Bankruptcy Info needed please

Mark_petty

Hi

A friend of mine is in alot of debt and she is considering declaring herself bankrupt.
There is no way she can get out of the debt she has over £40k's worth of debt and only earns £700 a month.
I'm basically trying to gather as much info about it so I can help her. She has been told that she has to pay £450 and then thats it her debt is cleared.

I reckon they (Cab) have told her wrong information, i'm sure I have read about having an official receiver and that they give you an allowance from your wages.

Please can someone confirm what exactly happens?
How long will she have an Official receiver?
Or once she has paid £450 is that it? (seems far to easy)
Would she ever be able to get a mortgage?

Any info would be appreciated

Thanks all

southernscouser

Have a look at this mate!

Mark_petty

Cheers matey

Mark_petty

ive read most of that site and to be honest it seems far to easy.

its saying that only if you earn above the average wage they will take some money to go towards your debt.

Does that mean my friend will get to keep all her wages? as she only earns about £700 and has no property (lives with parents)

sorry but this seems to easy.

fatbelly

Well, it says...

This will only happen if your income is above the average and appears that you might have available income after paying ordinary household expenses. The Official Receiver can look at your income and expenditure and decide if payments should be made and at what level. When looking at how much you could pay they will take into account essential expenses such as your mortgage, rent, household bills and housekeeping.

So if she has no mortgage, rent or household bills and her only expense is say £30 per week for food and housekeeping, then I'd expect her to get an IPO.

She could perhaps use some help in filling out the form.

Would she trust the CAB to help or did they really give duff information?

And the cost is £475 - OR fee went up in April. The factsheet hasn't been updated.

Addicted2Chocolate

see the 'Guide to Bankruptcy' :
http://www.insolvency.gov.uk/guidanceleaflets/guidetobankruptcy/guidetobankruptcy.htm
this is one of the many publications from the insolvency service (the Official Receivers)

bingo_kitty

Basically what happens is the bankrupt fills out a income payments order questionnaire {ipoq} which lists your income - partners income - benefits etc along with outgoings - mortgage - elec - council tax etc.

Outgoings are taken away from income and the difference is used to work out if an IPA [income payment agreement - normally in effect for 36 months] is viable.

the most the OR will ever take is 70% of the disposable income and then only over a certain amount. which is all available on the website [i can't remember off the top of my head sorry!]

Also if the bankrupt works a No Tax code may be applied which forms a no tax IPA [NTIPA] and the benefit of which goes to the OR as trustee of the estate.

I hope this helps

Mark_petty

Thanks all for your help I will pass the information over to my friend.

Mark_petty

fatbelly wrote:

Well, it says...

This will only happen if your income is above the average and appears that you might have available income after paying ordinary household expenses. The Official Receiver can look at your income and expenditure and decide if payments should be made and at what level. When looking at how much you could pay they will take into account essential expenses such as your mortgage, rent, household bills and housekeeping.

So if she has no mortgage, rent or household bills and her only expense is say £30 per week for food and housekeeping, then I'd expect her to get an IPO.

She could perhaps use some help in filling out the form.

Would she trust the CAB to help or did they really give duff information?

And the cost is £475 - OR fee went up in April. The factsheet hasn't been updated.

Thanks
I reckon she will get a IPO as she is still living at home with her parents so apart from rent to them there isn't alot of other outgoings.
I can't believe CAB didn't explain everything they basically said pay the £450 and then thats it, debt gone and bad credit rating. Or maybe she didn't tell us the full story. They never said £475 they said £450

Thanks again

cookiesncream

I hope all goes well if she goes through with it.

My husband was made bankrupt last year and to start with had alot of problems with the OR. One thing to note, on top of the excellent advice given here, is that if she has a car, it's value is not allowed to be over £2500, otherwise they'll replace it with a car of that value (or just below). I think it all depends on what your OR is like temprement wise. We got unlucky but after we provided documents to prove what we were saying, they were fine. Just remember that whatever she says, it would work out better if she's able to back it all up with paperwork. Good luck

cookiesncream

I got that wrong, aparently it's £1000 officially.
*slaps wrist for getting it wrong!!*