Ask a CCCS counsellor a bankruptcy question

Mary98

I have had an arrangement with a debt management company for about two years now.I am expecting some money soon and I have been offered to pay a reduced lump sum to finish off the debts sooner.I however have found ouit that the companies would put "partially settled" on my credit file.I am not sure what to do ,whether I should just accept the partially ettled status or tryu and get more money so that the debts can be fully repaid.I am particularly worried about the effect the partially settled status would have on me in the future,as I would still wish to have the chance to borrow money and also I am not sure what effect it would have on my children's ability to borrow in the future.

StepChange_Pavan

WorriedWife wrote: »

Can anyone advise, my OH is a sole trader, and painful story short he could be liable for damages that would exceed his assets (savings, vehicles).

He ideally needs to avoid bankruptcy as it is thought it would impact upon his professional qualifications.

Putting the impact on his future to one side, the only remaining asset is the house (there is £60K equity but still may not be sufficient to cover damages) but I co-own this on the mortgage.

Now I know I am not liable for his personal debt but as this is a joint asset would I have to buy him out of the mortgage to save the house?

Hi WorriedWife, and thanks for your post

As your house is a joint asset, they would only be entitled to his share of the equity. However, this sounds like quite a complex situation and we would need to know more to be able to advise fully.

I’d recommend that your husband gives us a call so that we can explore all of the options that are available to him. He can call us on 0800 138 1111 and we’re open Monday to Friday 8am - 8pm.

Kind regards,
Pavan

StepChange_Pavan

Mary98 wrote: »

I have had an arrangement with a debt management company for about two years now.I am expecting some money soon and I have been offered to pay a reduced lump sum to finish off the debts sooner.I however have found ouit that the companies would put "partially settled" on my credit file.I am not sure what to do ,whether I should just accept the partially ettled status or tryu and get more money so that the debts can be fully repaid.I am particularly worried about the effect the partially settled status would have on me in the future,as I would still wish to have the chance to borrow money and also I am not sure what effect it would have on my children's ability to borrow in the future.

Hi Mary98 and thanks for your post.

Firstly, your credit history will not affect your children provided that you don’t have any joint debts or they are not guarantors for any of your debts (obviously if they’re under 18, this wouldn’t be the case!).

You’re right that if you don’t repay your debts in full, they won’t be fully settled. However, anything that is on your credit file will only remain on there for 6 years. If you take longer to repay these debts in full, these debts may stay on your file for that bit longer.

Ultimately, it’s your decision whether you decide to repay your debts in full and either way it will take time to rebuild your credit history once you are debt free. You may also prefer to save for items in advance, rather than relying on credit in the future.

If you are looking to improve your credit file, you will find this article really useful: http://www.moneysavingexpert.com/loans/credit-rating-credit-score.

I hope this helps.

Kind regards,
Pavan

VinJones99

Some advice please.
I was declared bankrupt in April 2009 and discharged April 2010. Since then I have been paying a sum of £470pcm deducted at source.
I cannot get any high rate credit cards to kick start my credit rating and nor can I get any kind of mobile phone contract.
My job pays well and I am also trying to rent a nice place but credit checks prevent me from letting a decent place.
What can I do?

[Deleted User]

Hi,

My question relates to whether someone who has declared themselves bankrupt can still be liable for debts that they failed to inform the official receiver of.

The full details: My sister and a colleague took on the lease of a pub and ran the premises for four years. They were operating as a partnership and with the pub chain, joint tenants, his name first on the tenancy agreement. They leased the pub from a large pub management company. During that time they invested approx. £10,000 into the property and furnishings. My sister had the better credit rating and is much more organised so most of these bills were arranged under her name, trading under the pub's name. The pub was not a success and neither of them ever drew an income; we all thought that they were covering their overheads but that now appears to not be the case.

They left the first pub and set themselves up in a second. During this time the colleague declared himself bankrupt, to get himself off paying some credit card bills. He was too lazy to inform the official receiver of the approx. £10,000 of debt, of which he was 50% liable.

She has now moved on and got herself a normal day job.

The six companies who are owed money have passed the debts onto debt collection agencies. During this transfer the "trading as" second line has been removed and the debt has just my sister's name on them. So she is been chased for 100% of the debt.

She has just spoken to the official receiver and he claims that my sister is liable for 100% of the debt. If the bankruptee had informed the official receiver before his bankruptcy then all these debts could have been included; however, as that wasn't done, nothing can now be done.

This seems utterly ridiculous! Why should someone (my sister) be responsible for someone else's failure to act and be responsible?

What action can she take:
(1) With the official receiver: Can he include these debts in a finished bankruptcy case?
(2) With the creditors: Regarding her only owing them 50% of their debts?
(3) With her former colleague: Can she legally force him to sign a document stating that half these debts are his and as such he will pay 50% of them?

StepChange_Pavan

VinJones99 wrote: »

Some advice please.
I was declared bankrupt in April 2009 and discharged April 2010. Since then I have been paying a sum of £470pcm deducted at source.
I cannot get any high rate credit cards to kick start my credit rating and nor can I get any kind of mobile phone contract.
My job pays well and I am also trying to rent a nice place but credit checks prevent me from letting a decent place.
What can I do?

Hello VinJones99 and thanks for your post.

Unfortunately bankruptcy will affect your credit rating and will remain on your file for 6 years.

You can read this useful article on how to improve your file, although it’s likely that you’ll be restricted to what you can do because of the bankruptcy: http://www.moneysavingexpert.com/loans/credit-rating-credit-score

With regards to phone contracts and tenancy agreements, you might be accepted if you offer a larger deposit or ask someone to act as a guarantor. It’s important that you can afford any agreements that you enter especially if you are asking someone to be a guarantor.

I hope this helps.

Kind regards,
Pavan

StepChange_Pavan

Deleted_User wrote: »

Hi,

My question relates to whether someone who has declared themselves bankrupt can still be liable for debts that they failed to inform the official receiver of.

The full details: My sister and a colleague took on the lease of a pub and ran the premises for four years. They were operating as a partnership and with the pub chain, joint tenants, his name first on the tenancy agreement. They leased the pub from a large pub management company. During that time they invested approx. £10,000 into the property and furnishings. My sister had the better credit rating and is much more organised so most of these bills were arranged under her name, trading under the pub's name. The pub was not a success and neither of them ever drew an income; we all thought that they were covering their overheads but that now appears to not be the case.

They left the first pub and set themselves up in a second. During this time the colleague declared himself bankrupt, to get himself off paying some credit card bills. He was too lazy to inform the official receiver of the approx. £10,000 of debt, of which he was 50% liable.

She has now moved on and got herself a normal day job.

The six companies who are owed money have passed the debts onto debt collection agencies. During this transfer the "trading as" second line has been removed and the debt has just my sister's name on them. So she is been chased for 100% of the debt.

She has just spoken to the official receiver and he claims that my sister is liable for 100% of the debt. If the bankruptee had informed the official receiver before his bankruptcy then all these debts could have been included; however, as that wasn't done, nothing can now be done.

This seems utterly ridiculous! Why should someone (my sister) be responsible for someone else's failure to act and be responsible?

What action can she take:
(1) With the official receiver: Can he include these debts in a finished bankruptcy case?
(2) With the creditors: Regarding her only owing them 50% of their debts?
(3) With her former colleague: Can she legally force him to sign a document stating that half these debts are his and as such he will pay 50% of them?

Hello Deleted_User and thank you for your post.

Unfortunately there isn’t any formal action that your sister can take. She is joint and severally liable for the debts, which means that she can be chased and is fully responsible for the total outstanding debt.

Whether her former colleague included the debts in his bankruptcy or not doesn’t affect her liability – it would only diminish his responsibilities.

She can’t force him into signing a document and if he is still bankrupt he couldn’t do this. She doesn’t have a case to take to the Official Receiver as she is now liable for the debts.

Her only option would be to make an agreement with her former colleague that he will pay her 50% of the debt after he has been discharged from the bankruptcy. However, there is no legal action she can take.

This blogpost might help to explain joint loans: http://moneyaware.co.uk/2011/09/we-got-a-joint-loan-now-weve-split-who-has-to-pay/

If your sister is struggling to pay the outstanding debt, she can contact us for some detailed advice.

I hope this helps.

Kind regards,
Pavan

LearningSlowly_2

Hi,

I'd be really grateful for some initial advice from a counsellor. I'm not seeking sympathy, as almost entirely from compulsive gambling, but I'm terrified about how it's now going to affect me and my partner.

I currently have an unmanageable amount of debt, which amounts to around £400 more per month than my income. There's limited scope for cut-backs as virtually all of my outgoings are repayments to credit cards, which are mainly over their limit.

One of the main problems is that many of these debts are in my partner's name, and he's run out of space for covering this. I've heard that dmp's etc can be entered into jointly, but how exactly would this affect things? I was also told by one counsellor that I have to just pay everything that's in my name and leave my partner to his problems for having made the mistake of helping me, but he's hinted that, as my debts to him are more or less the same as his income, that I'd then have to make sure all the rent, council tax etc for both of us is paid.

My income is unlikely to rise, and there's a risk his may reduce - would bankruptcy be the better option? And since there are debts in my partner's name, would he then have to do the same?

Please help,
LS

LearningSlowly_2

LearningSlowly wrote: »

Hi,

I'd be really grateful for some initial advice from a counsellor. I'm not seeking sympathy, as almost entirely from compulsive gambling, but I'm terrified about how it's now going to affect me and my partner.

I currently have an unmanageable amount of debt, which amounts to around £400 more per month than my income. There's limited scope for cut-backs as virtually all of my outgoings are repayments to credit cards, which are mainly over their limit.

One of the main problems is that many of these debts are in my partner's name, and he's run out of space for covering this. I've heard that dmp's etc can be entered into jointly, but how exactly would this affect things? I was also told by one counsellor that I have to just pay everything that's in my name and leave my partner to his problems for having made the mistake of helping me, but he's hinted that, as my debts to him are more or less the same as his income, that I'd then have to make sure all the rent, council tax etc for both of us is paid.

My income is unlikely to rise, and there's a risk his may reduce - would bankruptcy be the better option? And since there are debts in my partner's name, would he then have to do the same?

Please help,
LS

Also, will my job make a difference?

System

LearningSlowly wrote: »

Hi,

I'd be really grateful for some initial advice from a counsellor. I'm not seeking sympathy, as almost entirely from compulsive gambling, but I'm terrified about how it's now going to affect me and my partner.

I currently have an unmanageable amount of debt, which amounts to around £400 more per month than my income. There's limited scope for cut-backs as virtually all of my outgoings are repayments to credit cards, which are mainly over their limit.

One of the main problems is that many of these debts are in my partner's name, and he's run out of space for covering this. I've heard that dmp's etc can be entered into jointly, but how exactly would this affect things? I was also told by one counsellor that I have to just pay everything that's in my name and leave my partner to his problems for having made the mistake of helping me, but he's hinted that, as my debts to him are more or less the same as his income, that I'd then have to make sure all the rent, council tax etc for both of us is paid.

My income is unlikely to rise, and there's a risk his may reduce - would bankruptcy be the better option? And since there are debts in my partner's name, would he then have to do the same?

Please help,
LS

Hi LS and thanks for your post.

It sounds like you would benefit from some free and impartial advice.

Any debts that are in your partners name will be seen by creditors as his responsibility. However, I’d advise looking as a couple at what solutions are available to you both.

If you petitioned for you own bankruptcy only debts in your name would be included in the bankruptcy, any debts in your partners name would be his responsibility to service.

I would initially look at the situation jointly (if you can) and then look at what debt solutions this presented. It would be useful initially to look at a joint household budget.

If your partner is not willing to look at a joint debt solution due to the possible impact on his credit rating you should give us a call directly for more advice.

If you do wish to work together then I’d suggest that the first thing to do is visit our online debt advice service Debt Remedy (http://www.cccs.co.uk/ref/drcu) to help you find a solution to your debt problem quickly.

Debt Remedy will assist you in completing a financial statement with information on your household, employment, income, expenditure and debts. From this the service will automatically determine your options.

To help you fill in the form, it’s best to gather together information about:
• Your income
• Your expenditure
• The creditors you owe money to

You’ll receive a downloadable advice booklet providing a tailored solution for you based on your current circumstances and advice on ways you may be able to improve your situation.

If you’re not confident with computers or would like to speak to an advisor then you’re welcome to ring our free Helpline on 0800 138 1111. We’re open Monday to Friday 8am - 8pm.

If you phone us it may be possible to refer you directly to a counsellor for immediate advice. Alternatively, we will arrange for an appointment to be booked at a time convenient for you.

I hope this helps.

Kind regards,

Mat