Is there a minimum limit to go Bankrupt?

Paulalfc

Hi All

I am after some advice really on behalf of a relative. I was wanting to know if you have to have so much debt before you can declare yourself as bankrupt?. A relative of mine is currently living in a private rented house and is currently unemployed living off Job Seekers Allowance etc. When he was working he took out a few things like sky, mobile phone contracts etc but he then became unemployed and found it hard to pay for all these things. He has now fallen behind in his everyday bills ie council tax, water, sky, mobile phone contracts etc due to the job centre stopping his payments. He is currently using one of these debt management companies to pay some money towards the debts that he has on his behalf. The problem is that he is never going to be debt free at this rate and was wondering if going bankrupt was the only option he has. I was just wondering if you have to have so much debt before you can be granted as being bankrupt?. His debts at the moment are just inder £3000 which i know doesn't seem alot but he has a 2yr old son and another on the way at the end of the year and is trying to get himself sorted out. All his benfits are just going towards paying his debts meaning he can't afford to live. He is looking for work and hates being on benefits, but like alot of people didn't have any problems paying for these things when he was in work!.

Any help or advice would be much appreciated on this matter.

dmg24

He is not going to be unemployed forever. He needs to minimise his outgoings (Sky and mobiles are not essential!) and look to manage his debt until he is back in work, when he can start taking greater steps to paying it off completely.

Are you sure he is paying council tax? He should be claiming CTB.

mel12

Theres no minimum limit, but a DRO might be more suitable if he's not expecting his income to increase much in the next year.The fees are much lower too.

Has he tried calling one of the free debt charities for some advice?

In the short term if he can't afford the debt management plan, he can switch to making token payments of £1 a month to each creditor.

JCS1

There's no minimum but they would have to pay £525 OR's deposit and £175 court fee (they may be exempt from the court fee) so total of £700 to go bankrupt with £3,000 worth of debt.

They need to contact one of the free debt charities to go through options, it may be that token payments of £1 a month are suggested until they find employment.

Paulalfc

Thanks for your reply DMG.

He is trying to make just minimal payments at the min to keep the creditors off his back. The letting agents are saying that he owes £2000 in outstanding rent even though he doesn't pay the rent directly to them, the council does. He has argued that he doesn't feel the rent he is paying is a fair rent price for that area, max is about £380 when they are charging £450. The council are only paying them £366 HB towards the rent apparantly but he has no other money to pay the rest so they need to move out. Also they ended up running up a huge elec bill due to the central heating system in the house being well out of date and keeps breaking down but the landlord wont pay to get a new boiler in. This is partly the reason why they are in debt too!.

They keep stopping his benefits for some reason which he can't understand. Things are only going to get worse for them if they are only receiving benefits to try and live on and pay off some of the debts that they have.

mel12

They need to go and see someone like citizens advice bureau for some help on the benefits - they might be able to appeal the benefits being stopped and get the money back.

Also give shelter a call about the housing problem - it sounds like they need to sort that out urgently as they will eventually be evicted.

Paulalfc

Thanks all for your advice. i wil pass this information on.

dmg24

mel12 wrote: »

They need to go and see someone like citizens advice bureau for some help on the benefits - they might be able to appeal the benefits being stopped and get the money back.

Also give shelter a call about the housing problem - it sounds like they need to sort that out urgently as they will eventually be evicted.

No need to contact CAB, it doesn't sound like a complex case.

OP, if he (or you!) wants to post any benefits problems on the Benefits board, we can advise of the best steps to take. He may be able to get a Discretionary Housing Payment to help with the LHA shortfall, although this will not help with arrears.