Ask a CCCS counsellor a bankruptcy question

StepChange_James

SoletraderSteve wrote: »

Hi I currently have a CCCS DMP which I have just set up 2 months ago but unable to make payments and have outstanding debts on credit cards/pay day loans of just under £8000 currently 26 living with parents working 8 hours per week. Is there any way I can get a debt relief order and have everything written off, it doesn't bother me about any short term effect on my credit score etc.

I just want them wiped asap so I can start a fresh,

Thanks

Hi Steve,

The basic criteria for a DRO are that you need under £15k of debt, less than £50 a month spare for debts after living costs and assets worth less than £300 (apart from vehicles which have to be worth less than £1,000). A DRO lasts a year, so you also need to be fairly confident that your situation isn't going to change a lot in the next 12 months.

If you meet these basic criteria then it could be worth look at, but I couldn't say for sure without more of your details. I would recommend speaking to our Client Support team about this, as they already have your financial information. If a DRO is a good option they will pass you through to our DRO specialist team who can help you put in an application.

Hope this helps.

James

tim049

I went bankrupt in July 2009 and was discharged in January 2010. I have just got a credit report from Equifax which shows that three of the accounts I had before bankruptcy are still showing as being in default.

Is this harmful to my credit rating or is there some way to have these entries cleared.

Thank you.

StepChange_James

tim049 wrote: »

I went bankrupt in July 2009 and was discharged in January 2010. I have just got a credit report from Equifax which shows that three of the accounts I had before bankruptcy are still showing as being in default.

Is this harmful to my credit rating or is there some way to have these entries cleared.

Thank you.

Hi Tim and welcome to the forum,

There is not much that you can do about these default notices but I doubt they will really be making a significant difference to your credit rating.

Bankruptcy is the worst thing that you can do to your credit rating and will stay on your file for six years from when you went bankrupt.

So in July 2015 it should drop off your credit history. The default notices also stay on your credit report for 6 years so will drop off before the bankruptcy does.

Hope this helps.

James

tigerfeet2006

tim049 wrote: »

I went bankrupt in July 2009 and was discharged in January 2010. I have just got a credit report from Equifax which shows that three of the accounts I had before bankruptcy are still showing as being in default.

Is this harmful to my credit rating or is there some way to have these entries cleared.

Thank you.

CCCS James advice is spot on but you can help by cleaning up your credit files.

The Credit Reference File Clean Up sticky
https://forums.moneysavingexpert.com/discussion/677875

There are several people who are very knowledgeble about it on the main BR board.

lexy1981

Hi, I am a newbie here so please be gentle with me.

After unsuccesfully trying to juggle my masses of debt for the past few years I have realised that my only option now is bankruptcy; i have read through mounds of info relating to bankruptcy over the last month and feel that I reasonably understand the majority of it, however there is 1 grey area that I am not certain about and feel that I really need to understand this before I go any further.

My home is in negative equity, jointly owned with my husband; we have recieved advice that in this situation it is possible for my husband to buy back my interest in the property after bankruptcy for the minimal sum of £1 + legal costs however when checking on official websites such as the Insolvancy Service advice does indicate the interest can be purchased by my husband however it does not indicate what the likely purchase cost would be. As you can understand I do not want to proceed any further until I fully understand all of the facts therefore would appreciate if you could clarify this for me??

System

lexy1981 wrote: »

Hi, I am a newbie here so please be gentle with me.

After unsuccesfully trying to juggle my masses of debt for the past few years I have realised that my only option now is bankruptcy; i have read through mounds of info relating to bankruptcy over the last month and feel that I reasonably understand the majority of it, however there is 1 grey area that I am not certain about and feel that I really need to understand this before I go any further.

My home is in negative equity, jointly owned with my husband; we have recieved advice that in this situation it is possible for my husband to buy back my interest in the property after bankruptcy for the minimal sum of £1 + legal costs however when checking on official websites such as the Insolvancy Service advice does indicate the interest can be purchased by my husband however it does not indicate what the likely purchase cost would be. As you can understand I do not want to proceed any further until I fully understand all of the facts therefore would appreciate if you could clarify this for me??

Hi Lexy and welcome to the forum.

The purchase price of the property will be determined by the official receiver who deals with the bankruptcy and they will come to this figure by looking at how much they value your beneficial interest, which is the term they use to describe your share of the equity in the property. If there is no equity then they will usually set the beneficial interest at £1.

Here is a useful booklet about what will happen to your home in bankruptcy: http://webarchive.nationalarchives.gov.uk/+/http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/home.pdf.

It sounds like you have done a lot of research about bankruptcy already but if you would like a second opinion you could use our online advice toold, Debt Remedy (http://www.cccs.co.uk/ref/drcu). If it recommends bankruptcy to you then it will give you contact details for our bankruptcy support team, who are specialise in supporting people through the bankruptcy process.

All the best

Mat

lexy1981

Hi, totally forgot to ask; How soon after declaring myself bankrupt can my husband approach the OR regarding purchasing my interest?

Thanks

Lexy

lexy1981

I have been informed by another poster that when there is negative equity the interest can be purchased back, however the amount to purchase back the interest changed from £1 to £1000 last year. Is this right?

Thanks

Mouse1812

Yup £1,000 plus legal fees, all here

http://www.insolvencydirect.bis.gov.uk/freedomofinformation/technical/CaseHelpManual/S/SaleBankruptsInterestJointlyOwnerProperty.htm

System

lexy1981 wrote: »

I have been informed by another poster that when there is negative equity the interest can be purchased back, however the amount to purchase back the interest changed from £1 to £1000 last year. Is this right?

Thanks

Hi Lexy,

I’m really sorry, the information in my previous post was out of date, as Mouse has pointed out this system has changed now and the rules are different. The low cost transfer scheme, which allowed the beneficial interest of a property to be sold for £1 was cancelled. The guidance for Official Receivers is that they can accept reasonable offers for the beneficial interest when there is negative equity, which at the moment has to be at least £1000.

If the beneficial interest is not sold then the OR has two years and three months that they would be entitled to any beneficial interest if the property swung out of negative equity. Whether it is worth paying the £1000 would depend on how likely you thought it was that the property would have any equity in it in the next two years and three months.

I apologise for the confusion this has caused.

Regards

Mat