Ask a CCCS counsellor a bankruptcy question

baby_miece

Hi there! I was wondering if you could answer a few questions.... I am in about £10k of debt half of which is a loan that was given to me after my ex did a runner in 2006 (joint bank account). I have a new baby and I am struggling very much to survive financially and it is like a spiral that keeps spinning. I am now looking into an DRO, so my questions are:

1. Does the OR take into account of my current partners earnings when assessing me for a DRO? If not, do I include expenditure for my daughter?As obviously I get those benefits and that money is spent on nappies etc for her.

2. I will be studying a degree in midwifery in Sept....will this affect the DRO and will the NHS bursary/student loan be considered as extra money!?!

3. Will my application be rejected if they believe I spend too much on say emergency house fund or hair cut?

4. Are all benefits included in the benefits section/income?

5. I have 3 bank accounts - 1 with HSBC where my loan is, 1 with Natwest where I have O/D and one with Llloyd which is joint with my partner! Now will these accounts be closed because of the DRO?

diddly74

Thanks Matthew for that information.

Our bank accounts (that we can use) are both with Barclays and Co op so I am hoping that they will allow us to keep them all, Lloyds and HSBC have already frozen the other ones we had. The Barclays one is a Student Account as I am a Student Nurse, so that will problably have to change.

I spoke to the CCCS yesterday and the guy said that even tho our home is in negative equity (approx -£5,000), he recommended that we stop paying the mortgage, move out and give the house back to the HSBC who our mortgage is with as this "makes it simpler" as even if the OR does state they have no interested the mortgage company may decide to reposess anyway. I am just worried about being able to get a rental property now, don't they credit check you???? Our Credit file is shot because of the last 12-18 months.



D

CCCS_Matthew

baby_miece wrote: »

Hi there! I was wondering if you could answer a few questions.... I am in about £10k of debt half of which is a loan that was given to me after my ex did a runner in 2006 (joint bank account). I have a new baby and I am struggling very much to survive financially and it is like a spiral that keeps spinning. I am now looking into an DRO, so my questions are:

1. Does the OR take into account of my current partners earnings when assessing me for a DRO? If not, do I include expenditure for my daughter?As obviously I get those benefits and that money is spent on nappies etc for her.

2. I will be studying a degree in midwifery in Sept....will this affect the DRO and will the NHS bursary/student loan be considered as extra money!?!

3. Will my application be rejected if they believe I spend too much on say emergency house fund or hair cut?

4. Are all benefits included in the benefits section/income?

5. I have 3 bank accounts - 1 with HSBC where my loan is, 1 with Natwest where I have O/D and one with Llloyd which is joint with my partner! Now will these accounts be closed because of the DRO?

Hi there.

1) If applying for a DRO you would need to include your income and the costs you are reponsible for. If you pay for your daughters costs such as nappies, clothing etc then you'll need to include Child Benefit and Child Tax Credits. The OR may request confirmation surrounding your partners income if it was thought that you were paying all the household costs to reduce what you had available to creditors on purpose. I wouldn't get too worried about this as your budget would be discussed when you have an appointment with the intermediary.

2) Income such as a bursary or student loan would be taken into consideration as an income, but the amount would be divided by as many months as it is supposed to cover. For example, it you had a bursary of £1000 to last 6 months, it would only count as £167 a month in your budget.

3) You would be required to ensure your figures fit within the guidelines. If however something is high and there is a valid reason to why, this is likely to be agreed.

4) All benefits apart from DLA would be included as income.

5) It would be down to the discretion of the bank to whether the account could remain open. You may want to check what the banks individual policy is when it comes to DRO's and having an account.

Hope this helps,
Matthew.

CCCS_Matthew

diddly74 wrote: »

Thanks Matthew for that information.

Our bank accounts (that we can use) are both with Barclays and Co op so I am hoping that they will allow us to keep them all, Lloyds and HSBC have already frozen the other ones we had. The Barclays one is a Student Account as I am a Student Nurse, so that will problably have to change.

I spoke to the CCCS yesterday and the guy said that even tho our home is in negative equity (approx -£5,000), he recommended that we stop paying the mortgage, move out and give the house back to the HSBC who our mortgage is with as this "makes it simpler" as even if the OR does state they have no interested the mortgage company may decide to reposess anyway. I am just worried about being able to get a rental property now, don't they credit check you???? Our Credit file is shot because of the last 12-18 months.



D

Not necessarily. If you rented a property directly from a private landlord, it's unlikely they would credit check you. If you wanted to go through an agency and you failed the check, the rule of thumb is that they would request either 6 months rent up front, or a personal guarantor who would pay in the event that you couldn't.

The ironic thing is that if you were to go bankrupt you are probably more likely to keep up with the rent as you have no other debts to service, but not all agencies see it like that!

If you've been advised to stop paying the mortgage then you may want to put some money aside to cover your bond etc. The OR will not take interest in the money if you need it to secure a new home.

Hope this helps and good luck.
Matthew.

tigga_1961

hi hope someone can help me, ive only just found out about a dro and was maybe thinking of goin for it i have about 7k of debts unsecured, i havent been able to work for over 12 months, due to depression and other problems, as it it im living on esa of £64.30 per week, which def leaves me less than £50 a month disposable income, if i go for a dro what will happen if i return to work, that is of course if i can find work? i never took on the debts to get out of them but the way my health has been its not feasable to be hounded by debtors, also on that income where am i meant to find £90 to apply for a dro?

baby_miece

CCCS_Matthew wrote: »

Hi there.

1) If applying for a DRO you would need to include your income and the costs you are reponsible for. If you pay for your daughters costs such as nappies, clothing etc then you'll need to include Child Benefit and Child Tax Credits. The OR may request confirmation surrounding your partners income if it was thought that you were paying all the household costs to reduce what you had available to creditors on purpose. I wouldn't get too worried about this as your budget would be discussed when you have an appointment with the intermediary.

2) Income such as a bursary or student loan would be taken into consideration as an income, but the amount would be divided by as many months as it is supposed to cover. For example, it you had a bursary of £1000 to last 6 months, it would only count as £167 a month in your budget.

3) You would be required to ensure your figures fit within the guidelines. If however something is high and there is a valid reason to why, this is likely to be agreed.

4) All benefits apart from DLA would be included as income.

5) It would be down to the discretion of the bank to whether the account could remain open. You may want to check what the banks individual policy is when it comes to DRO's and having an account.

Hope this helps,
Matthew.

Thank you very much!!

bevieal

i was wondering if someone could give me advice i am goin bankrupt this month we have a mortage and a secured loan,and other debts how long does it take for your house to get took off you after br ,ive been looking for somewhere to rent but my credit rating is bad ,im not sure what is best to do i dont want to be stuck with no where to live ???? please help !!

daveyrunner

Hello,

i am currently on the dole and in the moritorium period of a DRO. If I gain full time work what effect will it have on my DRO ?

Regards

Dave

CCCS_Matthew

tigga_1961 wrote: »

hi hope someone can help me, ive only just found out about a dro and was maybe thinking of goin for it i have about 7k of debts unsecured, i havent been able to work for over 12 months, due to depression and other problems, as it it im living on esa of £64.30 per week, which def leaves me less than £50 a month disposable income, if i go for a dro what will happen if i return to work, that is of course if i can find work? i never took on the debts to get out of them but the way my health has been its not feasable to be hounded by debtors, also on that income where am i meant to find £90 to apply for a dro?

Hi there.

If you had a DRO and returned to work, you would be required to complete another budget to illustrate your financial situation. If the outcome was that you had more than £50 left over, the DRO would be revoked and you would have to look at other options to clear the debts, such as a DMP for example.

As far as the fee is concerned, you are given 6 months to get the money together, but the DRO cannot be registered until the full £90 has been paid. Alternatively, if you have family or friends that would be willing to lend you the money, that might be another option.

If you want to look at the possibility of a DRO, you're more than welcome to call and book an appointment (0800 138 1111), or use our Debt Remedy facility online. Click here to be taken directly to Debt Remedy.

Hope that helps,
Matthew.

CCCS_Matthew

bevieal wrote: »

i was wondering if someone could give me advice i am goin bankrupt this month we have a mortage and a secured loan,and other debts how long does it take for your house to get took off you after br ,ive been looking for somewhere to rent but my credit rating is bad ,im not sure what is best to do i dont want to be stuck with no where to live ???? please help !!

Hi there.

The official reciever could take up to a year before making a decision to what needs to be done with the property. Has the property got equity, or are you looking at surrendering the house due to negative equity?

Ideally it's best to sort the housing situation out before going bankrupt to save any worry. If your credit rating is bad, have you tried looking at going to a landlord directly rather than an agency? A lot of landlords don't do credit checks so this could be an option?

Regards,
Matthew.