Ask a CCCS counsellor a bankruptcy question

pixiechick_2

Hi

I am thinking about going BR in 2-3 months (when I am due some money) and I have spoken to your service about this. I have written to my creditors offering token payments, except for my bank (I have a substantial overdraft) and the credit card issued by my bank.

If I leave things as they are, making token payments to the other creditors and paying the minimum payment to my bank out of the overdraft, would it be seen as giving preferential treatment to my bank/bank's credit card? Would I be able to open a basic bank account now, and treat my bank the same as my other creditors? Would I be allowed to keep the basic account when I'm made bankrupt?
Thank you

philnicandamy

Basic accounts...as long as its barclays or co-op then usually you'll be fine (as long as you dont have thousands in!) minimum payments? personally I wouldn't bother just put the money towards your bankruptcy fees..

the OR could question why your making minimum payments to creditors yet paying out of an overdraft...I wouldnt do it myself to be honest

pixiechick_2

philnicandamy wrote: »

(as long as you dont have thousands in!)

I wish....:rotfl:

Right, off to phone the coop for a cashminder account.

philnicandamy

long as your not in brighton as well....the OR's for that office for some weird reason close cashminder accs opened before bankruptcy...

pixiechick_2

No I'm a long way from Brighton.

Just trying to sort out which account will be best, Coop or Barclays. (I'd really like online banking)

philnicandamy

barclays wont let you use the online bits till discharge...co-op will no matter what

grai

I declared bankruptcy in 2007

can you tell me when I will be able to get credit and an overdraft? the information is always contradictory - 3 years, 5 years - never

thanks

philnicandamy

Bankruptcy sits on credit files for a total of 6yrs......

CCCS_Matthew

We_Are_The_Mods wrote: »

Any help with these would be great, thanks.

I'm lodging with a relative after being evicted from my home (mortgage repo) do I have to give this address on any of the BR forms? only I don't want my relative to get any black marks against their name, after all, all my debt has been acquired at my previous address. Also, although I'm not renting I am contributing significantly to the house running costs, do I put these down as regular outgoings? rent, gas, electric, food etc....

Also, my only income is state benefits which is paid into a post office account, do I need to give details of this account on the forms? I have a current account and will obviously fill in the details for it, just wondered what I do about the PO account and money that is in it.

Many thanks in advance.

Hello,

It is fine to put your current address down on your application. The only person's credit history that will be affected by your bankruptcy will be you (unless you have debts in joint names obviously).

There is no problem listing your contribution to household costs under your expenditure as these form an important part of outgoings.

The court will want to know details about all your financial accounts, which will include you Post Office account.

Hope this clears things up. Please ask if you have any more questions.

Regards

CCCS

CCCS_Matthew

PoorOldPete wrote: »

Hi

I need some advice before I make my next move with our debts, my wife's and mine. Little bit of background... the debts are fairly long term, some over 6 years since last payment towards or communication etc, and our mostly store cards, bank loans, catalogues, student loan etc etc, but there are some utility bills, water, elec and council tax... We are both out of work for health reasons, neither likely to ever return due to the health reasons... Our income is incap ben/child tax cred/DLA/housing ben/child ben... no wages or other income. No savings, live in rented house and car on DLA... we also don't own anything expensive, so I presume that means no assets?

Our debts our in our individual names, but together total about £34k. I know at least 2 could be removed under limitations act, dropping that by £3k. I think there are others that could also be dropped but need to check them out in detail. I think that individually we would have less than £15k each if we did this.

What I need to know is if we can go for DRO rather than BK. So...

1. can we as a married couple do seperate DRO's or do they have to be merged as one debt because we are married?

2. are DLA and child benefit ignored income when doing an income/expenditure? DLA is currently being renewed so if we didn't get it back our financial situation would dramatically change for the worse.

3. some of the debts, banks/CC's are mostly made up of charges. If I claim this money back under hardship would that affect a DRO? If I claimed it back but used it to reduce the debt owed to that company would affect DRO? If I claimed back and shared between all debts would that be acceptable?

4. I will be claiming DLA for myself in the near future, if I get it then there is a backdated payment made, would this affect DRO?

5. If I have to have a BK would my Natwest step account, joint, have to go? It has all bens paid into it and DD's for non debts paid out.

6. would a DRO affect my bank account?

7. I have been told there are acceptable levels of expences by the government, e.g. how much is allowed to be paid on housekeeping etc per month. Is there somewhere I can see these levels so I can see if mine reasonable?

8. if I ask CCCS to help with my debts would I do all the contacting/negotiating or can it be done by CCCS?

I am sure I will have more questions as I have so many concerns about my situation and I want to do it right as my family has lived with these debts and the 'callers' for years now and it has had a great effect on us.

Thanks in advance.

Pete

Hi Pete,

I think it would probably be easiest for me to answer each question separately using the numbers you have provided.

1. Debt Relief Orders (DROs) are always done on an individual basis, so you would both apply separately whether you were married or not.
2. You would be expected to list all of your income, including Disability Living Allowance (DLA), but you can break down how this money is used in your expenditure (usually towards the cost of coping with a disability). So effectively it would usually cancel itself out.
3. Often with refunded charges they will be applied straight to the debt you have received charges back on, this is something that you have no control over so wouldn’t be something you would be blamed for. If you chose to pay some debts and not others then you could as preferential treatment by the Insolvency Service. It would be their decision to make, so it is hard to say what their likely reaction would be in your situation.
4. If you came into a lump sum while on a DRO you would be expected to notify the Insolvency Service and they would tell you what would happen next. If it was a back dated benefit payment I think they would be more inclined to let you keep, as that would be money you should have had through your day to day income, and therefore may be needed.
5. It would be down to Natwest, many banks close your account down following bankruptcy. Barclays and Co-operative bank allow undischarged bankrupts to have simple accounts with them, so you would be able to access some form of bank account.
6. It would depend on the situation but usually you can keep your bank account on a DRO.
7. I can’t think of anywhere you could find a list of these kind of expenses, but you could prepare a budget for yourself using our online Debt Remedy service which gives advice about how much to budget in certain areas. You can go find it here.
8. How involved we can get with your creditors would depend on what your best option is. If you follow through the Debt Remedy process that is linked to above you will be able to find out what advice we would suggest in your current situation.

Hope these answers help.

CCCS