The impact of bankruptcy.

nmp

Hi all,

I'm an on and off poster on these forums, and yet again I find myself in need off your advice.

My sister has been advised to file for bankruptcy.

Long story short, she fell ill about a year ago, and since then has been unable to work. She is ongoing treatment, and since then has had to give up work, and lost her house and had to move in with me. She lives with me and cannot pay any rent etc.

She had two credit cards with reasonably small balances, but since falling ill and not working, she has been unable to service the balances. She now has arrangements with both companies and currently pays a fixed amount, but with charges and fee's applied, the balances have rocketed. She is no longer able to service these, and having spoken with various agencies, has been advised to file for bankruptcy.

My question is, as she is living at my address, pays no rent, or has no stake in the property, will her claiming bankruptcy effect me in any way? We have no credit agreements in joint names.

I have a good credit history, paying all my bills on time etc. My only borrowings are my mortgage, which I was looking to remortgage in the new year, and possibly take a new mortgage on a buy to let basis for rental purposes.

What effect will her claiming bankruptcy have on my credit rating?

Thanks
All.

JCS1

Her bankruptcy will have no effect on your credit rating.

nmp

JCS1 wrote: »

Her bankruptcy will have no effect on your credit rating.

Thanks JCS1 - Is this the same if her credit cards are currently registered at my Address?

debtinfo

Yes, you are credit scored on the individual not the property, where it hits you is if you have joint financial products for example a joint bank account or a mortgage together.

btw how much are her debts, who has she taken advice from

Doucam

And your house insurance may be affected as well - as a lot of insurance companies ask if you or anyone in your house has been BR.

thedeans

I can't say how it will affect you I'm afraid but didn't want to read and go

Just as a thought - Has your sister looked into the "mini bankruptcy" or DRO - if her debts are under £15,ooo - its cheaper to do and I believe quicker - there are certain criteria to meet - have a look at the info on here (sticky at top)

nmp

debtinfo wrote: »

Yes, you are credit scored on the individual not the property, where it hits you is if you have joint financial products for example a joint bank account or a mortgage together.

btw how much are her debts, who has she taken advice from

Thank you all for the responses, this is helpful. Fortunately for me, we do not have any joint financial products. Her debts total 22k and she has been speaking to the Citizens advice Bureau, and the organisations that manage the debt for the banks. She has recently been offered some settlement amounts to pay off the lot, but as her only income is unemployment benefit (no housing allowance as she lives with family, and not yet able to seek incapacity benefit or whatever it is called), she can't afford any lump sump payments, so this is not an option either. The benefit she does receive she uses to make payments against these debts,and contributes to food around the house, and general expenses like travel to hospital etc.

nmp

thedeans wrote: »

I can't say how it will affect you I'm afraid but didn't want to read and go

Just as a thought - Has your sister looked into the "mini bankruptcy" or DRO - if her debts are under £15,ooo - its cheaper to do and I believe quicker - there are certain criteria to meet - have a look at the info on here (sticky at top)

Thanks for the pointer, I'll review this in the evening and discuss with her, but as her debts exceed the 15k mark, I assume this wouldnt be applicable?