Ask a CCCS counsellor a bankruptcy question

1worried1

Hi,
I am half way through filling in BR forms and am stuck about my income, I do get a work bonus every year in march but we never know what it will be as its personal & company performance based. Should I divide what I got last year into monthly payments? or just put down my normal montly wage and tell the OR when I have the interview that I get a bonus? I know I will have to pay all the bonus to them (and I don't mind that)but will they just let me pay the lump sum in the march when I receive it? or make me break it down into monthly payments? if they do make me break it down I wouldn't be able to afford all my monthly outgoings :-(

StepChange_Pavan

1worried1 wrote: »

Hi,
I am half way through filling in BR forms and am stuck about my income, I do get a work bonus every year in march but we never know what it will be as its personal & company performance based. Should I divide what I got last year into monthly payments? or just put down my normal montly wage and tell the OR when I have the interview that I get a bonus? I know I will have to pay all the bonus to them (and I don't mind that)but will they just let me pay the lump sum in the march when I receive it? or make me break it down into monthly payments? if they do make me break it down I wouldn't be able to afford all my monthly outgoings :-(

Hi 1worried1 and thanks for your post.

I wouldn’t recommend that you use last year’s figure as it’s not guaranteed to be the same this year. Discuss it with your OR at the interview and it’s likely that they’ll ask for it in a lump sum rather than spreading it over the months.

Hope this helps.

Kind regards,
Pavan

1worried1

ok great thanks. Do you think they will take 100% of bonus?
Also another question on the forms about who has an intrest in your property.
I own a property with my husband, who I separted from 2 years ago, since that time he has had no contact and not made any payments to mortagage or to our daughter, but he did have a debt secured against the property earier this year. Should I put down this charging order on my forms, the debt was all in his name and nothing to do with me. repossession date is 1st dec but moving into rental tomorrow and giving keys back to martgage company before my br court date next friday.

StepChange_Pavan

1worried1 wrote: »

ok great thanks. Do you think they will take 100% of bonus?
Also another question on the forms about who has an intrest in your property.
I own a property with my husband, who I separted from 2 years ago, since that time he has had no contact and not made any payments to mortagage or to our daughter, but he did have a debt secured against the property earier this year. Should I put down this charging order on my forms, the debt was all in his name and nothing to do with me. repossession date is 1st dec but moving into rental tomorrow and giving keys back to martgage company before my br court date next friday.

Hi again,

You should include your husband on the forms as he may still have some interest in the property (assuming that he contributed to it when he lived there). If there is any equity, his creditors may be entitled to some of it. You would need to prove that he has not made any payments over the last two years.

If you have any more questions I’d recommend that you call our free Helpline, as they will be able to refer you on to our specialist bankruptcy support team. They will talk you through the forms to make sure you haven’t missed anything. You can call free on 0800 138 1111 and lines are open Monday to Friday 08:00-20:00.

Kind regards
Pavan

SteveABC

I have some questions about the bankruptcy process and how to get my home voluntarily repossessed. After seeking advice bankruptcy seems my only option, but I also need to move out of my home and secure a rented property before bankruptcy. My questions are:
1. Do I move out first, then file for bankruptcy? 2. Do I post the keys back to the lender explaining that I have been made bankrupt and giving them OR details? 3. When the house is ultimately sold, there will be a substantial shortfall due to negative equity - will this be added to my bankruptcy debt? 4. My estranged wife, who is joint owner of the secured debts left me and went bankrupt over a year ago. Assuming she is now discharged, will she be pursued for the shortfall by the secured lenders? 5. Will I be pursued for the shortfall after my bankruptcy is discharged?

Thank you.

Goldendolphin

Hi,

I'd love some advice on bankruptcy. I was considering this option last year but decided to continue on paying my debts off, but things have changed. A bit of background.
I stopped working in Mar 2009 due to loosing contract 2 months early. I was pregnant and took time off to have baby. I am now pregnant again and due at the end of Feb 2011. (I havent returned to work since) I live on my own and recieve working tax credits, child tax credits, housing benefit, council tax benefit, child benefit and child maintenence.
I have a property which I recieve rental income from. The house has recently been valued at about £20k under the mortgaged amount. I am only paying interest only on the mortgage and this comes out of the rental. I know next Jun the payments will revert to full and I wont be able to afford it.
I also have CC debts and now a HMRC bill. I recently recieved a letter saying HMRC were going to come to the house as they wanted more than THE £10 a month I have been paying them.
My questions are:
1. With the tax credits and benefits I recieve will I have to pay money back through the bankruptcy? I also recieve child maintenence too.
2. I am classed as self employed so I think I will be entitled to maternity pay. If I take that, will that affect my repayments for bankruptcy? If so, would I be better of just not applying for the maternity pay?
3. I have a DFS sofa that I am making repayments on. Will that be taken into the bankruptcy and will I loose the sofa?
4. I am just about to move house, (as the HB rate is changing so need to find somewhere cheaper), I will need to buy some furniture. What is seen as 'excessive expenditure' if I go bankrupt? E.g. I need to buy a bed, a TV, some storage things etc for the new place. I'm not planning on spending high end prices but will they expect me to get things cheap or free?
5. I'm privately renting. I know Foxtons dont do credit checks on clients. If I move after BR will I have to declare it to agent / landlord? I'm thinking I will either have to use private landlords or Foxtons if they dont credit check to be able to find somewhere.
6. The grants I get from pregnancy, (£190 Hip AND £500 sure start). Can I withdraw these in cash before the BR to keep them safe?
7. Before all this I had a well paying job, will the OR question my spending from then as I really cant remember what I spent on etc. Plus I had no intention at the time of not working.
8. When I eventually return to work, will be probably after the 1st year of BR, will I then have to pay back money if I am earning enough or is it all cleared?
9. When I go BR how do I get the money in my account if they freeze it and where would I get benefits paid into? I'm worried about the change over getting a new account set up in time to recieve my benefits and maybe missing some.

Sorry for the long post! Hope someone can help

Many thanks

GD

StepChange_Pavan

SteveABC wrote: »

I have some questions about the bankruptcy process and how to get my home voluntarily repossessed. After seeking advice bankruptcy seems my only option, but I also need to move out of my home and secure a rented property before bankruptcy. My questions are:
1. Do I move out first, then file for bankruptcy? 2. Do I post the keys back to the lender explaining that I have been made bankrupt and giving them OR details? 3. When the house is ultimately sold, there will be a substantial shortfall due to negative equity - will this be added to my bankruptcy debt? 4. My estranged wife, who is joint owner of the secured debts left me and went bankrupt over a year ago. Assuming she is now discharged, will she be pursued for the shortfall by the secured lenders? 5. Will I be pursued for the shortfall after my bankruptcy is discharged?

Thank you.

Hi SteveABC and thank you for your post.

I have replied to the message you sent us privately, so I hope you're able to send us your details so we can help you further.

Kind regards
Pavan

CCCS_Sue

Goldendolphin wrote: »

Hi,

I'd love some advice on bankruptcy. I was considering this option last year but decided to continue on paying my debts off, but things have changed. A bit of background.
I stopped working in Mar 2009 due to loosing contract 2 months early. I was pregnant and took time off to have baby. I am now pregnant again and due at the end of Feb 2011. (I havent returned to work since) I live on my own and recieve working tax credits, child tax credits, housing benefit, council tax benefit, child benefit and child maintenence.
I have a property which I recieve rental income from. The house has recently been valued at about £20k under the mortgaged amount. I am only paying interest only on the mortgage and this comes out of the rental. I know next Jun the payments will revert to full and I wont be able to afford it.
I also have CC debts and now a HMRC bill. I recently recieved a letter saying HMRC were going to come to the house as they wanted more than THE £10 a month I have been paying them.
My questions are:
1. With the tax credits and benefits I recieve will I have to pay money back through the bankruptcy? I also recieve child maintenence too.
2. I am classed as self employed so I think I will be entitled to maternity pay. If I take that, will that affect my repayments for bankruptcy? If so, would I be better of just not applying for the maternity pay?
3. I have a DFS sofa that I am making repayments on. Will that be taken into the bankruptcy and will I loose the sofa?
4. I am just about to move house, (as the HB rate is changing so need to find somewhere cheaper), I will need to buy some furniture. What is seen as 'excessive expenditure' if I go bankrupt? E.g. I need to buy a bed, a TV, some storage things etc for the new place. I'm not planning on spending high end prices but will they expect me to get things cheap or free?
5. I'm privately renting. I know Foxtons dont do credit checks on clients. If I move after BR will I have to declare it to agent / landlord? I'm thinking I will either have to use private landlords or Foxtons if they dont credit check to be able to find somewhere.
6. The grants I get from pregnancy, (£190 Hip AND £500 sure start). Can I withdraw these in cash before the BR to keep them safe?
7. Before all this I had a well paying job, will the OR question my spending from then as I really cant remember what I spent on etc. Plus I had no intention at the time of not working.
8. When I eventually return to work, will be probably after the 1st year of BR, will I then have to pay back money if I am earning enough or is it all cleared?
9. When I go BR how do I get the money in my account if they freeze it and where would I get benefits paid into? I'm worried about the change over getting a new account set up in time to recieve my benefits and maybe missing some.

Sorry for the long post! Hope someone can help

Many thanks

GD

Hi GD and thank you for your message

Going bankrupt is a big step to take, so it makes sense to get as much information as you can before you decide whether bankruptcy is your best option.
After the bankruptcy order, you do not have to make any further payments to most of your creditors.
However, one of the aims of bankruptcy is that creditors should receive at least some payment of what they are owed. They can therefore look at selling any assets you own, such as property so that the money can be split between your creditors. The official receiver can also ask you to agree to make contributions towards your bankruptcy debts if you can afford to, for a period of time, usually three years. This is known as an IPA (Income payment arrangement). The Official Receiver will look at your budget as a whole and will make sure you have enough for reasonable domestic needs. If you are entitled to maternity pay, then you need to claim it as the OR may question why you have not done so. You will need to declare all money you receive prior to the bankruptcy and during the bankruptcy.

I have attached a link to a leaflet issued by the Insolvency service which will give you further information.

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

The OR would not be interested in taking your sofa, but the loan from DFS would be included in the bankruptcy.
Any purchases you make before your bankruptcy will be looked at and questioned by the OR.
It would make sense to keep this spending to a minimum and only buy essentials necessary for moving. Keep receipts and proof of purchase.
It is best to be upfront and advise your landlord you are going bankrupt. Some may ask for a guarantor to safeguard future payments, or they may ask for a few months rent in advance.
Do check your new tenancy agreement to make sure there is no clause regarding bankruptcy.

It is difficult to give you full detailed advice via the forums.

Making yourself bankrupt is a big step to take and requires expert advice. If you are considering making yourself bankrupt, you can use our online debt counselling service, which will provide you with the most appropriate solution
to your debt problem. Alternatively contact our free Helpline on 0800 138 1111.
We do have a bankruptcy support team available if your best option is bankruptcy and they can give you ongoing help and support.

Regards
Sue

CCCS_Sue

Collymilad wrote: »

Hi,

I found out today that my mum has council tax arrears which were being paid off monthly at £300/month. However because of a student discount error by the council it turns out she £2000 more in arrears in relation to amount that was previously owed. Now the council (Angus, Scotland) has stated that she 2 weeks to pay the full £2000 or she will be made bankrupt.

My real questions are firstly if they are allowed to do this or if they are using bullying tactics, we were only notified about these arrears very recently. Secondly we are going to offer them £500 in the next week and the other £1500 within the next 4-5 weeks, do you think they will accept this?

My final question is I was told that the bankruptcy can be stopped if it is deemed unfair (on the councils part) and we are showing a genuine desire to and attempting to pay the money owed. Is this true?

I appreciate any advice you can give me,
Thanks
Colin

Hi Colin and thank you for your message

Council tax is a priority debt and the council are able to take further action if the debt is not paid.

I am not sure of your mum’s full details, but before they can look at taking further action, they would need to issue a ‘summary warrant’.

Once a summary warrant has been granted the council must serve you with a 'charge for payment'; and offer you time to pay the debt.

You can apply to the sheriff for time to pay your Council Tax debt. This is called a 'time to pay order'. If your time to pay order application is granted and you keep making the payments ordered, the council cannot make you bankrupt or use diligence against you (this includes enforcement action such as arrestment of wages).

So that we can look into this further for her, I would recommend that your mum calls us as soon as possible for an appointment to speak to one of our debt counsellors. The free helpline number is 0800 138 1111. Lines are open from 08.00 until 20.00 Monday to Friday.

Regards
Sue

GazW

Hi I hope you can answer a couple of questions for me and offer some advice. Bit of a long story so I will try and keep this as short as possible.

Around 10-12 years ago I took out a loan with the Royal Bank of Scotland for 12500. At the time I was about 18 and a bit stupid with money and got myself into a mess with a fair few other debts and this one kind of took a back seat while I sorted my other debts out. They’ve written a lot over the years and applied all sorts of interest charges and PPI (which I never agreed to) and the total I now owe is almost £30k. A few years ago I requested the credit agreement from them and it turned out they couldn’t locate it. I asked them to take this to court to get this sorted which they did, but as the day drew near I got a bit scared and decided to just sign the paperwork admitting the debt and offering to pay it off at £5 per month (I was out of work at the time). This was accepted and I have paid them every month without fail since then.

A couple of weeks ago I got a letter from another company stating that I had defaulted on the payments (the company was called Regal Credit Consultants). I checked and I have records going back to June 2007 when I started paying them and I have proof that I have paid them every month and on time as well. When I rang them they started hassling me to do a statement of incomings and outgoings over the phone, which I declined to do. They then sent another letter (in the letters there is no mention of doing the statement, it just says I have defaulted and they want payment in full). I have sent a letter back to them stating that I have not defaulted and would be willing to provide evidence of this if they can let me know which months they thinkI have not paid. So far I have heard nothing back.

So my questions are as follows:
1) Are they allowed to ask me again about my incomings and outgoings after the debt has gone to court and I have a copy of the order agreeing for me to pay £5 a month.
2) If they took me to court again would I have the right to question the amount of interest added to the debt and the PPI?
3) Am I allowed to declare myself bankrupt on one debt? I have been told that I will need minimum 3 debts to declare bankruptcy but I have not found any information on this. The reason I am now considering bankruptcy is we have our first baby due in 4 weeks time and next year I am giving up work to look after the child as my wife earns more than me so I will not have any actual income from about June next year.
4) If I do declare bankruptcy will they look into my wife’s finances as well as mine? I am worried as she bought a new car at the beginning of this year that she is still paying off and I am worried that this will be taken from her, the car is in her name and she pays for it out of her bank account. This debt was taken out long before I met her so was hoping to keep her out of this as much as possible.

I might have other questions as things progress on but any help/advice you could give me now would be much appreciated.