Ask a CCCS counsellor a bankruptcy question

nornironbloke

Hi everyone,

Thanks for giving me the opportunity to post here.

My family and I moved from the Republic of Ireland to Northern Ireland in early 2008. I have owned an apartment in Dublin since 2005 which is currently rented out - we rent a house in Belfast. I work full time and my wife looks after our two young children.
The property in Dublin is slowly pulling us under. We have fought the good fight for almost 4 years now have reached the point where it's no longer feasible for us to continue. We have been getting steadily into debt in order to supplement the mortgage (a combination of 30% fall in rent received, consecutive mortgage interest rate rises, sterling collapse against the Euro, small wage cut and having a second child along the way!). Property prices have been falling since 2007 and show no signs of stopping. Where once we had some equity we now have considerable negative equity.
We have been on interest only for the past 6 months and have just arranged a 3 month moratorium.
Our debts are as follows:
4 credit cards (3 are 0% interest) = £6000
Overdraft in main current account = £1500 approx
A loan in my wife's name of approx = £6400
Total debt = £13,400.
We will have about €2000 in our RoI account by the time the moratorium is completed.
We lead an incredibly frugal, no frills, life and it's only because of this that the debts may be considered comparatively small. Our total monthly household income is £2325pm which is made up from my wages and children's allowance/credits.
The shortfall in the mortgage and the associated debts which have accrued because of the mortgage payments are costing us approximately £670pm. Once we take off the rent our family of 4 is living on less then £1000pm.
We own our car - it's worth approximately £4000.
I am considering bankruptcy. If we jettison the mortgage in the RoI I can quite easily repay the existing debts and we can start to rebuild our lives in the hope of buying in NI in 6 years time.

My questions are:
1. I presume bankruptcy is the best option for me.
2. My wife and I have a joint bank account. How best can I protect my wife's credit rating. I want to put as much distance between us.
3. I plan to continue repaying my wife's loan. Will the OR let me do this?
4. I am quite happy to continue to repay all credit card and overdraft debts. Will the OR ask me to contribute to the mortgage in the RoI as I would have a decent monthly surplus?
5. I could reduce the number of cards from 4 to 2 by transferring the balances. Is this advisable?
6. I have a Barclay's credit card. Should I clear this bearing in mind that I may need to open a basic account with them should I declare bankrupt?
7. My wife has opened a separate bank account. Is it advisable to start the transfer off funds for day-to-day living expenses before I go bankrupt?

StepChange_Pavan

Raspberry_Swirl wrote: »

Hi

My ex partner signed the house (which at the time we own jointly) over to me last year, but there's still a secured loan against it in both names. I can't just take his name off of the loan as the Halifax say that product no longer exists, and currently I can't afford to take out a new loan to cancel that one out as the repayments would jump by £150 a month.

He's now applying for bankruptcy (just found out) and obviously, this loan has been found by the agency doing the checking.

This loan was originally his debt. Is there anything I can do at the moment to avoid being connected to his bankruptcy, apart from telling him he can't go ahead with it?!

Many thanks

Hi Raspberry Swirl and thanks for your post.

If he were to go bankrupt, you would be solely liable for the secured loan.

The Official Receiver could also look into whether your ex partner has any ‘beneficial interest’ in the property, which could affect you if there’s any equity.

I’d definitely recommend that he gets some free and impartial advice as to whether bankruptcy is his best option.

He can get in touch with us if he hasn’t already.

Kind regards,
Pavan

Raspberry_Swirl

CCCS_Pavan wrote: »

Hi Raspberry Swirl and thanks for your post.

If he were to go bankrupt, you would be solely liable for the secured loan.

The Official Receiver could also look into whether your ex partner has any ‘beneficial interest’ in the property, which could affect you if there’s any equity.

I’d definitely recommend that he gets some free and impartial advice as to whether bankruptcy is his best option.

He can get in touch with us if he hasn’t already.

Kind regards,
Pavan

Hi Pavan

Many thanks for your response and advice. Just 1 more question!

You mention about the possibility of him having "beneficial interest" in the property. The house is solely in my name now and has been for about a year and he was paid off in the transfer of equity through solictors. Is there still some way they can go over that ruling then?

Thanks.

StepChange_Pavan

nornironbloke wrote: »

Hi everyone,

Thanks for giving me the opportunity to post here.

My family and I moved from the Republic of Ireland to Northern Ireland in early 2008. I have owned an apartment in Dublin since 2005 which is currently rented out - we rent a house in Belfast. I work full time and my wife looks after our two young children.
The property in Dublin is slowly pulling us under. We have fought the good fight for almost 4 years now have reached the point where it's no longer feasible for us to continue. We have been getting steadily into debt in order to supplement the mortgage (a combination of 30% fall in rent received, consecutive mortgage interest rate rises, sterling collapse against the Euro, small wage cut and having a second child along the way!). Property prices have been falling since 2007 and show no signs of stopping. Where once we had some equity we now have considerable negative equity.
We have been on interest only for the past 6 months and have just arranged a 3 month moratorium.
Our debts are as follows:
4 credit cards (3 are 0% interest) = £6000
Overdraft in main current account = £1500 approx
A loan in my wife's name of approx = £6400
Total debt = £13,400.
We will have about €2000 in our RoI account by the time the moratorium is completed.
We lead an incredibly frugal, no frills, life and it's only because of this that the debts may be considered comparatively small. Our total monthly household income is £2325pm which is made up from my wages and children's allowance/credits.
The shortfall in the mortgage and the associated debts which have accrued because of the mortgage payments are costing us approximately £670pm. Once we take off the rent our family of 4 is living on less then £1000pm.
We own our car - it's worth approximately £4000.
I am considering bankruptcy. If we jettison the mortgage in the RoI I can quite easily repay the existing debts and we can start to rebuild our lives in the hope of buying in NI in 6 years time.

My questions are:
1. I presume bankruptcy is the best option for me.
2. My wife and I have a joint bank account. How best can I protect my wife's credit rating. I want to put as much distance between us.
3. I plan to continue repaying my wife's loan. Will the OR let me do this?
4. I am quite happy to continue to repay all credit card and overdraft debts. Will the OR ask me to contribute to the mortgage in the RoI as I would have a decent monthly surplus?
5. I could reduce the number of cards from 4 to 2 by transferring the balances. Is this advisable?
6. I have a Barclay's credit card. Should I clear this bearing in mind that I may need to open a basic account with them should I declare bankrupt?
7. My wife has opened a separate bank account. Is it advisable to start the transfer off funds for day-to-day living expenses before I go bankrupt?

Hi nornironbloke and thanks for your post.

Your situation is quite complex and we would need to look at your situation as a whole to be able to advise whether bankruptcy is your best solution.

However, it’s unlikely that you will be allowed to continue paying some debts whilst bankrupt. Any joint debts with your wife will be affected.

I’d recommend that you give us a call on our free helpline and we can refer you to our specialist bankruptcy support team. You can call on 0800 138 1111 and we’re open Monday to Friday 8am - 8pm.

Kind regards,
Pavan

StepChange_Pavan

Raspberry_Swirl wrote: »

Hi Pavan

Many thanks for your response and advice. Just 1 more question!

You mention about the possibility of him having "beneficial interest" in the property. The house is solely in my name now and has been for about a year and he was paid off in the transfer of equity through solictors. Is there still some way they can go over that ruling then?

Thanks.

Hi again,

You would need to get some legal advice to clarify this. If the agreement was drawn up properly you may not have any problems.

Hope this helps.

Kind regards,
Pavan

Respite

CCCS_Pavan wrote: »

Hi Respite and thanks for your post.

It’s best to offer your creditors token payments whilst you save for your bankruptcy fees.

It’s important that you maintain the payments to your CCJ. If they’re too high for you to afford, you could vary the amount by using an N245 form and reduce it to £1 too. You can just explain that you’re saving for your bankruptcy fees.

I’d recommend that you get in touch as there could be other options available to you, and if bankruptcy is your best option we have a specialist team that can support you throughout the process.

You can use our online debt advice service Debt Remedy or call our free helpline on 0800 138 1111 to speak with an advisor. We’re open Monday to Friday 8am - 8pm.

I hope this helps.

Kind regards,
Pavan

Many thanks for your reply. I don't feel up to talking on the phone to anyone about my debts yet but thought I would explain my situation here, for now.

I defaulted on my unsecured debts almost 3 years ago and have been paying a minimum amount to creditors, every month, without fail. I had a lot of family issues to deal with, including living with an abusive, controlling (now ex) partner and caring for my adult son who has a mental health illness. The stress of family problems, and trying to work full time, led me to taking a lot of time off work. I eventually lost my job, through redundancy.

I have not had credit since a few months before my last default 3 years ago. I did receive redundancy payment and a lump sum in pension, 2 years ago. I intended to pay off all my debts with this money. Unfortunately, my partner had other ideas and basically frittered the money away. I am as much to blame, as I buried my head in the sand and was spending time caring for my son who was in and out of hospital (sectioned). I was extremely stressed, by my son's illness, losing my job, and being in a bad relationship. Once my redundancy and pension cash had been spent, my ex disappeared. I felt used and useless.

I am now living by myself, in a one bedroom rented flat, unable to work due to stress and taking anti-depressants. I am still my son's unofficial carer. I am still in debt and struggling. I'm afraid to go down the bankruptcy route even though it's really my only option,(debts are around £40,000) as I don't know how to explain that I defaulted on debts 3 years ago, but had a big payout 2 years ago that would have just covered my debts (including a CCJ) but spent the cash.

Could I still go bankrupt and if so, how could I explain the situation to the OR without coming across as a reckless spendthrift who had the money to pay the debts off, but didn't.

Hope this post makes sense, as I really am desperate for advice.

dakota76

hi - hope ive posted this in the right place. am currently on a dmp with cccs, but am looking at the iva/bankruptcy option. i have about 28k of unsecured debt. the problem i have is that i got divorced in july this year, after being seperted for 2 years, and my ex is currently in the process of remortgageing the ex marital home, so at the moment my name is still on the mortgage and deeds. I relinquished my share of the house when we split up, and this was stated in the divorce. should i wait until she has remortgaged until i proceed with the iva or bankruptcy. i have had some advice from a bankruptcy solicitor who said it shouldnt be a problem, but just wanted some reassurances.

StepChange_Pavan

Respite wrote: »

Many thanks for your reply. I don't feel up to talking on the phone to anyone about my debts yet but thought I would explain my situation here, for now.

I defaulted on my unsecured debts almost 3 years ago and have been paying a minimum amount to creditors, every month, without fail. I had a lot of family issues to deal with, including living with an abusive, controlling (now ex) partner and caring for my adult son who has a mental health illness. The stress of family problems, and trying to work full time, led me to taking a lot of time off work. I eventually lost my job, through redundancy.

I have not had credit since a few months before my last default 3 years ago. I did receive redundancy payment and a lump sum in pension, 2 years ago. I intended to pay off all my debts with this money. Unfortunately, my partner had other ideas and basically frittered the money away. I am as much to blame, as I buried my head in the sand and was spending time caring for my son who was in and out of hospital (sectioned). I was extremely stressed, by my son's illness, losing my job, and being in a bad relationship. Once my redundancy and pension cash had been spent, my ex disappeared. I felt used and useless.

I am now living by myself, in a one bedroom rented flat, unable to work due to stress and taking anti-depressants. I am still my son's unofficial carer. I am still in debt and struggling. I'm afraid to go down the bankruptcy route even though it's really my only option,(debts are around £40,000) as I don't know how to explain that I defaulted on debts 3 years ago, but had a big payout 2 years ago that would have just covered my debts (including a CCJ) but spent the cash.

Could I still go bankrupt and if so, how could I explain the situation to the OR without coming across as a reckless spendthrift who had the money to pay the debts off, but didn't.

Hope this post makes sense, as I really am desperate for advice.

Hi again,

It certainly sounds as though you’ve been through a tough time.

You still have the option to go bankrupt, and considering your circumstances I hope that the Official Receiver would be understanding. It’s likely that they will question what happened to the money but you will be given the opportunity to explain and if you have evidence to support this (such as your son’s illness) you shouldn’t have a problem.

In the worst instance, you would still be allowed to go bankrupt but it may last longer than the usual 12 months.

If you’re not up to speaking to anyone, I would still recommend our online counselling service Debt Remedy (http://www.cccs.co.uk/ref/drcu). This will help to determine whether it is your only option and there is the facility to chat instantly with one of our counsellors. They will be able to access the information you input and so will be able to give more detailed advice.

I hope this helps.

Kind regards,
Pavan

StepChange_Pavan

dakota76 wrote: »

hi - hope ive posted this in the right place. am currently on a dmp with cccs, but am looking at the iva/bankruptcy option. i have about 28k of unsecured debt. the problem i have is that i got divorced in july this year, after being seperted for 2 years, and my ex is currently in the process of remortgageing the ex marital home, so at the moment my name is still on the mortgage and deeds. I relinquished my share of the house when we split up, and this was stated in the divorce. should i wait until she has remortgaged until i proceed with the iva or bankruptcy. i have had some advice from a bankruptcy solicitor who said it shouldnt be a problem, but just wanted some reassurances.

Hi there,

I’ve replied to your previous post on our other thread. Like I mentioned if you have any more questions, please give us a call.

Kind regards,
Pavan

mindarie

I am being chased for debts of 30k and i have been issused with a demand for the full amount or they will start bc proceeding my question is my house is in joint names can they go for our house when the 30 k I owe is in my name