Query regarding CCCS advice..

rih09

hi i went BR in 2009
bankruptcy always appeared to be worst case scenario to me too,
but its a new start
ok so i will always be a bankruptsy but there are worse thing out there
im not saying its the best thing i ever did but you can draw a line under it and try to start again
best luck RIH09

StepChange_Pavan

r710 wrote: »

Hi,

After some opinions please.

My husband is now unemployed, has an appointment tomorrow at the Job Centre to see if he can't get some income based job seekers allowance.

He called CCCS today, as I asked him to, and the member of staff told him he couldn't apply for his own bankruptcy as he has no income (We were aware this may exclude an IVA, but not bankruptcy).

He was told he would instead have to wait for each creditor to take him to Court, I presume through CCJ's. and make agreements to pay them say £1 each per month. After entering into an arrangement with the creditors at Court, he then wouldn't be able to go bankrupt for the same debts in the future. They warned him that this result would end in 15 years plus of bad credit as opposed to the straight 6 we we hoping for with bankruptcy.

His debt is significant, and currently the only income we have is from my part-time wage and child tax credits and working tax credits, although my childcare element will soon be removed due to my husband's unemployed status. Despite the fact we would be entitled to housing benefit, they have stopped my claim due to an overpayment in dispute. At present, our income is far less than our outgoings, but hopefully when my husband finds work, the housing benefit gets reinstated, we'll have sufficient without the debt.

Can anyone shed any light on this advice? I'm really confused as to why he can't go bankrupt on benefits when I have seen several posts mentioning it, and talk of reduced Court fees for those on benefits..

I'm going to get him to check this information with another debt charity but this advice has really confused me. Just as we were starting to get our heads around bankruptcy, this has really scared us..

I'd appreciate anyone's thoughts,

r710

Hi r710,

I’ve just noticed this thread and hope you don’t mind me jumping in.

From what you’ve said it sounds as though you could be in a deficit situation so you’ve got more going out than you have coming in. This could be the reason why he can’t go bankrupt at this stage – rather than because you’re on benefits.

Although bankruptcy is likely to be your husband’s best option, we may have advised token payments as an interim solution until the budget is balanced.

We usually recommend that the budget is balanced is because the bankruptcy could be refused on the grounds that you need to rely on extra credit to be able to afford your everyday living costs. It wouldn’t matter whether the budget was based on the household income or just your husband’s, or whether benefits are the only source of income.

You don’t actually mention anything about the creditors making your husband bankrupt but the others are right that this very rarely happens. You’re right to say that if his creditors took him to court this would be through CCJs.

If you’re still concerned about the advice that was given, your husband can send us a private message with his client reference number and we can look into this in more detail for you.

I hope this helps.

Kind regards,
Pavan

debt_doctor

CCCS_Pavan wrote: »

Hi r710,

I’ve just noticed this thread and hope you don’t mind me jumping in.

From what you’ve said it sounds as though you could be in a deficit situation so you’ve got more going out than you have coming in. This could be the reason why he can’t go bankrupt at this stage – rather than because you’re on benefits.

Although bankruptcy is likely to be your husband’s best option, we may have advised token payments as an interim solution until the budget is balanced.

We usually recommend that the budget is balanced is because the bankruptcy could be refused on the grounds that you need to rely on extra credit to be able to afford your everyday living costs. It wouldn’t matter whether the budget was based on the household income or just your husband’s, or whether benefits are the only source of income.

You don’t actually mention anything about the creditors making your husband bankrupt but the others are right that this very rarely happens. You’re right to say that if his creditors took him to court this would be through CCJs.

If you’re still concerned about the advice that was given, your husband can send us a private message with his client reference number and we can look into this in more detail for you.

I hope this helps.

Kind regards,
Pavan

Hi,

I'm sorry Pavan but I really think such information from CCCS in this respect needs to stop.

A district judge will not refuse to grant an order unless you are not insolvent or it appears that you do not understand the consequences of bankruptcy.

How would a client make token offers on a negative budget?

Most bankrupts are in a negative budget situation, thats why they end up bankrupt!

If someone is on basic benefits they will never be able to afford all the normal household costs of those with more income - but they WILL get by, even if the food spend is £10 per week, and for the very poorest, sadly, that is a reality.

It may be that their financial statement shows costs for insurances, mortgages etc that are not being met. It is still important to show that the liability exists which is how negative statements end up being produced, but in reality those items are not being paid (through lack of funds), but still need to be shown.

DD

mandyl

thanks dd for that, cos if we went by cccs advice ,then i wouldnt be able to do br either.

Mrs_Arcanum

Personally found CCCS fine for managing my DMP but National Debtline mush better for practical advice.

philnicandamy

at the end of the day the advice is only as good as the advisor....I always recommend cccs/national debtline & CAB to anyone needing assistance

Gothicfairy

I am in a negative budget situation (after being made redundant )as I should be paying mortgage, council tax, electric and gas, debts, etc etc..
I can't pay everything as I don't have the money, if I went bankrupt I would not have to pay the mortgage , debts etc so would be in a better place then I am now so I really don't understand the CCCS advice or what Pavan is suggesting might be the reason.
I couldn't balance my budget now if I tried ( and I really did try for 8 months before it all went horribly wrong )

The whole point of going bankrupt is because you can't pay surely ? Companies don't have to accept the £1 offer so where would that leave you if they refused ?

kepar

Gothicfairy wrote: »

I am in a negative budget situation (after being made redundant )as I should be paying mortgage, council tax, electric and gas, debts, etc etc..
I can't pay everything as I don't have the money, if I went bankrupt I would not have to pay the mortgage , debts etc so would be in a better place then I am now so I really don't understand the CCCS advice or what Pavan is suggesting might be the reason.
I couldn't balance my budget now if I tried ( and I really did try for 8 months before it all went horribly wrong )

The whole point of going bankrupt is because you can't pay surely ? Companies don't have to accept the £1 offer so where would that leave you if they refused ?

But could you balance your money after bankruptcy?????????

StepChange_Pavan

Hi all,

I had a chat with our bankruptcy support team as it’s an interesting area for discussion.

Bankruptcy should hopefully mean the client has a fresh start, but if they don't have a balanced budget before they petition then this situation will continue throughout their bankruptcy and after.

We don't say people can't go bankrupt if they have a deficit budget, they certainly can and ultimately it is their choice. It's that we would advise that there’s no long-term solution in place and that the budget would ideally be balanced before petitioning. This helps the client’s wellbeing in the long term.

If you expect your expenditure to change after bankruptcy then it's definitely an option - as Gothicfairy mentions, if you don’t have to pay your mortgage anymore then that would mean a better position after bankruptcy. This makes sense.

For r710 there seems to be no change in their household’s situation after bankruptcy, so there wouldn’t be that fresh start.

Ultimately we don’t know the full details of this case, so if r710 requires clarification her husband can send us a private message with his client reference number and we can look into this in more detail for you.

I hope this helps.

Kind regards,

Pavan

Gothicfairy

kepar wrote: »

But could you balance your money after bankruptcy????????? was there no more ? you could use, anyone would think you were trying to make a point..although not sure what..;)

Of course because I would balance it based on what I have now rather then what I use to have when I worked full time in quite a good job.
I would have :
Rent (250)
Gas/Electric
Council tax
Car insurance
Petrol
Tax and MOT

Anything after that is food and for me

Right now I would have:
Mortgage (over £600 per month)
Council tax (over £100 per month)
gas/ electric (should be £120 per month)
Water (30 per month)
DEBTS (this now should come to over £500 per month)

So I would be better off after bankrupcy then I am now and at the moment there seems little else I could do to move forward.