Backrupcy for pensioners

Alex_the_lad

I would like some advice for my parents. I will get some advice from the CAB - it's just proving difficult getting a appointment!

My parents are both claims their pensions now - state and small monthly occupational ones. My dad also get Disability Living Allowance. Basically they both had to retire earlier than they wanted - my Dad due to ill health and mum due to losing her job. The are now left with debts - they own about 25% than than the value of the house inclusing a mortgage.

Just really need to know how an OR will treat the income they are on - it's just that they have a chance to rent a really nice house at below the market rental value and then in a year or so I'll be in a position to have them live with me. Will this income be treated in the same way as if it was income from a salary?

dalip

Not certain as they are changing the rules on child benefit so who can say about other benfits.

My advice to you would be to either contact cccs or do their on-line debt remedy or contact national debt line. You will have to keep trying, as like cab they are busy but....anything is worth trying.Dx

fiveyearplan

I think their pensions would be considered income for IPA purposes but I'm not 100% sure. How much is their pension and all other income?

Alex_the_lad

Hi! Many thanks for the replies. Their combined income with all their pensions and DLA is £349 per week. I’ve had a bit of look around and I’m fairly sure they will take this amount into account when it comes to an IPA which is fair enough as I think most of their expenses are reasonable. The only thing that worries me the rented house. As I mentioned they got the chance to go to a really nice privately rented house. We know the Land Lord really well and he’s willing to let them have the house for £100 below the market rental price. He also knows about possible bankruptcy and is okay with it. They are on a list for a council property but there is a housing shortage where they live. What worries me is that even though the house is cheap it is still £100 more than the Local Housing Allowance the council deems adequate. My younger sister lives with them (she’s at Uni – fulltime a) and the council say they are entitled to a 2 bedroom house and the rental house is 3 bedrooms. I realise this is turning into a housing query but my worry is that an OR may look at this and decide they are allowing too much for housing. My father has an acute mental illness and is also about to start Dialysis and it is possible that the extra room could be used for treatment. Would these health considerations influence an OR? I’m sorry to be asking questions that only an OR would be able to answer. It’s just that I haven’t been able to pin down professional advice yet and these things just prey on my mind!

Feelingfoolish_3

Generally any benefits arent taken into consideration but as already said, rules may be a changing, however one thing for sure is that they wont take DLA into account. As for housing - as long as it is reasonable then shouldnt be a problem. Bear in mind, if they do have to have an IPA then it is for a percentage of the surplus

Holes_in_my_pocket

If main income is benefits then no IPA thats what my OR told me. Are they claiming all benefit entitlement carers allowance income support etc

dalip

Providing the rental cost is the norm for your area,size,needs the OR will not be interested.

If as you say your parents are getting the house for £100 cheaper then they have nothing to worry about. The only time it may become a concern is if you were renting a 7 bedroomed house for a single person;).Dx

Alex_the_lad

Many thanks for all the advice - it's really putting my mind at easy and it's helping my parents to feel slightly better about Bankrupcy.

I've just got one more query. Between me and my parents there isn't really very much disposable income - it's going to take an effort between us just to come up with the fees for Bankrupcy. When they apply will they still be able to spend their income as normal on essentials such as rent, council tax and bills etc. I realise that their accounts would be frozen so would it be acceptable to get benefits paid into a spare account I hold or to obtain benefits as giros? I read somewhere and the advice was that it was advisable to have abit of ready cash for a couple of weeks.

dalip

Alex_the_lad wrote: »

Many thanks for all the advice - it's really putting my mind at easy and it's helping my parents to feel slightly better about Bankrupcy.

I've just got one more query. Between me and my parents there isn't really very much disposable income - it's going to take an effort between us just to come up with the fees for Bankrupcy. When they apply will they still be able to spend their income as normal on essentials such as rent, council tax and bills etcthe allowances in bc are far more generous than when in a DMP or IVA so the answer is yes as long as it is a reasonable amounts for your households needs. I realise that their accounts would be frozen so would it be acceptable to get benefits paid into a spare account I hold thats ok or to obtain benefits as giros?or they could open a bc freindly basic account with either co-op or barclays which would be unlikely to get rozen I read somewhere and the advice was that it was advisable to have abit of ready cash for a couple of weeks.

yes only just in case ALL bank ac!!!!s get frozen .

There is a SOA calculator which would be useful for your parents to do.https://www.makingsenseofcards.com lcick on the "format for mse" button and paste it here and we can see if any of the figures need tweeking in order for them to get their full allowances. They would need to do as if they were already bc ...so with no debts included and their rental cost rather than mortgage.Dx

Alex_the_lad

Thanks for the reply. I've deleted any lines where there is no expenditure


Monthly Income Details[/b]
Monthly income after tax................ 1172
Partners monthly income after tax....... 0
Benefits................................ 524
Other income............................ 0
Total monthly income.................... 1696

Rent.................................... 650
Council tax............................. 119
Electricity............................. 41
Gas..................................... 71
Water rates............................. 49
Telephone (land line)................... 20
TV Licence.............................. 14
Satellite/Cable TV...................... 30
Internet Services....................... 10
Groceries etc. ......................... 450
Clothing................................ 50
Travel............................. 50
Contents insurance...................... 20
Presents (birthday, christmas etc)...... 10
Emergency fund.......................... 50
Total monthly expenses.................. 1634+

Total Income: 1696
Remaining: 62


[FONT=&quot]As I've mentioned I'm worried about the amount of the rent. But my argument is that it's below the market value, we have a sympathetic land lord (to BR and everything), they're not a prioity for the council and we hope to try and have them live with me dueing the next year.

Also the total income includes both my parents state and private pensions and the benefit includes an amount they will get in housing benefit.

Thanks again
[/FONT]

dalip

Alex_the_lad wrote: »

Thanks for the reply. I've deleted any lines where there is no expenditure


Monthly Income Details[/b]
Monthly income after tax................ 1172BREAK THIS DOWN TO EACH PERSON INCOME
Partners monthly income after tax....... 0THEN ADD THE PARTNERS CONTRIBUTION TO HOUSEHOLD BILLS ONLY
Benefits................................ 524BREAK THESE DOWN AS SOME ARE ALLOWED TO BE INCLUDED INTO INCOME OTHERS ARE NOT
Other income............................ 0
Total monthly income.................... 1696

Rent.................................... 650full amount before hb
Council tax............................. 119
Electricity............................. 41
Gas..................................... 71
Water rates............................. 49
Telephone (land line)................... 20
TV Licence.............................. 14
Satellite/Cable TV...................... 30not allowed
Internet Services....................... 10not allowed unless for work
Groceries etc. ......................... 450£400 for 2 adults
Clothing................................ 50£40 see note below
Travel............................. 50
Contents insurance...................... 20
Presents (birthday, christmas etc)...... 10leave it but not usually allowed
Emergency fund.......................... 50£40 and change to holiday
Total monthly expenses.................. 1634+

Total Income: 1696
Remaining: 62


[FONT=&quot]As I've mentioned I'm worried about the amount of the rent. But my argument is that it's below the market value, we have a sympathetic land lord (to BR and everything), they're not a prioity for the council and we hope to try and have them live with me dueing the next year.[/FONT]

[FONT=&quot]Also the total income includes both my parents state and private pensions and the benefit includes an amount they will get in housing benefit.[/FONT]

[FONT=&quot]Thanks again[/FONT]

They would need to do an individual one as bc is seen as individual so things like rent(full amount before HB) gas,electric,water,ct at full amounts go on each. Then add things like petrol,car tax ect for whoever drives,the OP would then have down a travel expense;),each have £40 fr clothes,£10 for haircuts,£20 for perscriptions. mAY TAKE A WHILE BUT WE WILL GET THERE IN THE END:D