Ask a CCCS counsellor a bankruptcy question

CCCS_Sue

danjaq2004 wrote: »

Hi,

How are you supposed to carry on receiving Job Seekers Allowance and other benefits if your bank accounts are frozen/closed down - especially if the one you're using is one that's overdrawn and you'll be including in your petition?

As far as I can remember, you can nominate someone else's account for JSA, but not sure if you can for Housing Benefit.

Is there a way or an account you can have that is unaffected by bankruptcy so you can carry on receiving BACS payments until the order is made and you are allowed to go an open another bank?

Thanks.

Hi danjaq2004 and thank you for your message

All bank accounts are usually ‘frozen’ by the bank when they find out you are going bankrupt. You need to make alternative arrangements for receiving money into your account and paying direct debits etc.
You should not try to open a new account before the bankruptcy order as this will also be frozen. Some banks will allow you to keep using your existing account, but it will still be frozen when they first hear about your bankruptcy.
If your benefit is paid into a bank account which is frozen, then you will
need to contact the Official Receiver dealing with your case, in order to see if you can get your money released to pay your essential living costs.
If your income only consists of benefit payments, you could open a Post Office card account after the bankruptcy order.
More details can be found on www.postoffice.co.uk
The Coop bank is also worth a try.

I have attached a link to a leaflet from the Insolvency Services website which will give you more detailed information on bank accounts in bankruptcy.

http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/bankaccount.pdf

Regards
Sue

CCCS_Sue

webmunky wrote: »

Hi,

I got into serious debt (50K+) running a business on Credit Cards and thin air. I took some drastic cuts a few years ago to minimise all outgoings for the business - but it is still losses some money.

I managed to keep head above water as I now have another proper job and effectively run what’s left of the business as an expensive hobby.

I am now approaching the time when the business is more hassle than it’s worth and I am thinking about packing it all in and potentially declaring myself bankrupt.

I have been paying £300 against these debts in a D.M.P for over 3 years. I would probably keep paying the £300, but some of the creditors keep on hassling me and pushing for more.

I previously enquired about an IVA and was told at the time that it was not an option as I was not in regular employment.

I now have a proper job earning over 30K per annum. I rent and have few financial commitments - other than debts.

I don't want to enter an IVA now as it will probably cost me £500-£600 a month for the next 5 years.

Is bankruptcy still an option?

Jan

Hi Jan and thank you for your message

This is difficult to say without knowing your full financial circumstances.

However, if you are able to pay off your debts in a realistic time and you have assets, then bankruptcy would not be your best option.

I would recommend that you contact us for further advice regarding this so that we can discuss this and any other options in more detail with you.

To book an appointment with one of our trained counsellors you would need to contact our helpline free on 0800 138 1111. Lines are open Monday to Friday 08:00-20:00. It would be helpful that when you call you have details ready regarding your income, expenditure and creditors, as this can help speed up the referral process. If you have this information ready it may be possible to refer you directly to a counsellor if one is available, otherwise we will arrange a time that is convenient for you to be called back for an appointment.

Alternatively you can visit our online debt advice facility called Debt Remedy. Debt Remedy would assist you in completing a financial statement and you would be provided with tailored advice on the best way to deal with your situation. This link will take you directly to Debt Remedy www.cccs.co.uk/ref/drcu

Regards,
Sue

CCCS_Sue

debtfree25 wrote: »

Hi can anyone please give me some much needed advice,
i am looking to go BR as this seems my only option now, i am currently unemployed and on jobseekers allowance, i`ve been in a DMP with payplan since Sep/Oct 2006 and i still am, but now only making token payments to creditors due to unemployment.. but the problem i have is back in Feb 2008 16 months into my DMP i foolishly took out a credit card without the DMP knowing, and now that has fallen into debt, and i have had to activate my repayment plan on it which freezes the account while im out of work, If i was to go BR would that now cause me problems... and would the OR take a dim view of that and give me a BRU bankruptcy restriction undertaking, or will it not be as bigger problem as im thinking, please can you advise me..

Hi debtfree25 and thank you for your message.

You could receive a Bankruptcy Restriction Order (BRO) due to the fact you ‘incurred debts that you knew you had no reasonable chance of repaying’
This would mean that you would be unlikely to get an early discharge from your bankruptcy
I have attached a leaflet from the Insolvency Services website for you which explains Bankruptcy Restriction Orders in more detail.
http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/bro.pdf

Regards
Sue

CCCS_Sue

Stayathomemom wrote: »

My husband and I have been in financial difficulties for around 2 years, we have crawled along thanks to family unexpected money etc but now I feel we just carry on like this. We are now seriously considering bankruptcy but the thought of losing our family home petrifies me as we have 3 young children. Our house is not a grand house by anymeans but it is our home, our morg is around £95k and we have a secured loan of approx £10k, what are the chances of losing the home? How do they decide if there is any equity, the house would prob be valued at £120-130k but the houses here arent selling???

Hi stayathomemom and thank you for your message

The trustee in bankruptcy has 3 years from the date of the bankruptcy order (unless the court grants an extension of time) to realise a bankrupt’s interest in the home.Within that time, house prices could increase.
The trustee is only interested in the equity in the property and will take into account any secured lending against the property, potential selling costs and fees when looking at this.
After taking this into account, the trustee has a number of options to look at to realise the interest.
I have attached a link to a booklet from the Insolvency Services website 'What happens to my home in Bankruptcy' which will give you further information.
http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/home.pdf

You do not say how much your debts are, but there may be other options you could consider before you decide on bankruptcy, especially as you have equity in the property. Bankruptcy is always the last resort.
I would recommend that you speak to a debt counsellor about your situation, and explore all the options that are available for your situation. You can ring for an appointment free on 0800 138 1111.

Lines are open Monday to Friday 08:00-20:00. It would be helpful that when you call you have details ready regarding your income, expenditure and creditors, as this can help speed up the referral process. If you have this information ready it may be possible to refer you directly to a counsellor if one is available, otherwise we will arrange a time that is convenient for you to be called back for an appointment.

Alternatively you can visit our online debt advice facility called Debt Remedy. Debt Remedy would assist you in completing a financial statement and you would be provided with tailored advice on the best way to deal with your situation. This link will take you directly to Debt Remedy www.cccs.co.uk/ref/drcu

Regards
Sue

manorpaul

Hi, I am going to file for BR next week but am trying to put things 'right' before I do. The main thing for me is to protect my van which I have on hire purchase. I spoke to an IP the other day and he said that it is the only form of transport in the household and I need it to go to work and earn a 'wage' as everyday I travel all over the country (I am a self employed electrical engineer). I have since then spoken to some one today from the Business Debtline as advised on here and she said she agreed with the IP who I spoke to BUT she said that he should of mentioned first that it depends what my terms and conditions state in the hire purchase agreement. After turning my place upside down I found it and the way its worded is so confusing and not very clear cut.
Does anyone know if BR 'over rides' the hire purchase agreement? Does the OR get involved first and examine my case? Are there any 'loopholes' in the Consumer Credit Act 1974?
It may be worth mentioning that the vehicle was taken out on hire purchase on Feb 2008 for £9225 inc vat and interest, the remaining owing is £4363. I know that if I have paid off over a 1/3 there are some sort of consumer rights rights in the T&C's of the HP agreements?

debtfree25

ADVICE FROM ALL CCCS COUNSELLORS WELCOME

Hi Sue,Amanda.. Thanks for your replys.


What do you think the chances are of me getting a BRO for what i`ve done,
and is there anything i can do, on some forums i`ve visited some people have said they dont think it will be a problem, as the £750 i owe on that card makes up only 3% of my total debt of around £24.000 and i have not used the card since around july last year, or am i just at the OR`s mercy..
is there anything i can do, and if not, and i do get one, how long before i will possibly get my discharge? would i be looking at a long long time, and is it always printed in the local
paper, or is there a way around that. like most people, i would`nt like neighbours knowing my business, and it would be embarassing.

CCCS_Amanda

manorpaul wrote: »

Hi, I am going to file for BR next week but am trying to put things 'right' before I do. The main thing for me is to protect my van which I have on hire purchase. I spoke to an IP the other day and he said that it is the only form of transport in the household and I need it to go to work and earn a 'wage' as everyday I travel all over the country (I am a self employed electrical engineer). I have since then spoken to some one today from the Business Debtline as advised on here and she said she agreed with the IP who I spoke to BUT she said that he should of mentioned first that it depends what my terms and conditions state in the hire purchase agreement. After turning my place upside down I found it and the way its worded is so confusing and not very clear cut.
Does anyone know if BR 'over rides' the hire purchase agreement? Does the OR get involved first and examine my case? Are there any 'loopholes' in the Consumer Credit Act 1974?
It may be worth mentioning that the vehicle was taken out on hire purchase on Feb 2008 for £9225 inc vat and interest, the remaining owing is £4363. I know that if I have paid off over a 1/3 there are some sort of consumer rights rights in the T&C's of the HP agreements?

Hi manorpaul,
HP agreements should be checked for a bankruptcy clause which may allow the lender to end your agreement and you would have to return the vehicle.
If you wish to keep the car, you should discuss this with your lender and ask about the impact of your bankruptcy on your contract.
The OR or hire-company may decide not to cancel the agreement. However, if the OR does not consider your vehicle to be essential they can take your HP payment out of the budget. This would probably make it impossible for you to keep the car.
I hope that this helps.

Regards,

Amanda

CCCS_Amanda

debtfree25 wrote: »

Hi Sue, Thanks for your reply.

What do you think the chances are of me getting a BRO for what i`ve done,
and is there anything i can do, on some forums i`ve visited some people have said they dont think it will be a problem, as the £750 i owe on that card makes up only 3% of my total debt of around £24.000 and i have not used the card since around july last year, or am i just at the OR`s mercy..
is there anything i can do, and if not, and i do get one, how long before i will possibly get my discharge? would i be looking at a long long time, and is it always printed in the local
paper, or is there a way around that. like most people, i would`nt like neighbours knowing my business, and it would be embarassing.

Hi debtfree25,

If the debtor is subject to BRO or BRU the restrictions will last between 2 and 15 years. The timeframe will be down to the OR, who will judge each case individually.

Until April 6th 2009, bankruptcy orders where advertised in both the London Gazette and the bankrupt’s local newspaper. From April 6th 2009, although the order will still be published in the London Gazette there is no requirement for the OR to publish the information in the bankrupt’s local newspaper.

In exceptional circumstances the OR may still decide to include the information in the local newspaper, but only if they feel there will be a positive benefit of advertising the information. This could include situations when the bankrupt has not fully disclosed their financial situation to the OR, or if there is a high level of public concern or complaint about the bankruptcy.
Regards,
Amanda

danjaq2004

Sue, hi and thanks for your reply.

I have only just had a look at your response. Before doing so I was in touch with the National Debt Helpline. I explained that I had a Current Account with Barclays (where my benefits, JSA and Housing) are paid and a debt with Barclaycard too. They suggested that this account may be closed by Barclays due to the debt on the credit card, so meantime take out a Co-Op account. They further suggested that this account may or may not be frozen by the OR - if explaind to the judge and OR that this account is soley for receiving benefits for essential bills and day-to-day.

Other people online have said they'd opened the same account prior to going BR and their OR had "no interest" in it and allowed it to be kept running and seeing as though it is a "BR-friendly" account from Co-OP they'd be little to no chance of the Co-Op closing it if they were informed of my insolvency.

Suffice to say, I have been approved for the account over the phone and will be using it for my payments in.

I have spoken to DWP about payment into a Post Office account as they do not issue cheques - it is just the Housing Benefit which can only be paid into a bank account in my name.

From your experience and as long as I explain this account to the judge and OR and my reasons for having it, would you say it should be kept 'usable'?

Kind regards and thanks in advance.

CCCS_Sue wrote: »

Hi danjaq2004 and thank you for your message

All bank accounts are usually ‘frozen’ by the bank when they find out you are going bankrupt. You need to make alternative arrangements for receiving money into your account and paying direct debits etc.
You should not try to open a new account before the bankruptcy order as this will also be frozen. Some banks will allow you to keep using your existing account, but it will still be frozen when they first hear about your bankruptcy.
If your benefit is paid into a bank account which is frozen, then you will
need to contact the Official Receiver dealing with your case, in order to see if you can get your money released to pay your essential living costs.
If your income only consists of benefit payments, you could open a Post Office card account after the bankruptcy order.
More details can be found on www.postoffice.co.uk
The Coop bank is also worth a try.

I have attached a link to a leaflet from the Insolvency Services website which will give you more detailed information on bank accounts in bankruptcy.

http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/bankaccount.pdf

Regards
Sue

debtinfo

danjaq2004 wrote: »

Sue, hi and thanks for your reply.

I have only just had a look at your response. Before doing so I was in touch with the National Debt Helpline. I explained that I had a Current Account with Barclays (where my benefits, JSA and Housing) are paid and a debt with Barclaycard too. They suggested that this account may be closed by Barclays due to the debt on the credit card, so meantime take out a Co-Op account. They further suggested that this account may or may not be frozen by the OR - if explaind to the judge and OR that this account is soley for receiving benefits for essential bills and day-to-day.

Other people online have said they'd opened the same account prior to going BR and their OR had "no interest" in it and allowed it to be kept running and seeing as though it is a "BR-friendly" account from Co-OP they'd be little to no chance of the Co-Op closing it if they were informed of my insolvency.

Suffice to say, I have been approved for the account over the phone and will be using it for my payments in.

I have spoken to DWP about payment into a Post Office account as they do not issue cheques - it is just the Housing Benefit which can only be paid into a bank account in my name.

From your experience and as long as I explain this account to the judge and OR and my reasons for having it, would you say it should be kept 'usable'?

Kind regards and thanks in advance.

I think CCCS sue is quite rightly only going to give you the official correct advice which is all pre bankruptcy accounts may be closed by the OR. In practice most people wh have a c-op cashminder before bankruptcy are able to carry on using it without it being frozen