Bankruptcy and Benefit overpayments??

markbass

Hi i'm thinking of going bankrupt, i have various loan debts totaling around 15k but i also have about 2k in benefit overpayments!! and was wondering if the benefit overpayments can be included and cleared by bankruptcy ( i was formally cautioned by the local council because they were Housing benefit and council tax overpayments) and wondered if this is veiwed as fraud by the OR and therefor not cleared by Bankruptcy? and would the same rule apply for a debt relief order?

Thankyou...Mark

dalip

Not sure about benefit but you have to have debt of less than 15k to do a DRO.Dx

markbass

Hi and thanks for that dalip, yes IF the Benefit overpayments i mentioned are NOT admissible, then a DRO might be an option for me if i can get the debt below 15k.

dalip

Take a look at this

If you are made bankrupt, you must not make payments direct to creditors. Creditors to whom
you owe money when you are made bankrupt make a claim to your trustee (that is, either the
official receiver or an insolvency practitioner). They should not ask you directly for payment; if
you receive any requests, pass them immediately to your trustee to deal with and tell the creditor
that you are bankrupt. There are some very limited exceptions to this non-payment rule. The
main ones are:

secured creditors, such as creditors who have a mortgage or charge on your home

non-provable debts, such as court fines and other obligations arising under an order

made in family proceedings or under a maintenance assessment made under the
Child Support Act 1991. Non-provable debts are not included in the bankruptcy
proceedings and you are still responsible for paying off such debts; and

·benefit overpayments, where the benefit provider can recover any benefit

overpayments from any further benefits you receive until you are discharged, when you
will be released from these debts.

Student loans

Suppliers of services to your home (gas, electricity, water and telephone) may not demand from
you payment of bills in your name which are unpaid at the date of the bankruptcy order. But they
may ask you for a deposit towards payment for further supplies or could arrange for the accounts
to be transferred into the name of your spouse or partner. You must pay continuing commitments

such as rent (if you rent your home), together with any debts you incur after the bankruptcy.


TAKEN FROM WWW.INSOLVENCY.GOV.UK

markbass

Hmm..thanks again dalip, by the looks of that of what you kindly posted there, i'm not sure if i could include the benefit overpayments in the bankruptcy! i wonder if someone could tell me for sure..ie: the insolvency help line? perhaps i could give them a call Monday to see what they have to say, see i,d prefer to do a DRO than Bankruptcy and without the Benefit payments added on to the grand total of my debt, it all comes to about £15,200 and i could pay say £300 off my overdraft to bring it within the DRO acceptance range £14,900...the stress i'm going through is unreal, what makes it worse is the uncertainty, glad i found this forum though thats for sure.

fermi

If the benefit overpayment was made due to fraud on the part of the recipient, then the overpayment cannot be written off by the bankrupcty.

Other overpayments CAN be included assuming that you were notified of the overpayment and the decision to recover them before you go BR.

In that case the benefits can be recovered from an ongoing benefit entitlement until you are discharged. When you are discharged any remaining must be written off.

If the notification of the intention to recover the benefits is made after the BR then the overpayment cannot be included in the bankruptcy.

markbass

fermi wrote: »

If the benefit overpayment was made due to fraud on the part of the recipient, then the overpayment cannot be written off by the bankrupcty.

Other overpayments CAN be included assuming that you were notified of the overpayment and the decision to recover them before you go BR.

In that case the benefits can be recovered from an ongoing benefit entitlement until you are discharged. When you are discharged any remaining must be written off.

If the notification of the intention to recover the benefits is made after the BR then the overpayment cannot be included in the bankruptcy.

Thanks for this information fermi...like i said i was formally cautioned on tape as a first offense by the council..so they have it down as fraud, i take it fraudulent benefit overpayments cant be cleared by a DRO either?

fermi

markbass wrote: »

i take it fraudulent benefit overpayments cant be cleared by a DRO either?

The info available on the Insolvency Service site doesn't make any mention of it, but I would assume it is the same as in bankruptcy.

The list of other debts that can't be included is the same as BR, and I can't think of any feasible reason why it would be different with a DRO.

markbass

fermi wrote: »

The info available on the Insolvency Service site doesn't make any mention of it, but I would assume it is the same as in bankruptcy.

The list of other debts that can't be included is the same as BR, and I can't think of any feasible reason why it would be different with a DRO.

Thanks fermi, your info and insight much appreciated mate, i wonder how quick i can get an appointment with someone to apply for DRO:question:

I'll make a few equiries monday with the insolvency people just to double check, then if they concur, i shall pay off enough to bring my total admissable debt down to £14,900 and see if i can get in there quick with the DRO application and the £90 fee...i just wonder how long winded the CAB are for getting the ball rolling for a DRO or if someone else can get me in there quick.

strawberryfields

try with baines and earnst, they do it seriously quick no wait to here from intermediaries, rhey are who i went with

markbass

strawberryfields wrote: »

try with baines and earnst, they do it seriously quick no wait to here from intermediaries, rhey are who i went with

Really!! Thanks for that strawberryfields, i would imagine they,ll want to assess me by phone to see if i qualify first or is it done purely on line? also do they charge a fee for this? except obviously for the £90 DRO fee of course, and how long from the initial inquiry did it take you to be made insolvent with these people?