacted the advice burea, and they said apparently I should have been advised to delete my wife from the account before going down the bankrupcy route and then she could have avoided the debt herself, but I certainly can't remember that, but thanx anyway.

tigerfeet2006

Well that's the wrong advice for a start. If your account is not in credit and being in overdraft it isn't, the bank is highly unlikly to remove a name until it was in credit.

So I am guessing that they didn't tell you.

renegadefm

tigerfeet2006 wrote: »

Well that's the wrong advice for a start. If your account is not in credit and being in overdraft it isn't, the bank is highly unlikly to remove a name until it was in credit.

So I am guessing that they didn't tell you.

Had a chat with my wife after I got home from work yesterday, and tryed to re-trace everything we done in our heads just prior to going bankrupt because I was so stressed everything is a blur in my head, and she reminded me we went to Barclays and succesfully and easily removed her from my account a few days before declaring myself bankrupt even though it was over 2 thousand overdrawn but within the agreed overdrawn amount, whereas the Halifax one was over the overdrawn amount, which is why they declined our request of removing my wife from the account, but we thought the Halifax debt would still be wiped off when I go bankrupt because at this stage I was still very nieve about things, but obviously it wasen't wiped clean with the bankruptcy, which is why now nearly half a year on Halifax have decided to chase my wife for the amount.

I'm just thankful its only a small amount at 390 pounds, so we should be able to pay that off if needs be, but its a hard lesson to everyone with joint accounts, because it could have been thousands.

Anyway I rang Halifax this morning and ended up being put through to their own bankruptcy department, and they said now that they have my court number which yesterday they said curiously they still didn't have, they went onto say that the letters will stop, and at worst my wife will get a letter asking her to pay the debt but the advice they gave which I was amazed about is that she says she can't afford it and the debt will go to the debt collectors, and so I asked will this affect her credit rating or anything and they said no because the debt was not hers originally.

So it turns out that even though the second party becomes liable for the debt on a joint account, they can just say they can't pay it as it wasen't their original debt and everything will be ok, or thats what I was basically told today!

hope that is help for others too.