How can I help??

wishing_well

My sister and her husband have got themselves into financial problems. She has been to court and it looks like they will have to declare themselves bankrupt.

She has only admitted this to me recently, when she had the bailiffs to her house.

I dont know what to do to help - I dont have that much spare cash myself but managed to pay a lump of the arrears o all the utility companies for them, and set up standing orders so that no one will come knocking on the door again (I hope).

I phoned CCCS on their behalf, and made up the SOA for her to take to court. Also printed out the letters to send to their creditors offering token payments. The Judge said that they would never be able to pay the debt off, and suggested BR.

All their debts (now the utilities and council tax have been sorted) are through credit agencies etc. They no longer have credit cards or catalogues.

I have been reading the threads on this board and think you all may be best to advise me, having been through this yourselves. They seem to think that you declare yourself BR, then six years later you can start again ...... I am sure there is more to it than that!

Any advice would be appreciated. Thanks to you all.
(and sorry for long post)

debtinfo

Hello and welcome

Im afraid that we can not advise them what to do, it is a choise that they have to make themselves, Generally the 3 options that are available to people in england and wales are an informal debt management plan, An IVA or a Bankruptcy, On this board we specialize in bankruptcy.

If you have any questions about the process or the consequences of bankruptcy then feel free as we can answer those questions

wishing_well

Thank you.

What happens with their bank accounts? I understand that the Co-op and Barclays do special accounts for BR - but can standing orders still be taken out, and can you have a debit card?

Will they need to take their bank statements if they declare BR? I believe they should be keeping some sort of diary to explain their spending (which would help them understand where their money goes as well).

debtinfo

Bank accounts - On both of those accounts you can have direct debits and standing orders, you may not have a cheque book or an overdraft, You do get a debit card but there are a couple of places that still do not accept it (not many though). With the co-op account you can also have telephone and internet banking.

They will need to produce any statements that they have, any that they dont the OR can get direct from the bank themselves. They will need to budget well after the bankruptcy so a diary of spending is a good thing to get in the habit of doing

wishing_well

Will their current spending have any effect on the decision? ie if they are spending too much money on food shopping when it could be going towards paying off debts? Are all debts automatically cleared, or do they have to pay a certain amount back?

debtinfo

As long as they are not being extravaget then there should not be a problem, obviously they are allowed to pay for all their reasonable outgoings.

They may depending on their income have to pay something called an Income payments agreement. What they do is look at all their income and then allow for all reasonable expenditure, If they have a surplus of more than £100 pm they will ask for between 50 and 70% of their surplus to be paid for 3 years. This is negotiable so if their surplus changes later they would change the amount they pay (up or down)

wishing_well

Thank you so much for your help.

I wish I could do more to help them - It is so hard to know what to say without seeming patronising or lecturing, or giving bad advice.

debtinfo

The best thing to do is to spend an evening working out the budget, what can be paid to debts or not. Once you ave got that then look at all 3 options, look at the pro's and cons of each one and how those will affect their personal situation. For instance bankruptcy can affect jobs so do they have a job that would be affected or would they be ok with their job. It is something that has to be done clinicly and without emotion

wishing_well

Will they have to sell any personal items to go towards their debts or court fees? They have a car each (not worth much) and an old caravan. Also the kids have a laptop, mobile phones, and they have tv's etc - what happens with these?

thanks

wishing_well

Not even going to comment about the idiot who put a message on, now been deleted.

Hopefully someone can give some advice or suggestions - rather than abuse !!

debtinfo

That was strange wasn't it wishig well.

Anyway
All household goods that are not extravagant are safe, 99% of people dont have anything taken out of their house.

Their car 1 per bankruptcy can be exempt if the OR decides it is necessary, The most common reason is if it is necessry to get to work. If it is necessary but worth to much then the OR will sell it and provide a cheaper alternative.

The caravan would not be exempt but if it is not worth much then they or a family member coud buy it back to stop it being taken.

None of the kids belongings would be taken