Bankruptcy - Questions?

debts2011

Hello,

I am thinking of going bankrupt this year as soon as I have saved up enough money. I am currently unemployed with two young children. My partner works full time. We jointly recieve Child Tax Credits and I receive Child Benefit. I have no other income of my own.When I apply for bankruptcy I am wondering what I am supposed to do regarding income & expenditure. Do I just put down what is actually mine (the child benefit & child tax credit) or do I need to include my partners income? If I put down my partners income then I am worried that they will say I have to pay some of his surplus income back to my creditors once the first year is up? He doesn's have enough surplus income to pay my debts full monthly payments but could contribute a small amount but I would never get them cleared and would rather just get rid of them. Will he be expected to pay some of his income out to my debts? They are all only my debts we have no joint debt. Also we have a joint bank account (there is no overdraft or anything so no debt with this bank) do I need to remove my name from this account so that it is not frozen? If I do this will I still need to show them bank statements from that account? Also I do not need a bank account of my own but would like to get one to build up my credit again after the bankruptcy,should I wait until the year is up or get one straight away? I also do not have a lot of the details of my creditors now, I can guess most of them but not sure of the amounts now and who is dealing with the accounts - does this matter. Also how long does it take once I've applied for things to be processed and can they refuse my bankruptcy. I estimate my debt to be around £40-£45k between about 15 creditors, I haven't paid any of them for years.

Hope someone can help.

Thanks

Ineedaname

Hi there and welcome.

Firstly, can I ask if you've taken any professional advice regarding your finances? The Judge will ask on the day to ensure you are aware of the implications of petitioning for BR. We generally recommend the free debt advice agencies; CAB, CCCS and National Debtline are the main ones.

When you fill out the SOA you put down all your income and the proportion your partner pays towards the household expenses. If your partner earns 70% of the total household income then work out 70% of the joint expenses and that will be his contribution.

With the joint bank account, you need to remove yourself from that account before going BR so that your partner's credit record isn't affected by the association. Try to do it as soon as possible and then apply for both your credit records from all three agencies just to check there's nothing else you need to act on.

It might be useful to open an account with either of the two BR friendly banks. They are Barclays (CashCard Account - debit card but no online or telephone banking) and the Co-op (Cashminder - debit card plus online and telephone banking). At least then you could have the Child Benefit paid into your own account so you have a little money to hand if you need it.

Regarding all the creditors - don't worry too much. If you get all your credit reports you'll find most of the details you need on those which will help. But anything you miss will still be included in your BR and the OR will probably find it anyway. If anything crops up post BR (chasing letter from out of the blue) then you can just call the OR to inform them of the details.

How the process works all depends on where you live. If in Scotland, they have their own procedures. If in England and Wales you need to contact the Court where you will go BR, make sure you check with them that they are the right Court for your address. They will let you know their procedure, whether a drop in service or appointment based, and offer help and support too.

tigerfeet2006

Hi and welcome.

First off please make sure you get advice from National Debtline, CCCS or the CAB about your situation. It is one of the questions you will be asked and your petition could be delayed until you have.

debts2011 wrote: »

Hello,

I am thinking of going bankrupt this year as soon as I have saved up enough money. I am currently unemployed with two young children. My partner works full time. We jointly recieve Child Tax Credits and I receive Child Benefit. I have no other income of my own.When I apply for bankruptcy I am wondering what I am supposed to do regarding income & expenditure. Do I just put down what is actually mine (the child benefit & child tax credit) or do I need to include my partners income? If I put down my partners income then I am worried that they will say I have to pay some of his surplus income back to my creditors once the first year is up? He doesn's have enough surplus income to pay my debts full monthly payments but could contribute a small amount but I would never get them cleared and would rather just get rid of them. Will he be expected to pay some of his income out to my debts? They are all only my debts we have no joint debt He won't have to pay your debts. You need to list all the household bills, your income and what your OH contributes to the household, not his full wage. When you are ready to do your SoA then post it up on the board and someone will advise http://www.makesenseofcards.com/soacalc.html. Also we have a joint bank account (there is no overdraft or anything so no debt with this bank) do I need to remove my name from this account so that it is not frozen? Yes! or your OH's credit rating will be affected by being linked to you. Do it ASAP. If I do this will I still need to show them bank statements from that account? Also I do not need a bank account of my own but would like to get one to build up my credit again after the bankruptcy,should I wait until the year is up or get one straight away? You can get one straight away, The 2 that are BR friendly are The Co-op Cashminder or the Barclays Cash account. I also do not have a lot of the details of my creditors now, I can guess most of them but not sure of the amounts now and who is dealing with the accounts - does this matter Get hold of your credit reports from all 3 CRA's and get details off them, guess what you can if they are not there but it won't matter as all provable debts are included whether listed or not http://www.moneysavingexpert.com/loans/credit-rating-credit-score. Also how long does it take once I've applied for things to be processed and can they refuse my bankruptcy. I estimate my debt to be around £40-£45k between about 15 creditors, I haven't paid any of them for years. They can refuse if you haven't taken advice and understand the implications or you are not insolvent but it sounds as if you are.

Hope someone can help.

Thanks

Have aread of the Bnkruptcy Help sticky https://forums.moneysavingexpert.com/discussion/1056083

Read as many threads on here as you can, ask questions, read and read some more.

debts2011

Thank you both for your replies. I am going to make an appointment to see the CAB asap.

So with regards to my partners income and the household expenses for example if the total bills were £800 and my income is £200 then could I just put that my partner only contributes £600 of his wage to the household to make up what needs paying to the bills?

Will they not want to know what his total wages are and where the rest of his wages go or is that not their concern with it not been his debt?

Also will I need to pay the full £700 as I don't get any unemployment benefits or anything due to partners income.

Thanks again, will make a start reading the threads tomorrow.

Ineedaname

That's about the crux of it, although you could allow yourself some for haircuts, prescriptions and a tenner for emergency fund, if there's enough in the budget to do that. So your contribution to the joint expenses would then be around £170 and your partner's contribution a little higher.

The OR is only interested in the amount your partner contributes to the household expenses, his income won't form part of their investigations, nor where else he spends his money. It is you going BR and not your partner.

You may be entitled to remission of the Court fee of £175 due to your low income. Have a look at the form and guide here. It should say in the guide whether they take household income into account or just your personal income.

SurreyLass1

Re the remissions, I receive only Child Tax Credit (though that has stopped since April with the budget changes) and child benefit, and that doesnt exempt you from the charges / reduce them at all - basically I think you have to be on Job Seekers Allowance or Disability Benefits type (ie unable to work in their eyes rather than chosing not to work to raise a family)

Hope that helps

Penelope_Penguin

Ineedaname wrote: »

You may be entitled to remission of the Court fee of £175 due to your low income. Have a look at the form and guide here. It should say in the guide whether they take household income into account or just your personal income.

Fee remission is based on household income, so you will need to detail your partner's income there. If you speak to someone at CAB, and give them the figures, they will be able to do the calcualtion for you

SurreyLass1 wrote: »

Re the remissions, I receive only Child Tax Credit (though that has stopped since April with the budget changes) and child benefit, and that doesnt exempt you from the charges / reduce them at all - basically I think you have to be on Job Seekers Allowance or Disability Benefits type (ie unable to work in their eyes rather than chosing not to work to raise a family)

Hope that helps

Not so - as I said above, fee remission is based solely on your income, not on where that income comes from If your income is low enough, then you will be entitled.

You say you only receive CB and CTC. Do you have a partner who works, otherwide you may be entitled to income support, JSA, or ESA.

SurreyLass1

Well, I was told by CCCS and the court that I was not eligible, and my ONLY income was a small amount of child tax credit and child benefit for 2 children. That was late March 2011.

Penelope_Penguin

SurreyLass1 wrote: »

Well, I was told by CCCS and the court that I was not eligible, and my ONLY income was a small amount of child tax credit and child benefit for 2 children. That was late March 2011.

Was this the only income to your household, though? You mention elsewhere that you have a husband - does he have an income?

tigerfeet2006

Look at Section 4: Full Remission based on Gross Annual Income

and

Section 5: Part Remission based on Means Test

http://www.hmcourts-service.gov.uk/courtfinder/forms/ex160a_web_0709.pdf

And that is from the HMCS.

SurreyLass1

Yes, I have a husband, and yes he is in full time employment. Only I went BR.
This seems a 'similar' picture to the one the OP has outlined, and she is in receipt of benefits as her only income, as am I.
My advice was based on what I was told, by both the CCCS Bankruptcy Support Team, and also my local court. No-one actually asked me the level of my husbands income, just that we received no other benefits. I am guessing that they can make a guestimate based on the level of Child Tax Credit I was receiving. I seem to recall that if I was in receipt of Working Tax Credit I may have been eligible, but as I am not, I am only recalling.

I apologise if the information provided to me was incorrect, I am only saying what I was told in a very similar situation